Obamacare will require heftier copays for pricey drugs
Substantially more health plans on the federal insurance marketplaces require consumers next year to pay a hefty portion of the cost of the most expensive drugs, changes that analysts say are intended to deter persistently ill patients from choosing their policies.
The class of medicines known as specialty drugs often treat chronic illnesses such as multiple sclerosis, rheumatoid arthritis, HIV, hemophilia, some cancers and hepatitis C. Individual doses can be priced at more than $600. Many newer medicines cost $5,000 to $10,000 a month. That means patients with even a small cost-sharing requirement have to come up with thousands of dollars. For many patients there are no cheaper and equally effective alternatives.
In the four years that the HealthCare.gov marketplaces have existed, plans requiring consumers to pay roughly a third or more of the cost of specialty drugs have expanded to 63 percent of all offerings from 37 percent, according to a Kaiser Health News analysis.
High cost sharing is one reason that the marketplaces have been subject to criticism. The marketplaces, also called exchanges, may be phased out by a hostile Republican Congress and new president. Nonetheless, they remain important in 2017 — and possibly longer — for the millions of people who are buying insurance on or off the marketplaces.
Six of every seven policies in Maine, Missouri, New Jersey, Tennessee and Illinois, and every plan in Alaska, require consumers to pick up 30 percent or more of the cost of specialty drugs, the analysis found. Around the nation, some plans make consumers split the cost of these drugs with the insurer, and a few make consumers pick up the majority of the tab. In West Virginia, five Highmark Blue Cross Blue Shield plans require a $1,000 copayment for each specialty drug prescription.
As a practical matter, people relying on specialty drugs quickly run through their deductibles and maximum annual out-of-pocket costs, which next year will be no more than $7,150 for individuals. After that, the insurer must pick up the entire cost.
Researchers suspect some insurers are designing their plans with stingy specialty drug benefits to discourage patients who need them from signing up in the first place.
“Plans are no longer able to actively exclude people based on health status, but they still have an incentive to try to end up with healthier enrollees,” said Benjamin Sommers, a health economist at Harvard’s T.H. Chan School of Public Health. “This isn’t just about drugs. These drugs can be a signal of other types of high health care spending. The people who use them have conditions that make them more likely to end up in the hospital or emergency room.”
Ben Woodworth, a 28-year-old in Atlanta, said he pays $380 a month for medications that prevent his body from rejecting a transplanted kidney. The Blue Cross Blue Shield of Georgia policy he is considering for next year, which is not sold on the exchange, would require him to pay either 40 or 50 percent of the price of specialty drugs, depending on how the insurer classifies them.
“What seems so unreasonable about it was that for many years, on several different insurance plans, I paid no more than $20 a month” for the drugs, said Woodworth, who had previously been covered through a university at which he was studying or by his parents’ plan. “To have that suddenly turn into about $400 a month was hard.”
Even with high cost sharing, people using specialty drugs are less vulnerable financially than they were before the Affordable Care Act created the marketplaces. In addition to the limits on how much patients have to pay, insurers can no longer refuse to sell policies or charge more based on consumers’ health. The government also pays for much of the cost sharing for lower-income people in the marketplaces, although this, too, is on the chopping block of a Republican Congress.
The insurance industry and President Barack Obama’s administration say benefit changes are a reaction to the increasing cost and use of the medicines, especially unique ones where drug makers can dictate prices. Express Scripts, a pharmacy manager, estimated 576,000 people took more than $50,000 worth of medications during 2014.
“Rising prescription drug costs are an issue throughout the health care system, especially specialty drugs,” said Aaron Albright, a spokesman for the Department of Health and Human Services.
Kristine Grow, a spokeswoman for the trade group America’s Health Insurance Plans, denied that insurers are raising cost sharing to avoid expensive patients. “The true issue here is that the ever-increasing costs of specialty drugs are simply unsustainable,” she said.
But Caroline Pearson, an executive at the health consulting firm Avalere, said insurers have an incentive to repel patients in poor health because of flaws in the government’s method of reimbursing them if they get an unexpectedly large share of very ill customers.
“The model doesn’t adjust for the severity of your disease,” she said. For instance, she said, the government recognizes that a rheumatoid arthritis diagnosis means a patient is sicker than many others, but people with severe cases and mild ones are considered to be equal in health. People who use specialty drugs are more often suffering from acute ailments than are those who use other types of medicines, she said.
“It’s effectively a race to the bottom,” Pearson said. “You don’t want to be the single plan in a region with really good coverage for high-cost conditions.”
The government is proposing tweaks to its models that would do a better job of assessing patient health, but that would not take effect next year.