Contraception Annual Supply: How to Implement Policy Successfully

Introduction

Annual supply (also known as extended supply) is a tool for states to increase access and adherence to women’s preferred contraceptives. With this model, a patient can get a year’s worth of a short-acting contraceptive—such as the pill, patch, or ring—at one time. This differs from the status quo, in which patients typically get 30 or 90 days of contraception at a time and must continually receive refills to maintain their regimen.

The primary policy change needed to facilitate annual supply requires insurers in the state to cover the cost of a 12-month prescription with a single pharmacy visit. While annual supply policies do not require patients or pharmacies to use it, the model offers substantial benefits including more security in maintaining a consistent contraceptive regimen (crucial to preventing unintended pregnancy) and decreased cost for insurers due to fewer patient healthcare costs. Of course, the annual supply model must be implemented well in order to realize these benefits. Many states that employ this model have experienced low uptake, which can be mitigated with the right policies. This piece explores the benefits of annual supply for those using contraception, describes the current state policy landscape, and offers policy recommendations to advance annual supply reform.

The Evidence on Annual Supply

Data on annual supply is promising. In one study on outcomes of California Medicaid recipients who received a one-month, three-month, or 12-month supply of their preferred contraceptive, those receiving 12 months were significantly less likely to have an unintended pregnancy or abortion in that timeframe. Additionally, women who received a 12-month supply were more likely to refill their prescriptions after the first year and less likely to need emergency contraception than their counterparts, thereby reducing unintended pregnancy rates.

Research also shows that better adherence to a contraceptive regimen creates potential cost savings for insurers. For example, a 12-month dispensing model for the U.S. Department of Veterans Affairs (VA) explored the possible cost savings of annual supply compared to the current three-month dispensing limit. This model estimated an annual savings of over $2 million for insurance providers covering over 24,000 women veterans—an average of about $87 per woman. These cost savings resulted from a reduction in unintended pregnancies from 140 per 1,000 women to 24 per 1,000 women, or 583 pregnancies annually. This means annual savings could potentially be even higher for providers covering more women. Finally, VA data shows that within a year, over 40 percent of women receiving only three months of birth control at a time went a week or more without it between refills. While this data is promising, states themselves take different approaches to annual supply that can affect successful implementation.

State Landscape and Important Policy Components

Oregon became the first state to enact annual supply in 2015. Since then, just over half of all states plus the District of Columbia have followed suit. But because they have not implemented annual supply identically, some distinctions are critical to understanding how to implement the model so that it delivers on its promised benefits.

There are two primary components to annual supply policy: insurer coverage and cost. These components determine the maximum benefits of the approach. The first is establishing which insurers are required to comply. In states that allow annual supply, not all insurers are mandated to cover it. In the majority of states, both Medicaid and private insurers are required to provide coverage. However, states like Michigan and South Carolina only require Medicaid to provide a year’s prescription coverage. Further, a handful of states only require private insurers to provide coverage. Of course, the larger the number of insurers required to cover annual supply, the more women can access it. For example, Medicaid insures nearly half of women living in rural areas—meaning that states with large rural populations may want to prioritize public coverage. Access to a pharmacy is increasingly challenging for these women, so annual supply means fewer long-distance trips for refills.

The second component is cost. Most states that allow annual supply also require insurers to cover the entirety of a birth control prescription at one time without cost sharing, but Kaiser Family Foundation analysis found that nine do not. Requiring insurers to cover a 12-month supply with a single pharmacy visit is critical to ensure patients benefit from the annual supply model. While the majority of insurance plans are required to comply with federal law that prohibits cost sharing for contraception, federal guidelines do not require insurers to cover 12 months at one time. Thus, states cannot assume that insurers will comply with their terms.

The Significance of Policy Implementation

A recent study focused on Medicaid enrollees found that while many states now allow annual supply, the model has low uptake due to poor policy implementation and enforcement. Specifically, the study found that the change in proportion of a 12-month supply being dispensed was less than 1 percentage point in 10 of the 11 states that required a 12-month supply at the time. Further, it suggests that the poor uptake stems from myriad implementation challenges—which helps explain why the results are at odds with prior evidence of benefits and cost savings to both insurers and patients.

Therefore, states should focus on comprehensive implementation to better realize the benefits of an annual supply model. The primary challenges—insurer compliance and patient uptake—are largely awareness issues. A study on Massachusetts providers found that prescribers had little awareness of their new ability to offer annual supply to a patient, while pharmacists had low awareness of annual supply laws and, notably, no training to comply with the law when dispensing contraceptives. This means the delivery chain for birth control prescriptions—from prescriber to pharmacist to insurer to patient—is ill equipped to deliver on any new prescribing or dispensing guidelines for contraception. Experts in California attribute the state’s higher uptake of annual supply to its “long-standing and robust publicly funded family planning network,” which may have provided more effective guidance and training to its delivery chain. When implementing annual supply, state health departments or related agencies must provide new, actionable guidance for practitioners as well as for patients.

Conclusion

Annual supply of birth control can save time, money, and effort for patients, pharmacists, prescribers, and insurers. Research shows that the annual supply model causes fewer refill delays, thereby decreasing unintended pregnancies and abortions. Ultimately, insurers also save money when patients who wish to avoid unintended pregnancy or abortion can do so more effectively. Yet implementation has brought challenges in many states, leading to relatively few annual supply prescriptions being written or collected. To avoid these challenges, the most important considerations for annual supply policy are as follows:

1. Encourage all insurers operating in the state to cover annual supply. Some states currently require either public or private insurers (but not both) to cover annual supply, meaning less uptake and fewer benefits for women across the country. This is a state-level decision that depends on its population makeup; however, the potential cost savings to insurers—as evidenced by the VA—means that every state should encourage insurers to offer annual supply and work with them to implement it.
2. Insurers must offer no-cost coverage for annual supply. While federal law mandates that most insurance plans cover birth control without co-pay, it does not extend this to annual supply. While most states with annual supply also mandate that insurers cover 12 months of contraception without co-pay, not all of them do. This also likely leads to poor uptake.
3. States must offer guidance on the contraception prescription-delivery chain. Research shows very little awareness or training across the chain of prescribers, pharmacists, patients, and insurers to comply with the new policy.