Benefit Design

The Inflation Reduction Act (IRA) was a sweeping piece of legislation that impacted multiple industries, but the prescription drug aspects of the law have arguably gotten the most attention, both positive and negative. CMS recently released the eagerly anticipated negotiated prices for the first 10 drugs, which will go into effect on Jan. 1, 2026. In preparation for the law’s potential impact, research from Zitter Insights found that both Medicare and commercial plans already have begun to modify their drug management approach.

Among the pharma provisions of the IRA, which was signed into law by President Joe Biden on Aug. 16, 2022, are requiring Medicare to negotiate the prices of the most expensive Medicare drugs, starting with the top 10 Part D agents; sanctioning companies whose Part B drugs’ prices increase faster than the rate of inflation; and implementing a phased-in Medicare Part D redesign that modifies the percentages different stakeholders are responsible for and caps beneficiaries’ out-of-pocket costs at $2,000 starting next year.

Optum Rx recently revealed that Optum Health Solution’s new biosimilars-focused, private-label subsidiary will join the other two big PBMs’ similar offerings. On Jan. 1, 2025, two Nuvaila-labeled biosimilars will be added to three of its commercial formularies — and for a $0 copay.

Amgen Inc.’s Wezlana (ustekinumab-auub), an interchangeable biosimilar of Stelara (ustekinumab) from Johnson & Johnson Innovative Medicine, will be added to Optum Rx’s commercial formulary on Jan. 1, 2025, the PBM revealed. The agent will be provided as a private-label product from Nuvaila — known as Wezlana for Nuvaila — and will be available in both high-wholesale acquisition cost and low-WAC versions.

The human interleukin-12 and -23 antagonist has approval for all of Stelara’s indications and is available in both subcutaneous and intravenous formulations. It also is latex-free, while Stelara contains a derivative of latex.

If Medicare Part D covered GLP-1 drugs for obesity, rather than just Type 2 diabetes, it could increase annual spending by $3.1 billion to $6.1 billion, according to a recent Health Affairs study.

The introduction of GLP-1 medications for treatment of diabetes and obesity has reignited the debate over Medicare’s prohibition on covering weight loss medications. In June, the House Ways & Means Committee advanced legislation that would provide a limited pathway for adults 65 and older to get anti-obesity GLP-1s covered by Medicare. The bill has not yet passed the full House.

The countdown is on until the 2025 Medicare Annual Election Period (AEP), which runs annually from Oct. 15 through Dec. 7, and Medicare Advantage plans are anxiously awaiting intel on how their competitors responded to upcoming Medicare Part D changes stemming from the Inflation Reduction Act (IRA). And while marketing rules remain largely unchanged this AEP — thanks to a district court putting CMS’s plans to restructure broker compensation on hold — the 2025 AEP is likely to throw plans more than a few curveballs.

Those were just some of the takeaways shared by industry veterans during an Aug. 22 webinar, “2025 AEP Sales Strategy in the New Regulated Environment,” which was co-hosted by EvolveNXT and Rebellis Group.

CVS Health Corp.’s insurance division, Aetna, on Aug. 27 revealed that it became the first major U.S. insurer to update its fertility treatment coverage policy nationally. In what Aetna called a “landmark policy change,” members of eligible plans will now be able to access intrauterine insemination (IUI) as a medical benefit, regardless of their sexual orientation or partner status.

Yet the insurer did not mention in its press release that it agreed to execute a similar policy change as part of a proposed settlement in a case filed by LGBTQ+ enrollees who claimed Aetna’s fertility treatment coverage policies are discriminatory. In fact, Aetna and other insurers are facing several similar lawsuits, says Alison Tanner, senior litigation counsel at National Women’s Law Center (NWLC).

People enrolled in Affordable Care Act marketplace plans had access to 40% of their local physicians in-network, on average, and those who enrolled in more expensive plans generally could access broader networks, according to a KFF analysis.

The analysis studied the percentage of physicians participating in the provider networks of Qualified Health Plans offered in the individual market in the federal and state ACA marketplaces in 2021. It found that only 4% of ACA exchange enrollees were in plans that included more than three-quarters of local doctors in-network, while 23% of enrollees were in a narrow network plan that included fewer than a quarter of the local doctors.

Most people enrolled in Affordable Care Act exchange plans had in-network access to fewer than half of clinicians in their area in 2021, according to a KFF study published on Aug. 26. Matthew Rae, the report’s lead author, tells AIS Health the number of physicians in networks varies widely even within states and counties, yet it is still difficult for consumers to compare and choose plans.

Rae adds that insurers often limit their exchange networks to keep their costs down and competitive in a crowded field, where often dozens of plans vie for enrollees. He points out that insurers seek to price their offerings based on the second-lowest cost plan in the marketplace’s silver category, which is linked to the premium tax credits that most enrollees receive. Plans that are more expensive than the second-lowest cost silver option often only get a small number of enrollees, according to Rae.

The cost of providing health benefits to employees grew more than was projected in 2023 and is expected to rise by an eye-popping rate of 7.8% by 2025, according to an annual survey of large companies from the Business Group on Health. And to address those rising costs, employers are demanding greater accountability from their health plans, PBMs and other vendors.

“Health care costs is really the headline story of this year’s findings,” Ellen Kelsay, Business Group on Health president and CEO, said during an Aug. 20 virtual press briefing. Health care trend — or the rise in spending — was 6.8% in 2023, which was up from 4.6% in 2022 and greater than the 5.9% estimated trend.

If Medicare Part D covered GLP-1 drugs for obesity, rather than just Type 2 diabetes, it could increase annual spending by $3.1 billion to $6.1 billion, according to a recent Health Affairs study.

The introduction of GLP-1 medications for treatment of diabetes and obesity has reignited the debate over Medicare’s prohibition on covering weight loss medications. In June, the House Ways & Means Committee advanced legislation that would provide a limited pathway for adults 65 and older to get anti-obesity GLP-1s covered by Medicare. The bill has not yet passed the full House.

Echoing a proposal championed by the Biden administration, Democratic presidential candidate Kamala Harris said recently that if elected, she hopes to apply a $35 out-of-pocket cap on insulin to everyone in the country — not just those on Medicare. But newly published research into state out-of-pocket insulin cost caps raises questions about how much of an impact such a policy would make.

So far, 25 states and Washington, D.C., have passed legislation capping patients’ monthly out-of-pocket costs for insulin, with upper thresholds set between $25 and $100. Those caps apply only to state-regulated health insurance plans. Meanwhile, the Inflation Reduction Act (IRA) capped Medicare enrollees’ monthly out-of-pocket costs for insulin at $35, effective in 2023.