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Have Insurers Found Way Around Obamacare 'Pre-Existing Conditions' Rule?
Analysis suggests hiking drug co-pays may help eliminate people with certain illnesses
By Dennis Thompson
WEDNESDAY, Jan. 28, 2015 (HealthDay News) -- Some insurance companies may be using high-dollar pharmacy co-pays to flout the Affordable Care Act's (ACA) mandate against discrimination on the basis of pre-existing health problems, Harvard researchers claim.
These insurers may have structured their drug coverage to discourage people with HIV from enrolling in their plans through the health insurance marketplaces created by the ACA, sometimes called "Obamacare," the researchers contend in the Jan. 29 issue of the New England Journal of Medicine.
The companies are placing all HIV medicines, including generics, in the highest cost-sharing category of their drug coverage, a practice known as "adverse tiering," said lead author Doug Jacobs, a medical student at the Harvard School of Public Health.
"For someone with HIV, if they were in an adverse tiering plan, they would pay on average $3,000 more a year to be in that plan," Jacobs said.
One out of every four health plans placed commonly used HIV drugs at the highest level of co-insurance, requiring patients to pay 30 percent or more of the medicine's cost, according to the researchers' review of 12 states' insurance marketplaces.
"This is appalling. It's a clear case of discrimination," said Greg Millett, vice president and director of public policy for amfAR, The Foundation for AIDS Research. "We've heard anecdotal reports about this conduct before, but this study shows a clear pattern of discrimination."
However, the findings by definition show that three out of four plans are offering HIV coverage at more reasonable rates, said Clare Krusing, director of communications for America's Health Insurance Plans, an insurance industry group. Patients with HIV can choose to move to one of those plans.
"This report really misses that point, and I think that's the overarching component that is important to highlight," Krusing said. "Consumers do have that choice, and that choice is an important part of the marketplace."
The Harvard researchers undertook their study after hearing of a formal complaint submitted to federal regulators in May, which contended that Florida insurers had structured their drug coverage to discourage enrollment by HIV patients, according to background information in the paper.
They decided to analyze the drug pricing policies of 48 health plans offered through 12 states' insurance marketplaces.
The researchers focused on six states mentioned in the U.S. Department of Health and Human Services (HHS) complaint: Delaware, Florida, Louisiana, Michigan, South Carolina and Utah. They also analyzed plans offered through the six most populous states that did not have any insurers mentioned in the HHS complaint: Illinois, New Jersey, Ohio, Pennsylvania, Texas and Virginia.
The researchers' analysis compared cost-sharing for a commonly prescribed class of HIV medication -- nucleoside reverse-transcriptase inhibitors, or NRTIs. They specifically looked for plans that had placed all versions of these drugs, both brand-name and generic, in categories that required patients to pay 30 percent or more of the cost.
About 25 percent of the plans used discriminatory cost-sharing for NRTIs, the researchers concluded. HIV patients in those plans on average paid three times more for HIV medications than people in other health plans, according to the report.
Even though annual premiums in the plans tended to be lower than other plans, the high cost of HIV drugs meant that, on average, a person with HIV would pay $3,000 more for treatment each year than if he or she had instead enrolled in a plan with lower drug co-pays.
"It's clearly a violation of a host of discrimination provisions that were set out in the Affordable Care Act," said Lydia Mitts, a senior policy analyst for Families USA, a health consumer advocacy group.
Mitts argued that state and federal regulators should crack down on these plans, and not allow them to be offered on the marketplace.
"We need to solve this problem before it reaches consumers and consumers are adversely affected by it," she said. "State and federal governments need to do a better job of oversight."
It's not just a problem for HIV patients, either. Another recent study analyzed drug coverage for several other high-cost chronic conditions -- mental illness, cancer, diabetes and rheumatoid arthritis -- and found that at least half of marketplace plans had engaged in discriminatory cost-sharing for one or more of those illnesses, Jacobs said.
Jacobs said his concern is that if patients with chronic conditions start gravitating toward plans that offer better coverage for their medications, then those plans would feel economic pressure to increase drug co-pays as well, sparking a "race to the bottom."
But this shouldn't happen due to other provisions of the ACA, Krusing said. Health care reform also included a permanent risk adjustment program that requires health plans covering healthier and lower-cost patients to make payments to plans that wind up with sicker patients whose care costs more.
"There's no financial incentive for plans to enroll a population that's more healthy," Krusing said. She also noted that the law caps the amount of money people must pay in out-of-pocket costs, and offers cost-sharing subsidies for hard-strapped patients.
Regardless, the federal government already appears to be taking action, Mitts noted. In November, HHS released a proposed rule clarifying its stance on discriminatory drug coverage.
"If an issuer places most or all drugs that treat a specific condition on the highest cost tiers, we believe that such plan designs effectively discriminate against, or discourage enrollment by, individuals who have those chronic conditions," the proposed rule states.
Mitts urges customers to call regulators if they feel they are in a plan with discriminatory cost-sharing.
"It's important for consumers to know that if they find themselves in plans like this, they should be reporting it to their state insurance commissioner, the HHS Office of Civil Rights, and their health insurance marketplace," she said.
For more on the Affordable Care Act, visit the U.S. Department of Health and Human Services.
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