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The House Committee on Insurance met on March 30 to take up a number of bills. In order, this report focuses on HB 887 (Shaheen), HB 1369 (Jetton), HB 3045 (Hull), and HB 18 (Oliverson). The committee notice can be found here and a video archive can be found here.

This report is intended to give you an overview and highlight of the discussions on the various topics taken up. It is not a verbatim transcript of the discussions but is based upon what was audible or understandable to the observer and the desire to get details out as quickly as possible with few errors or omissions.

HB 887 (Shaheen) Relating to telemedicine medical services and telehealth services covered by certain health benefit plans or provided by a pharmacist.

  • CS laid out
  • Mental health covered by insurance when provided under telemedicine; continuation of Gov. Abbott’s COVID flexibility
  • CS strikes language requiring rate parity with face-to-face, fiscal note expected to be mitigated by shift back to original credentialing agency
  • Israel – Expecting mental health medicine will change moving forward?
    • Yes, doing a lot of it through telemedicine today

HB 887 left pending

HB 1369 (Jetton) Relating to regulation of health care cost-sharing organizations.

  • Simple addition to help families better afford health care coverage
  • Cost-sharing groups can make insurance more affordable, safe harbors currently require shared faith & other interests are blocked
  • Nonreligious cost-sharing groups are regulated like insurance, but cost-sharing groups are not insurance and shouldn’t be regulated as such
  • Expands list of who qualifies to participate in cost-sharing, must collect and disperse resources among members & may not have financial interest in the process
  • Oliverson – You participate in cost-sharing, how long have you done this?
    • Since August 2016, has worked out well
  • Oliverson – Have you had expenses during that time?
    • Most have been minor expenses, have also used telehealth
  • Oliverson – Can you speak to pre-existing conditions coverage?
    • No personal experience with this, understand this is an ongoing concern

Kevin McBride, Impact Health Sharing – For

  • HB 1369 is tied together with HB 573
  • Proposing to have one bill under HB 1369 that adds provisions related to ministries; e.g. include ministries in the disclosure provisions as well

Jamie Dudensing, Texas Association of Health Plans – Against

  • TAHP strongly opposes expanding definition to anything non-faith-based organizations, allowing organizations to sell what could be junk coverage could lead to harm
  • Cost-sharing doesn’t protect pre-existing conditions, allows them to cherry-pick healthy populations out of the competitive market
  • Would like to see stronger protections, should have small insurer license if selling in the small insurer market, should prohibit paying brokers, should have strong disclosure requirements
  • Sanford – Regarding cherry-picking and pre-existing conditions, have heard of one particular bad actor in the faith-based landscape, does this apply to other faith-based organizations?
    • Risk of this is likely minimal, likely would hear some anecdotes
    • See abuses when this becomes an investor, private-equity backed industry
  • Sanford – Are you extrapolating experience with free-standing ERs to this?
    • No, studies have been done on non-ACA plans that allow taking pre-existing conditions out tend to lead to higher health insurance costs overall
  • Sanford – You’re not testifying that the faith-based market are cherry-pickers?
    • Right, concerned more about companies like Aliera; concerned about who we’re opening this up to

Dr. Cliff Porter, Self – For

  • Cost-sharing offers patients a far better alternative than corporate health insurance
  • Care can be hindered by PAs, high deductibles, out of network fees, etc.
  • Complete freedom in finding medical care with cost-sharing
  • People under traditional insurance are often denied care
  • Oliverson – What has been your experience with access issues?
    • Appreciates not having to fight with insurance, specialists appreciate direct pay
    • 2-3% have pre-existing conditions, does not include most chronic conditions
  • Oliverson – Have you had any patients where people have developed serious conditions requiring referral to hospitals and seeing issues with access?
    • Other problem is hospital price transparency
  • Oliverson – Trying to get a sense of any issues
    • Cost-sharing programs are helping pay for the cost of medical care, not providing the care

Jenny Aghamalian, Sedera – On

  • Medical cost-sharing is not insurance, not guarantee of payment and not an assumption of risk
  • Providers are growing frustrated with red tape in the health care industry
  • Important to have common set of rules for cost-sharing, whether aligned along religions lines or ethical lines

Keith Hopkinson, Christian Healthcare Ministries – On

  • Don’t oppose, HB 573 has substantially more transparency and accountability
  • Probably more than one bad actor in the ministries industry; HB 573 would allow state to use reported data to let consumers review and keep track of what’s going on in ministries
  • Usage of brokers and others is an issue
  • Need to underwrite based on applications to cherry-pick, does not happen at CHM
  • New market entrants need to find their own market rather than use the religious ministry sharing model; this bill can serve as a vehicle without lumping all together

David Balat, Texas Public Policy Foundation – For

  • Several cost-sharing bills this session, should get with stakeholders to create one framework for cost-sharing entities
  • Most bad actor stories are from one entity, Aliera

HB 1369 left pending

HB 3045 (Hull) Relating to financial regulation of certain life, health, and accident insurers and health maintenance organizations.

  • Implements TDI 2020 recommendation to remove bond retention requirements due to change in the 86th legislature; allows for voluntary statutory deposit if another state requires one

Luke Bellsnyder, TDI – Resource

  • Was a TDI recommendation, recommending removing security bond requirements

HB 3045 left pending

HB 18 (Oliverson) Relating to establishment of the prescription drug savings program for certain uninsured individuals.

  • CS laid out
  • Rebate might drop down price of insulin to $45, requires to commit to establishing trust fund up front using funding likely coming this biennium and would be self-supporting
  • Can use methods already set up through HHSC, would not expand Medicaid, does not requires Medicaid dollars or a waiver
  • Essentially cost neutral aside from admin costs that can be worked in at the outset
  • Most vulnerable people are paying high costs for drugs, can use some of our market power to drive rebates

David Balat, Texas Public Policy Foundation – For

  • Something special when TAHP and TPPF are in support
  • Uses market forces while providing a safety net, allows access for uninsured Texans with self-sustaining funds
  • Medical adherence is a big contributor to ER and hospital visits, many have to choose between medication and rent
  • Oliverson – From the conservative policy perspective, does this check all the boxes? Can conservatives get behind it?
    • Without question, no funds from the state in perpetuity, trust fund allocated into a safety net that will drive down the cost of medications

Jamie Dudensing, Texas Association of Health Plans – For

  • Health plans negotiate drugs through rebates, drives savings that get passed onto consumers
  • State also negotiates rebates through the VDP
  • Creates trust fund through a one-time expense that would be self-sustaining; really just floating cashflow to allow rebates to happen without burden on taxpayers or employers
  • Will hear more about insulin copay caps in the future, but these don’t do much for the price as most on insurance pay less than $50; this measure helps those without insurance where insulin prices can be $400
  • Israel – Where does the federal money come from?
    • Don’t know, still waiting for feds to tell us how $18 billion COVID funding will be allocated
    • Budget rider that appropriates funds if available, contingent on federal funding becoming available
  • Sanford – Rebates are negotiated on need, would the state estimate this?
    • HHSC can design this in a number of ways, would assume there would be an RFP
    • Medicaid pre-negotiates rebates, pharmacies would know the price to charge based on the rebate, pharmacist would be reimbursed out of this fund while HHSC waits for the rebate to come through
  • Sanford – So the pharmacist manages their own inventory?
    • Yes, would have to have a card, would likely negotiate with a PBM to do this; all these processes are already automated and set up

Veronica De La Garza, American Diabetes Association – For

  • HB 18 provides an option to make medication affordable for the uninsured, medication prices can be the difference between life and death
  • Insulin prices are very high, cost is between $4-$6 to produce vials
  • Reduces complication to the state, supports insulin pricing study to improve accountability

Melodie Shrader, Pharmaceutical Care Management Association – For

  • HB 18 is a bold idea that scales Utah concept; out of pocket costs are out of reach for most families
  • HB 18 addresses high list prices set by manufacturers
  • HHSC would benefit from an RFI as the prep the proposal
  • Oliverson – First time I’ve filed a bill that you’ve been in support of; I think we’ve found something everyone appreciates
  • Oliverson – Application for diabetes is huge, not just for insulin, but also oral medications; can you speak to application of this that moves beyond insulin? What can a PBM do?
    • PBMs do this today, negotiate for all drugs through formulary placement
    • Have been able to keep prices steady over last few years, hopefully this program can bring stability to the uninsured and be opened to other drugs
  • Oliverson – So could cover antibiotics, blood pressure, even some of the more expensive biologics, rheumatoid arthritis?
    • Yes, I think it’s unlimited, RFI and RFP process will be exciting
    • Lot of opportunity, but also a lot of details; will be differences from Utah
  • Israel – You mentioned Utah, can you elaborate more about the Utah program?
    • HB 18 is modeled after a smaller program in Utah, only one that has been modeled and Utah is a smaller market than Texas
    • Scaling to Texas is a pretty bold project, will be hiccups, but exciting project
  • Oliverson – Utah program is a pilot for insulin only, Utah is an expansion state so number of uninsured participating is tiny compared to Texas
  • Oliverson – Principle is simple, used existing formulary and PBM contract for the state employee retirement system
  • Oliverson – What is better here is we’re not using existing system, setting up new system that is larger
  • Israel – What do you imagine your role would be in community outreach?
    • Beneficiaries without insurance need to know of program for it to be successful, will need to be an ongoing program
    • PBMs will be vendors processing claims and negotiating, community outreach will be structured the way HHSC decides to do it; will likely not use PBMs, likely use a PR program
    • Could be an enrollment process, would do outreach if there is this type of setup
  • Israel – As we’re seeing with vaccine distribution there is an awareness issue, PBMs are at the forefront
  • Oliverson – HHSC is directed to establish community outreach in the bill
  • Israel – Want folks benefiting as an industry to help do this outreach

Blake Hudson, AARP – For

  • Agencies have had trouble getting information out about these types of programs, will need companies and stakeholders to spread word; this is one concern
  • Also concerned about how many drugs are out there with big enough rebates to make this happen
  • There are populations that could benefit, AARP assessed maybe a quarter of brand name drugs have a meaningful rebate
  • Will likely need to start with certain things, would like things like asthma & heart medication included
  • The 3 big drug companies that make insulin started this problem in 2009, would like to see us do a lot more
  • Romero – How far does this take us towards what might feel like expansion? Does this affect what we can do in the future?
    • Probably talking about two different populations, likely going to help a little bit higher income patients than those who would be readily affected by expansion
  • Romero – Who wouldn’t benefit here?
    • There are uninsured above Medicaid expansion gap, those that don’t think it’s affordable or on cost-sharing plan
    • Will still need to work for lower income folks
  • Romero – But still a lot of people?
    • We’ll see, Utah is a small state; will have some, just want to be realistic

Jason Ryan, Self – For

  • Those with diabetes face many challenges, very costly on the back end to not address these issues; $26 billion/year
  • When people can’t afford insulin, they ration & outcomes fall

Debbie Garza, Texas Pharmacy Association – On

  • Supports goal of making medication more affordable, cost is often inflated sue to emphasis placed on rebates negotiated by PBMs
  • Concerned about lack of specificity and safeguards surrounding pharmacy practice under program; need guidance for reimbursements
  • Without proper framework and oversight, patients may not receive lowest possible price
  • Vendors could adopt opaque reimbursement system where rebates are not applied at point of sale
  • Sanford – Will this program work with generics?
    • My understanding is it will be for brand names, though rebates are available for generics
  • Sanford – Manufacturers have care programs, how does this compare with those?
    • There are programs out there where manufacturers try to make medications affordable, eligibility differs and web resources for info are available
    • Might be something that is in the latest draft about putting this info on the web
  • Israel – Asks about outreach?
    • Pharmacists have always been part of solution for helping people find affordable drugs, whether directly or referring to programs
    • Will need to be part of the pharmacy network under bill
    • Reimbursement framework is important to make sure burden doesn’t fall on pharmacists
  • Israel – Don’t want to do anything this significant and not do it well

Rep. Oliverson closes

  • There are some rebates for generics
  • HHSC knows how to do this, not the first time they’ve set something like this us; know how to do the RFP, get people registered, do public outreach, so much of this are things we already know how to do
  • Don’t want to be overly prescriptive in telling HHSC how to do this, goal is to let HHSC use expertise to get the best rebate-generating system that they can
  • Don’t want to create a system where people can manipulate the system to their own advantage
  • Romero – Bill references citizens, is this not available for legal permanent residents?
    • Part of federal requirements utilized by the program
  • Romero – If we’re talking about reaching low-income diabetics
    • I totally agree with what you’re about to say, the more utilization there is the better it is
    • Would like program to be available to anyone who would access it, but my understanding is some of the limitations don’t make that possible
  • Romero – So not available for legal permanent residents
    • If I could capture every diabetic person in the program I would, would be worth it for everyone
  • Israel – Have a large, diverse state, HHSC has stumbled on outreach before; everyone wanting to benefit should participate in reaching people around the state
    • Absolutely, not viewing this program as a profit for any stakeholder, see it as an opportunity to do a lot for people who can’t afford these medications
  • Israel – Interested in background info, particularly with how we’re covering gap and income criteria
    • Program is totally income agnostic, will take every person in the state barring federal restrictions
    • More people in the program makes the program work better & saves participants money

HB 18 left pending