Prescription Drug Rebate Impact to Commercial Health Insurance Plans

WEST VIRGINIA INSURANCE BULLETIN No. 26-01 Insurance Bulletins are issued when the Commissioner renders formal opinions, guidance or expectations on matters or issues, explains how new statutes or rules will be implemented or applied, or advises of interpretation or application of existing statutes or rules. ► Prescription Drug Rebate Impact to Commercial Health Insurance Plans◄ In 2021, the Legislature passed House Bill 2263 amending West Virginia’s Pharmacy Audit Integrity Act (PAIA) located in Chapter 33, Article 51 of the West Virginia Code. The 2021 updates to the PAIA generally went into effect on January 1, 2022. One of the more substantive updates to the law was regarding prescription drug rebates. The West Virginia Offices of the Insurance Commissioner (OIC) is issuing this Insurance Bulletin to publicly provide frequently requested information regarding the effects of the prescription drug rebate law on health insurance rates as reported by commercial health insurers to the OIC. W.Va. Code §33-51-9(k) provides “a covered individual’s defined cost sharing for each prescription drug shall be calculated at the point of sale based on a price that is reduced by an amount equal to at least 100 percent of all rebates received, or to be received, in connection with the dispensing or administration of the prescription drug. Any rebate over and above the defined cost sharing would then be passed on to the health plan to reduce premiums.”1 This provision of the PAIA is oftentimes referred to as the “point-of-sale” or “pass-through rebate” provision. Any rebate calculated by a pharmacy benefit manager (PBM) to be over and above a covered individual’s defined cost sharing may not be retained by the PBM but must be passed on to the health benefit plan and must be used by the health benefit plan to reduce the cost of premiums. See W.Va. Code St. R. §114-99-5.14.3. Beginning in 2023, the OIC asked health insurers who file rates with the OIC to calculate the total amount of rebates received on prescription drugs and to assess the impact thereof on health insurance rates. Health insurers have been asked to separate the rate effect due to West Virginia’s prescription drug rebate law from the health insurer’s otherwise filed rate request without the effect of the prescription drug rebate law. Health insurers have complied and provided the OIC with the percentage that their annual rate request was reduced due to receipt of prescription drug rebates. Data submitted to the OIC by the health insurers is subsequently reviewed by OIC contracted actuaries.2 Health insurers who have submitted this information in their annual filings are Aetna Health Insurance Company, CareSource West Virginia Company, Highmark Blue Cross Blue Shield, The Health Plan of West Virginia, THP Insurance Company, UnitedHealthcare Insurance Company, and Optimum Choice, Inc. ____________________________ 1 W.Va. Code §33-51-3 defines “defined cost sharing” as “a deductible payment or coinsurance amount imposed on an enrollee for a covered prescription drug under the enrollee’s health plan.” 2 The OIC does not currently possess specific data on how rebates affected the rate filings of specific insurers prior to 2022. Prior to the implementation of the point-of-sale or pass-through rebate law, PBMs and health insurers were able to negotiate rebate contract terms. Some insurers may have required 100% of rebates to be passed through to the insurer, while other insurers may have allowed their PBM to retain rebates, or portions thereof, as part of the PBM’s compensation. 2023 Filings (2024 Plan Year): Insurer Plan Type Rate Change Without Pass-Through Rebate Pass-Through Rebate Effect on Rate Final Rate Change Company A Any Size 17.10% -5.50% 11.60% Company A Large Group 16.20% -5.50% 10.70% Company B Individual 6.10% -3.10% 3.00% Company C Individual 10.40% -8.30% 2.10% Company C Small Group 13.50% -7.10% 6.40% Company C Large Group 9.60% -1.80% 7.80% Company D Individual 6.57% -6.72% -0.15% Company D Small Group 16.18% -6.28% 9.90% Company E Small Group 6.41% -5.55% 0.86% Company F Small Group 29.60% -14.00% 15.60% Company G Small Group 29.40% -14.00% 15.40% 2024 Filings (2025 Plan Year): Insurer Plan Type Rate Change Without Pass-Through Rebate Pass-Through Rebate Effect on Rate Final Rate Change Company A Any Size 18.80% -6.20% 12.60% Company A Large Group 18.70% -6.20% 12.50% Company B Individual 15.097% -2.75% 12.347% Company C Individual 12.30% -9.60% 2.70% Company C Small Group 17.60% -9.67% 7.93% Company C Large Group 17.30% -0.70% 16.60% Company C Transitional 18.90% -10.30% 8.60% Company D Individual 7.72% -7.45% 0.27% Company D Small Group 17.80% -7.07% 10.73% Company E Small Group 11.89% -7.60% 4.29% Company F Small Group 21.80% -11.70% 10.10% Company F Large Group 5.21% 0.00% 5.21% Company G Small Group 21.900% -11.70% 10.200% 2025 Filings (2026 Plan Year) Company Plan Type Rate Change Without Pass-Through Rebate Pass-Through Rebate Effect on Rate Final Rate Change Company A Any Size 24.70% -8.00% 16.70% Company A Large Group 26.00% -8.00% 18.00% Company B Individual 9.300% -2.20% 7.100% Company C Large Group 21.10% -7.70% 13.40% Company C Individual 20.20% -6.30% 13.90% Company C Small Group 25.11% -8.91% 16.20% Company D Individual 15.81% -7.93% 7.88% Company D Small Group 24.38% -7.56% 16.82% Company D Large Group 15.82% -8.42% 7.40% Company E Small Group 28.67% -7.50% 21.17% Company E Large Group 5.09% -8.00% -2.91% Company F Small Group 12.57% -2.62% 9.95% Company F Large Group 22.60% -13.00% 9.60% Company G Large Group 22.60% -13.00% 9.60% Company G Small Group 10.10% -1.30% 8.80% Please e-mail any questions concerning this Insurance Bulletin to OICBulletins@wv.gov. Issued: February 2, 2026 _____________________________ Allan L. McVey CPCU, ARM, AAI, AAM, AIS Insurance Commissioner