Cost-Sharing Bill Passed by the New Jersey Assembly

Susan G. Komen Central and South Jersey is proud to announce that the New Jersey Assembly Bill 2337 was passed through the Financial Institutions and Insurance Committee on October 6, 2016. Susan G. Komen and other Out-of-Pocket Coalition members – Arthritis Foundation, Lupus Foundation of America, Epilepsy Foundation of New Jersey, and The Leukemia and Lymphoma Society – were in attendance to witness this monumental occasion.

The New Jersey Assembly Bill (AB) 2337 requires health insurers to limit patient cost-sharing (which refers to the cost of covered services paid by the patient) for prescription drugs and to provide appeal process concerning certain prescription drug coverage. With once-fatal diseases, such as cancer and HIV/AIDS, now being treated as manageable chronic conditions, many patients are required to pay thousands of dollars in out-of-pocket costs to access the treatments their health care providers have prescribed. When out-of-pocket fees become a barrier to accessing medication, patients find themselves facing difficult decisions about whether to take medically-necessary treatments or to risk the family’s financial stability.

Although many insurers use a tiered cost-sharing system in their drug coverage to encourage patients to use low-cost, generic brands before trying the more expensive medications, some medications do not offer cheaper alternatives. Furthermore, costlier options traditionally appear on higher tiers of a health plan’s drug formulary, and as tiers increase so does the patient’s cost-share. Fourth, fifth, and even higher tiers are now emerging, which many patients cannot afford. In these higher tiers, patients often pay a percentage of the actual cost of the medication instead of paying a flat co-pay. This may result in patients paying a staggering 50% of the medication’s actual cost, which could be thousands of dollars in some cases for only one-month’s supply.

What AB2337 does is place a cap on out-of-pocket costs for medications. Depending on a health plan’s level of coverage, these costs will be limited to $100 or $200 for a 30-day supply of medication and would apply regardless of whether the patient satisfies the plan deductible – an astonishing difference compared to patients paying thousands of out-of-pocket dollars.