OTC Birth Control Is Coming Soon — But Coverage Could Be Tricky

This summer, Opill (norgestrel) became the first over-the-counter (OTC) daily contraceptive pill approved by the FDA, and it’s slated to hit the U.S. market in early 2024. However, Opill’s OTC designation — which on the surface would seem to increase access to birth control — may have the opposite effect for patients seeking reimbursement from their health plans, experts said during a recent KFF web event.

“Having over-the-counter contraceptives is definitely a positive step,” said Christine Gilroy, M.D., chief medical officer of The Cigna Group’s PBM, Express Scripts. “I am concerned, though, that while it removes the barrier of needing to pay for a physician visit and get a prescription from the physician…in order to be processed against a pharmacy benefit, it does need to be entered into a system that essentially turns it into a prescription.”

Doing that, meanwhile, “requires pulling a licensed pharmacist away from other work that they’re doing in the pharmacy — which could be administering vaccines, talking with physicians and counseling other patients — just to spend a couple of minutes entering something into the claims system in order for that to adjudicate,” Gilroy added during KFF’s Sept. 15 event, “Will Insurance Cover Over-the-Counter Contraceptive Pills? A Discussion of Coverage Options and Challenges.”

Therefore, Gilroy said she believes “there is a significant opportunity to look at modernizing the claims processing system and create a different category for handling over the counter contraceptives,” as well as other vital medicines that are newly available OTC, such as the opioid overdose reversal drug Narcan (naloxone HCI).

Victoria Nichols, project director of Free the Pill, said that while FDA approval of Opill was a “huge win” for her advocacy coalition, it won’t mean much unless people can afford the medication. HRA Pharma, which manufactures Opill, has not yet revealed how much it will cost.

“We’re really looking for any support…from the federal administration around insurance coverage and really ensuring that there’s no prescription required for any over the counter birth control pills,” Nichol said.

Is OTC Birth Control Covered? It’s Complicated

The Affordable Care Act requires most individual, small-group and large-group health plans to cover all preventive services recommended by federal agencies — including birth control — without cost-sharing. But there are catches relating to OTC contraception. When the Health Resources and Services Administration (HRSA) issued its initial recommendations regarding birth control in 2011, it included the words “as prescribed” in reference to the coverage requirement for contraception, noted a KFF issue brief that accompanied its Sept. 15 web event. That language was removed when the HRSA-commissioned Women’s Preventive Services Initiative updated the recommendations in 2021. Still, “as prescribed” remains in a frequently asked questions document published by HHS and the Labor and Treasury departments.

The ACA’s preventive services coverage requirement also applies to Medicaid expansion programs, which offer coverage to nearly all adults with incomes up to 138% of the federal poverty level; 10 states, however, have not adopted those coverage expansions. Traditional Medicaid programs are required to cover family planning services without cost sharing, though states have flexibility in which contraceptive methods they cover, according to KFF. Seven states use their own funds to cover OTC contraception for Medicaid enrollees.

Six states, meanwhile, have sought to end the coverage ambiguity by requiring all state-regulated private health insurance plans to fully cover OTC contraception (including condoms, spermicides, emergency contraception, and in 2024, Opill) without a prescription. Two of those states, Illinois and Oregon, require private plans to cover OTC birth control products — but their laws don’t explicitly say plans must cover them without a prescription. (Health plans usually require a prescription to indicate medical necessity and trigger coverage, including for products that do not require a prescription to purchase, KFF explains.)

Complicating matters further, however, states are only able to regulate individual market and fully insured employer plans. The type of plans held by approximately 65% of workers — self-insured employer plans — are regulated by the federal Employee Retirement Income Security Act, so state laws mandating OTC contraception coverage don’t apply to them.

Coverage Mandates Can’t Solve Everything

Don Downing, a clinical professor at the University of Washington School of Pharmacy, practices in one of the six states that has specified that all state-regulated private plans must cover OTC contraception. But during the KFF web event, he said those regulations haven’t translated into a simple process for consumers.

“A consumer should expect a seamless purchasing experience, but I have yet to see a seamless mechanism for pharmacies to be able to bill for OTC products,” Downing said. He noted that two years ago he asked students in his Reproductive Health Group to survey local pharmacies in Washington about their experience trying to bill for OTC emergency contraception — known commonly by the brand name “Plan B” — and found that “most pharmacists had to resort to prescribing the contraception in order to get insurance coverage.”

“This means that the consumer who decided themselves to purchase the OTC product now has become a patient and the pharmacist has become a prescriber, with inherent provider liabilities,” Downing pointed out. “I don’t see this as the pathway for easy access to OTC medications, even though it has worked as a stopgap process in Washington state.”

Downing’s remarks align with what KFF researchers found in their report, which they produced after interviewing key stakeholders in the six states that require Medicaid and private plans to cover OTC contraception without a prescription. In addition to Illinois, Oregon and Washington, those states include New Jersey, New Mexico and New York.

In those states, “consumers generally need to obtain OTC contraception at the pharmacy counter, where they can show evidence of coverage and get their pharmacy claim processed,” the report noted. Some private health plans allow members to pay for OTC contraception themselves and then seek reimbursement, but that option can be financially and administratively burdensome for consumers and is rarely used.

“Interviewees indicated that there has been little specific outreach about this covered benefit to pharmacies in states where OTC contraception, such as emergency contraception and condoms, is covered without a prescription in private insurance or for Medicaid enrollees,” the KFF report added. And health plans interviewed by researchers “reported that they receive few claims for non-prescribed OTC contraception, which could be due to low awareness of the benefit and how to bill for it.” In addition, few plans provide information about the benefit in their enrollee-facing information.

Claims System Updates Could Help

Nichols agreed that in the states already mandating coverage of OTC contraception, “consumer education has been brought up as one of the really big challenges.” One issue is the fact that the mandates don’t apply to self-insured plans — so “a very large percentage of the people in the state don’t actually have coverage,” she noted. And generally, those states’ laws haven’t allocated funding to spread awareness about their new coverage rules, Nichols said, which suggests that government funding could help improve these efforts.

From a technical standpoint, one important step in the effort to remove barriers to OTC contraception coverage is the modernization of claims systems, according to Gilroy. She also said the health care industry should elevate pharmacists’ role and recognize that they’re key components of the health care ecosystem — rather than “tying them to administrative functions like entering prescriptions into a claims database in order to get the benefit.”

Downing added that there needs to be a “nationally accepted claims processing system” instead of the patchwork of different systems that exists currently. “One of the things that pharmacists already have to do, if they’re going to run a claim through, is put a prescriber/provider in there, and a national, uniform, dummied provider number that signifies it’s an over-the-counter contraceptive would be very useful…in streamlining this process.”

This article was reprinted from AIS Health’s biweekly publication Radar on Drug Benefits.

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