PAN joins letter urging Department of Labor to close loophole on Essential Health Benefits provision
The PAN Foundation joined a letter signed by 80 organizations representing patients, providers, and public health advocates to the Department of Labor, urging them to issue a promised federal rule that would close a harmful loophole in the enforcement of Essential Health Benefits (EHBs) provision of federal law.
This loophole allows health insurers, pharmacy benefit manager, and third-party vendors to designate some covered specialty drugs as “non-essential” to evade cost-sharing protections in federal law. As a result, patients are forced to join a copay maximizer program—signing up with third-party vendors to get their prescription medications at no cost—or be forced to pay full price or high co-insurance rates of 30 percent or more. In addition, the resulting patient expense does not apply toward the patient’s out-of-pocket maximum. As a result of this profit scheme, significant cost burden is transferred to patients, particularly impacting patients with chronic illnesses, while also funneling patients with qualifying incomes to seek help from copay assistance programs.
In 2024, the Centers for Medicare & Medicaid Services finalized a rule that protected Americans enrolled in individual market and small group plans from these design benefit schemes, but the rule stated that a future rule would be issued to extend these protections to large group and self-funded plans. The letter to the Department of Labor urges them to issue a regulation to close the Essential Health Benefits loophole as soon as possible.