The cost of drugs used to treat cancer has doubled in the past decade — from an average of $5,000 to more than $10,000 per month, according to reports. Organizations will soon see two key pieces of legislation intended to help control how much patients pay for cancer treatment and prevention.
“New state and federal laws will make it easier for people to manage the cost of cancer drugs,” says Veronica Hawkins, Medical Mutual Vice President, Government Accounts. “The laws focus on oral chemotherapy drugs, as well as preventive drugs prescribed to women at a high risk for breast cancer.”
Smart Business spoke with Hawkins about what organizations should know about the new Ohio law known as Senate Bill 99, which requires oral chemotherapy drugs and injected treatments to be covered equally; and the Affordable Care Act (ACA) provision that requires preventive breast cancer drugs to be covered at 100 percent.
What is the purpose of these laws?
For many people, a cancer diagnosis can be financially devastating. Even if employees have health insurance, they still pay certain expenses out of their own pocket. The diagnosis affects employer health care costs, too. Studies show that cancer-related treatment now accounts for 10 percent of the average employer’s health care costs. These new laws relieve some of those financial burdens. While some organizations may see their insurance rates increase, these laws could also help them control their health care costs in the future.
What do these laws change?
Earlier this year, the federal government set new rules for the preventive breast cancer drugs tamoxifen and raloxifene. Those drugs must be covered at 100 percent for women age 35 or older who have not previously had breast cancer but are considered to be at high risk.
In addition, the new Ohio law requires oral chemotherapy medications and intravenous treatments to be covered equally. In the past, the out-of-pocket cost for oral chemotherapy drugs might have been higher.
Are all organizations affected?
Each law is different. The federal law requiring coverage for preventive breast cancer drugs is part of the ACA, so organizations that are considered ‘grandfathered’ may be exempt. To be grandfathered, an organization must have purchased its health plan before the ACA was signed into law and not made any significant changes to the plan since then.
ACA status doesn’t matter for Ohio’s oral chemotherapy drug law. Any organization with a fully insured plan is required to comply.
It’s a little different for self-funded plans, where the employer pays its own claims. If an organization has a self-funded plan, it only has to comply if it is considered a public entity. That could be government, school districts or public agencies, such as parks or water districts. Otherwise, organizations with self-funded plans are exempt.
When does each law take effect?
The preventive breast cancer drug requirement took effect on Sept. 24, so some organizations may have already seen changes in how their claims are processed. Ohio’s oral chemotherapy drug law will take effect with plan years that start on or after Jan. 1, 2015. In many cases, the plan year is not based on the actual calendar year, so it’s important for organizations to verify when they will be affected. Many smaller organizations won’t be affected until their plan is up for renewal in 2015.
What can organizations do to promote cancer prevention?
There are many ways an organization can help its employees prevent cancer. According to research, more than one-third of all cancers are related to lifestyle factors, such as lack of physical activity, unhealthy diets and tobacco use.
Prevention is one of the best weapons against cancer, so it’s important to promote tobacco cessation and facilitate regular screenings. These activities may help promote early diagnosis and reduce the long-term costs of cancer for employees as well as the organization.
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