What is Pharmaceutical Care Management Association (PCMA) v. Mulready and how does it affect me?

PCMA v. Mulready was a case out of Oklahoma that raised the question of whether the state had the right to regulate health plans. Up until this case, there was an assumption that ERISA, or the Employee Retirement Income Security Act of 1974, protected employers from the state regulating the health care plans they chose for their employees.

It may sound complicated but essentially, there was a federal umbrella that all employers lived under when they did the arduous and complicated task of choosing the health care plan that they felt was right for their employees. That umbrella is commonly referred to as ERISA. It was especially helpful for those companies that have footholds in many states and not just one. They didn’t have to tailor the plan by state but could have a reasonable amount of uniformity because they were protected by that federal umbrella.

The Mulready case tested the boundaries that ERISA had around companies. It was a brought on by The Pharmaceutical Care Management Association (PCMA) against Glen Mulready, Oklahoma’s insurance commissioner. The suit was in response to the ever-pressing amount of legislation against freedom of choice by the state of Oklahoma. The Oklahoma law in question would have specifically restricted pharmacy benefit companies and health plans from designing quality-enhancing and cost-reducing pharmacy networks that advance plan affordability and choice.

Ultimately the court sided with PCMA. This win sends a message to the rest of the country that states do not have the right to overregulate an already working system. “The Mulready decision protects employer-sponsored health coverage by promoting employers’ choice and flexibility over benefit design. It is clear that ERISA and Medicare Part D are the law of the land for benefits organized under these federal programs,” said Jack Linehan, General Counsel, PCMA.

All of us benefit from choice within the imperfect healthcare system. It gives us the benefit of lower costs. It creates a healthy competition that drives down the cost of our prescriptions. The court’s decision supports the interests of employers and their employees alike who seek to follow a common set of legal requirements for the benefits they provide to millions of Americans. This win for the PCMA is a direct defeat of state legislation that would make health insurance coverage a costly, inefficient mess across our country.

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