How Specialty Tiers Impede Affordable Care
By David Charles, MD and Amanda Conschafter, blog editor
Earlier this month, HHS announced major improvements to HealthCare.gov, marred since last fall’s open enrollment by website glitches, extensive wait times and cyber hackers. With any luck, patients now will have easier access to information about their coverage options. But can those who do purchase insurance through the exchange get access to their medications?
Born of the landmark Affordable Care Act, exchange health care policies increasingly demand un-affordable cost-sharing from patients. When patients can’t afford to pay, they forfeit medicines that treat, stabilize or even cure them.
True, the Affordable Care Act limits to what extent insurers can adjust monthly premiums based upon patients’ medical conditions. But many insurers now offset their losses by requiring patients to pay more out of pocket for medications and other deductibles.
This occurs most often through specialty tiers structures, which categorize medications based upon their cost. The higher the tier, the higher the out-of-pocket cost to patients. Lower tiers include common generic drugs and typically require a flat co-payment, say $15. But the highest tiers often mandate co-insurance, requiring disproportionately higher cost-sharing and sometimes unmanageable out-of-pocket expenses for patients.
Research reveals specialty tiers to be a serious concern for patients. In May, Milliman, Inc. issued findings that federal and state-offered Silver plans, selected by the majority of exchange consumers, require cost-sharing that’s 38 percent more than that of typical employer-sponsored plans.
Similarly, Avalere Health published an analysis suggesting a cost-sharing discrepancy for patients with chronic or serious illnesses. In seven of the drug classes Avalere studied, one-fifth of Silver plans carried a patient co-insurance requirement of 40 percent or higher.
Patients battling cancer and other serious chronic illnesses do often bear the brunt of specialty tier policies. Their medications, sometimes life-saving, are expensive. But disease has affected some of these patients’ ability to maintain their jobs; they simply cannot afford to pay up to 40 percent of their medication’s cost out of pocket at the pharmacy counter.
The disproportionate effect on specific patient groups has spurred some to call such policies discriminatory. The nonprofit AIDS Institute recently filed a federal discrimination complaint against four insurers in Florida. The organization accused the insurers of using specialty tiers to dissuade patients from purchasing coverage with them.
The AIDS Institute isn’t alone. Hundreds of patient advocacy organizations, including the Leukemia & Lymphoma Society, the National Kidney Foundation, and the American Lung Association, have complained to HHS Secretary Sylvia Matthews Burwell about the effect of insurers’ policies on the patients they represent.
Discriminatory or not, these policies have a visceral effect on patients. Physicians know from experience that higher out of pocket costs for prescription drugs means fewer patients can purchase and take their medication. Faced with difficult financial decisions, patients may fall into nonadherence, perhaps waiting longer to refill their prescription or skipping days between doses. The more crucial the medicine, the more detrimental these behaviors prove for patients.
And in a nation preoccupied with ballooning health care costs, non-adherence can also increase medical expenses. Patients who deviate from their prescribed medicine regimen make more emergency room visits, may require hospitalization or nursing home placement, and can experience reduced quality of life.
One could argue that the federal exchange’s first year went to tackling implementation problems. But to achieve access to affordable care for all, the administration must now address whether patients with exchange insurance plans can actually receive the care prescribed by their physicians.
David Charles, M.D. is a practicing neurologist in Nashville, Tenn. and chairman of the Alliance for Patient Access.
Amanda Conschafter is blog editor for the Institute for Patient Access.