New Jersey May Become Latest State to Cap Out-of-Pocket Cost of Medications
There’s a bipartisan push to cap what patients pay for drugs. It could cut their bills in half, but not everyone’s on board
New Jersey officials hope the Garden State will join a growing number of states that have capped out-of-pocket patient costs for pharmaceuticals, an approach advocates said could cut annual medical expenses by one-third — or even in half — for some people suffering from complex diseases such as blood cancers and HIV/AIDS.
But the bipartisan proposal to cap the costs, which was approved Thursday by the Senate budget committee, has prompted concerns among business groups and health insurance companies. They acknowledge patients are suffering from the high costs of medications, but fear the bill will actually drive up the cost of coverage over time — by as much as $1.9 billion over five years in New Jersey, according to one study commissioned by the insurance industry.
The bill (S-814), sponsored by Senate Majority Leader Loretta Weinberg (D-Bergen) and Senate Minority Leader Tom Kean Jr. (R-Union), would cap patients’ out-of-pocket costs at $100 or $200 a month, depending on the type of plan, for a 30-day supply of any medication. These limits would apply even if the patients hadn’t reached their deductible in a traditional plan; those in so-called high-deductible plans would need to pay the full deductible before the caps would kick in.
As drafted, these limits would apply to individual and small business insurance plans; coverage sold through the state’s Affordable Care Act “exchange;” and programs that cover state, county and municipal workers, as well as teachers. It would not apply to millions of New Jerseyans insured through self-funded plans used by many large corporations and the federal government, or those covered by FamilyCare or Medicaid, which already limit patient costs.
At least half a dozen states have passed similar “copay cap” laws in recent years, championed by a diverse array of patient advocates — representing those with arthritis, AIDS, epilepsy, multiple cancers and mental health and addiction issues — and backed in some cases by the pharmaceutical industry. The New Jersey measure, first introduced in 2015, now requires a full vote in both the Senate and the Assembly; the Assembly version was approved by a committee in October.