On May 11, the federal government issued expanded guidance for private health plans about how to implement the Affordable Care Act’s requirement to cover dozens of preventive care services—including the full range of contraceptive methods, services and counseling—without any out-of-pocket costs, such as copayments and deductibles. The guidance comes in the wake of national studies by the Kaiser Family Foundation and the National Women’s Law Center (NWLC) showing that many insurance plans have not been fully complying with the ACA’s contraceptive coverage guarantee and other coverage requirements. Key points include:
- Closing loopholes: Most notably, the new federal guidance clarifies that the contraceptive coverage guarantee encompasses every distinct contraceptive method used by women and lists 18 methods as identified by the U.S. Food and Drug Administration. (Two additional methods, vasectomy and male condoms, are not included in the federal guidance because they are used by men and have been determined by federal officials to fall outside the legal scope of the ACA’s provision.) Prior federal guidance from February 2013 had not clearly defined the “full range” of methods, and the national studies identified numerous plans that failed to fully cover certain methods.
In some cases, insurers excluded specific methods, such as the vaginal ring, the patch, the implant or the copper IUD; several justified those exclusions by incorrectly claiming that they were medically equivalent to other methods—for example, that the ring and patch were equivalent to certain generic oral contraceptives. In other cases, insurers limited their coverage to generic contraceptive products, even in cases where a brand-name product had no generic equivalent; there are no generic IUDs on the U.S. market, for example.
- Ensuring coverage for related services and dependents: The new guidance also puts health insurers on notice that they must fully cover all clinical services “needed for provision of the contraceptive method.” One of the national studies, for example, had identified coverage limits on ultrasounds to assess proper placement of an IUD and even on anesthesia for sterilization. In addition, insurers were reminded that the preventive services coverage requirements apply to all plan enrollees, including those enrolled as dependents; several plans identified by the NWLC, for example, had excluded coverage of maternity care or sterilization for dependents.
- Limiting cost-cutting techniques: Insurers were also given further guidance on what they can and cannot do when using so-called reasonable medical management techniques, such as drug formularies, prior authorization and step therapy (requiring women to try one service or product before covering a more expensive one). They may use such techniques only within a method category (e.g., to promote one hormonal IUD over another), but not across method categories (e.g., to promote oral contraceptives over IUDs). The guidance also provides more details about the waiver process that insurers must have in place if they do use such techniques.
The new federal guidance will officially take effect for new plan years beginning in July—in time for student health plans that begin in the fall and for ACA marketplace plans and employer-based plans that begin in January 2016. They should help to bolster a contraceptive coverage guarantee that was already having a widespread, beneficial impact for women. Guttmacher research found that the proportion of privately insured women paying zero dollars out of pocket for oral contraceptives, injectable contraception, vaginal rings and IUDs increased substantially after the guarantee took effect. A 2014 report from the IMS Institute for Healthcare Informatics had similar findings, including an estimate that U.S. women saved nearly half a billion dollars in out-of-pocket costs for contraception in 2013.
In the meantime, state policymakers have been taking action to clarify and strengthen the contraceptive coverage guarantee. California enacted legislation in 2014 addressing some of the same issues with insurers’ coverage. Connecticut took similar action in 2014 through an insurance bulletin. In March 2015, Washington State’s insurance commissioner extracted commitments from his state’s insurers to improve their customer service training on the contraceptive coverage guarantee and make corrections to their formularies. And in May 2015, New York regulators announced that they were investigating insurers’ contraceptive coverage practices, and legislation has been introduced to expand on the federal coverage requirements. Several other states have proposed similar legislation this year.
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