Eliminating discrimination on the basis of preexisting conditions is one of the central features of the Affordable Care Act (ACA). Before the legislation was passed, insurers in the nongroup market regularly charged high premiums to people with chronic conditions or denied them coverage entirely. To address these problems, the ACA instituted age-adjusted community rating for premiums and mandated that plans insure all comers. In combination with premium subsidies and the Medicaid expansion, these policies have resulted in insurance coverage for an estimated 10 million previously uninsured people in 2014.1
There is evidence, however, that insurers are resorting to other tactics to dissuade high-cost patients from enrolling. A formal complaint submitted to the Department of Health and Human Services (HHS) in May 2014 contended that Florida insurers offering plans through the new federal marketplace (exchange) had structured their drug formularies to discourage people with human immunodeficiency virus (HIV) infection from selecting their plans. These insurers categorized all HIV drugs, including generics, in the tier with the highest cost sharing.2
Insurers have historically used tiered formularies to encourage enrollees to select generic or preferred brand-name drugs instead of higher-cost alternatives. But if plans place all HIV drugs in the highest cost-sharing tier, enrollees with HIV will incur high costs regardless of which drugs they take. 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.
To explore the implications of this practice, we analyzed adverse tiering in 12 states using the federal marketplace: 6 states with insurers mentioned in the HHS complaint (Delaware, Florida, Louisiana, Michigan, South Carolina, and Utah) and the 6 most populous states without any of those insurers (Illinois, New Jersey, Ohio, Pennsylvania, Texas, and Virginia; for details, see the Supplementary Appendix, available with the full text of this article at NEJM.org). We examined the plans with the lowest, second-lowest, median, and highest premiums on the “silver” level in each state, analyzing formularies and benefit summaries to assess cost sharing for nucleoside reverse-transcriptase inhibitors (NRTIs), one of the most commonly prescribed classes of HIV medications. We chose this example because HIV is associated with high insurance costs, requires lifelong treatment, and is treated with an expensive and disease-specific class of medications. We defined adverse tiering as placement of all NRTIs in tiers with a coinsurance or copayment level of at least 30%. In estimating enrollees' average annual medication costs, we used the negotiated drug price paid by Humana, which makes its prices available online...
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