Insurers Use Higher Drug Costs to Discourage Sick Patients from Enrolling

Public health advocates are again accusing some insurance companies of trying to sidestep the Affordable Care Act (ACA) by dodging the requirement that prohibits denying someone coverage because of a pre-existing condition.

In an article published Jan. 29 in the New England Journal of Medicine, authors Douglas B. Jacobs, a student of public health and medicine at the Harvard T.H. Chan School of Public Health and the University of California, San Francisco, and Dr. Benjamin D. Sommers, a T.H. Chan professor, say lifesaving HIV medications have been priced out of reach.

They explained that, by placing all HIV drugs in the highest cost-sharing tier, enrollees do not have the option of choosing generic or preferred brand-name drugs.

“This effect suggests that the goal of this approach — which we call ‘adverse tiering’ — is not to influence enrollees’ drug utilization but rather to deter certain people from enrolling in the first place,” they wrote. In their research, they analyzed 12 states using the federal insurance exchange, including six states with insurers already accused of adverse tiering in a May 2014 complaint to the Department of Health and Human Services (HHS), and the six most populous states without any of those insurers.

“We found evidence of adverse tiering in 12 of the 48 plans — 7 of the 24 plans in the states with insurers listed in the HHS complaint and 5 of the 24 plans in the other six states,” the authors concluded. “The differences in out-of-pocket HIV drug costs between adverse-tiering plans (ATPs) and other plans were stark. ATP enrollees had an average annual cost per drug of more than triple that of enrollees in non-ATPs ($4,892 vs. $1,615), with a nearly $2,000 difference even for generic drugs.”

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Even after factoring in lower premiums for ATPs and the ACA’s cap on out-of-pocket spending, the authors estimated that adverse-tiering plans result in a person with HIV paying an extra $3,000 a year.

AIDS Service Organization Does the Math Insurers Won’t

None of this comes as a surprise to John Peller, president and CEO of the AIDS Foundation of Chicago (AFC).

AFC officials sifted through reams of red tape to put together a guide to help its clients make decisions when buying insurance on the Illinois exchange. The guide, released in December 2014, shows medication coverage for each plan and gives examples of what a person with HIV would end up paying.

money jar

Peller explained that it’s important work because it isn’t something that’s easy to figure out when shopping on the exchanges for most plans.

“It took us two AFC staff, each working probably 40 hours, to pull all of this information together. It’s obviously incredibly complicated,” he said.

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Not every state or community has an agency with resources like AFC.

The authors argue in their paper that insurance companies need to be doing the type of work AFC is doing to make choice selection more transparent on the exchanges. Most plans do not offer the “estimated price to enrollee” on their formularies, the authors noted.

Peller agreed, saying that Humana is the only Illinois insurer that does so.

“It really shouldn’t be difficult to make sure you’re looking at the right formulary for the right plan,” he said.

Another way to remedy the problem would be to establish protected conditions in drug formularies, the authors suggested, “including those used for HIV, seizures, and cancer, in order to maintain patients’ access to them.”

Caps could be placed on cost sharing for medications for people with these conditions, the authors stated.

Insurers Reach Agreements with State of Florida

Meanwhile, two insurance companies accused of the practice in Florida both told Healthline they have voluntarily worked with the Florida Office of Insurance Regulation to make sure they’re compliant with that state’s law.

“Florida has a unique law providing insurance-related protections to individuals with HIV/AIDS,” a Humana spokesperson said in a statement. “While the Florida Department of Insurance made no findings that Humana was not complying with the law, we understand the affordability challenges facing those with HIV/AIDS due to the relatively high cost of their specialty medications.”

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Humana has now moved all generic and brand drugs that cost less than $600 a month off the specialty tier, and HIV/AIDS drugs that remain on the higher tier have a 10 percent coinsurance rate.

“Humana is committed to work with pharmaceutical manufacturers and organizations representing individuals with HIV/AIDS and similar organizations for people with complex chronic conditions to develop longer-term strategies addressing these underlying concerns of pharmaceutical access and affordability,” the company spokesperson stated.

CoventryOne, also mentioned in the Florida complaint, told Healthline they too have moved all generic HIV/AIDS drugs to the nonpreferred generic tier.

Access to Medications: A Public Health Issue

In Illinois, patient advocates are urging the adoption of legislation that caps patient copays.

The Illinois Coalition for Access to Affordable Medication includes AFC as well as the American Cancer Society Cancer Action Network, the American Heart Association, the American Liver Foundation, the American Lung Association, and others.

This also is a problem of HIV medications being too expensive, and it’s a problem manufacturers created for themselves.
John Peller, AIDS Foundation of Chicago

Peller said similar laws have been enacted in Delaware, New York, and Louisiana.

Peller emphasized that insurance companies should not be expected to take all the blame when it comes to people with HIV gaining access to the medications they need.

“This also is a problem of HIV medications being too expensive, and it’s a problem pharmaceutical manufacturers created for themselves,” he said. “We think there’s two parties who need to come to the table and look at their business practices.”

He said the other thing to remember is that HIV medication isn’t just for people with HIV anymore. People at risk of contracting HIV can now take an HIV medication called Truvada (emtricitabine/tenofovir) as pre-exposure prophylaxis, or PrEP.

HIV medications are not just for treatment anymore. They’re also for prevention.
John Peller, AIDS Foundation of Chicago

“HIV medications are not just for treatment anymore. They’re also for prevention. If the public health goal is to prevent the transmission of HIV, then HIV medications for prevention also must be part of the conversation, and we need to make sure they are affordable,” he said.

Research also shows that people who are on HIV medication can have viral loads so suppressed that the risk of transmission is close to zero, a phenomenon known as “treatment as prevention.” As a result, keeping people with HIV on their medication is a public health issue we should all care about.

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