August 19, 2009
HEALTH INSURANCE COVERAGE FOR CANCER PILLS
By: Janet L. Kaminski Leduc, Senior Legislative Attorney
You asked if Connecticut law requires health insurance policies to provide coverage for oral medication to treat cancer and, if not, if a law could be passed to require such coverage. You provided an article from The New York Times that discussed the coverage issue as stemming from the difference in cost between receiving cancer medications intravenously versus orally in pill form (Insurance Laws as Cancer Care Comes in a Pill, April 15, 2009).
Connecticut law does not mandate coverage of oral medication to treat cancer (i.e., cancer pills) and insurance policies filed with the Connecticut Insurance Department do not specifically address oral cancer treatments, according to Dawn McDaniel, a department spokesperson. McDaniel also noted that the department's Consumer Affairs Division is not aware of receiving any complaints on this topic.
The legislature could enact a law that requires coverage of oral cancer treatment. Two states have addressed this issue to date, Oregon and Hawaii. These states require coverage of oral chemotherapy on the same basis as intravenously-administered chemotherapy.
Connecticut does not mandate insurance coverage for oral cancer treatment. But state law includes a requirement for off-label cancer drugs (CGS §§ 38a-492b and 38a-518b). Under this law, if a covered prescription drug is recognized for treatment of a specific type of cancer, an insurance policy cannot exclude coverage of the drug when it is prescribed to treat another type of cancer.
Due to federal law (ERISA), state insurance benefit mandates do not apply to self-insured benefit plans. A self-insured health benefit plan is one that is not backed by an insurance policy. Rather, the plan sponsor funds and administers the plan (i.e., pays claims covered by the benefit plan from its own money, which may include money collected from plan enrollees as premiums). A plan sponsor may outsource or delegate the administration of its self-insured plan to a third-party administrator (TPA) (often an insurance company), but the TPA does not provide the employer with financial backing or assume financial risk associated with the claims.
For a list of public acts related to cancer passed in Connecticut from 1998 to 2008, see OLR Research Report 2008-R-0349.
Oregon enacted a law in 2007 that requires a health benefit plan that covers cancer chemotherapy treatment to cover prescribed, orally administered anticancer medication on a basis that is no less favorable than coverage for intravenously administered or injected cancer medications (Or. Rev. Stat. § 743A.068).
In 2009, Hawaii enacted and the governor signed a law that takes effect on January 1, 2010 (HI S.B. 166, Act No. 168). Under the law, health insurance policies and HMO contracts that cover cancer treatment must cover medically necessary chemotherapy, including orally administered chemotherapy, which must be subject to the same copayment or coinsurance amount that applies to intravenously administered chemotherapy.
The act defines “intravenously administered chemotherapy” as a physician-prescribed cancer treatment that is administered through injection directly into the patient's circulatory system by a physician, physician assistant, nurse practitioner, nurse, or other medical personnel under the supervision of a physician and in a hospital, medical office, or other clinical setting.
It defines “oral chemotherapy” as a U.S. Food and Drug Administration-approved, physician-prescribed cancer treatment that is taken orally in the form of a tablet or capsule and may be administered in a hospital, medical office, or other clinical setting or may be delivered to the patient for self-administration under the direction or supervision of a physician outside of a hospital, medical office, or other clinical setting.