Some insurance companies are finding ways to get around one of Obamacare’s most popular provisions that requires everyone to be covered equally—regardless of any pre-existing condition.
The anti-discrimination rule was meant to guard against insurers who historically charged higher premiums to sick people. But some insurers are still charging certain patients more by passing the extra costs on in the form of higher drug prices.
By structuring their health plans a certain way, patient advocates say insurers are discriminating against some patients by forcing them to pay the highest tier drug costs for certain prescriptions—or by discouraging them from signing up from the plans, leaving insurers with only healthy patients.
In Florida, for example, four insurers – Cigna, CoventryOne, Humana and Preferred Medical – have been accused of discriminating against people with HIV/AIDS. A recent complaint filed with the Health and Human Services Department alleges that the insurers placed all covered HIV/AIDS prescriptions in the highest drug tiers requiring patients to pay significant out of pocket costs---sometimes an upwards of $1,000 each month.
“By placing all HIV/AIDS medications, including generics, on the highest cost-sharing tier, CoventryOne, Cigna, Humana, and Preferred Medical discourage people living with HIV and AIDS from enrolling in the health plan – a practice which unlawfully discriminates on the basis of disability,” the complaint says.
The complaint says CoventryOne, Cigna, and Preferred Medical—require patients to cover 40 percent of the medication costs out of pocket, and Humana requires patients to cover 50 percent out of pocket. Meanwhile the groups point to insurers like Florida Blue, which offers plans that place the same drugs on lower tiers with co-pays costing between of $10 to $70 based on whether its tier 1 or 2 medication.
“They’re passing the cost along through drug prices, and it’s hard for the patients to know what the costs will equate to. There’s no transparency,” said Carl Schmid, deputy executive director of the AIDS Institute, which along with the National Health Law Program, filed the complaint.
Although insurers are allowed to set their own cost-sharing levels, the new law strictly prohibits them from discouraging people with specific health conditions or creating plans that target certain patients.
Representatives from the accused insurers, for their part, maintain that their prices are in line with industry standards.
Karen Eldred, a spokeswoman for Cigna, told The New York Times that “the company, like many other insurers, offers an array of plans in the federal marketplaces, including some that offer more comprehensive coverage.”
And as the National Journal’s Sophie Novack notes, insurers are charging higher prices for specialty drugs—since they are, for the first time ever, required to cover more expensive individuals with pre-existing conditions. The problem is, as patient advocates point out, it’s not just specialty drugs that have become so costly—it’s generics as well.
Schmid said that discrimination isn’t happening exclusively among HIV/AIDS patients, adding that similar practices are affecting other groups with serious illnesses like cancer patients. He added that although his group is based in Florida, where the complaint is filed, there are likely similar situations happening around the country.
An analysis released in June by Avalere Health (and commissioned by PhRMA) found that the majority of plans sold on the health exchanges placed a significant out of pocket burden on patients with serious illnesses like cancer by requiring high cost-sharing for all medicines used to treat certain conditions. The report found that in seven of 19 classes of medicines for serious illnesses, such as cancer and HIV/AIDS, more than 20 percent of Silver plans—the standard plan on the exchanges-- require patients to pay 40 percent or more out of pocket costs.
Similarly, in 10 of the 19 selected classes, at least 20 percent of Silver plans require coinsurance of 30 percent or greater for drugs in the classes.
The study also finds that more than 60 percent of Silver plans place all covered medications for multiple sclerosis, rheumatoid arthritis, Crohn’s disease and certain cancers in the plan’s highest formulary tier.
“The Exchanges were meant to provide patients access to the medicines they need, especially for the sickest among us. Yet this report paints a very different picture, one in which many Americans still find themselves unable to access the care they desperately need due to high out of pocket costs,” John J. Castellani, President and CEO of PhRMA, said in a statement.
Another issue is transparency. Schmid said right now, it’s difficult to find out if drugs are covered under certain plans. “We had an awful time figuring out which drugs were being offered on the plans as well as what the costs of the drugs were.”
The groups say they want their complaint to prompt HHS to more closely scrutinize all insurers plans submitted for next year.
Insurers have already been submitting their plans for next year, though they won’t be finalized until the fall. “We want it to influence the review of the 2015 plans,” Schmid said. “We hope there will be greater scrutiny when these plans come in about how insurers designed their plans.”
The Center for Consumer Information and Insurance Oversight has also indicated that it will perform an analysis on patient cost sharing before plans are finalized for next year.
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