Some Virginia health insurance plans are jeopardizing patient health by moving vital medications to the highest cost-sharing tier which place the cost of treatment beyond reach for most patients.
Insurers in Virginia are currently free to move all drugs in a class (i.e., those available to treat a certain condition) to the top pricing tier of their formularies, requiring patients to pay a percentage of the total cost of their drugs, rather than a manageable and fixed copay. This common practice, known as “adverse tiering,” can result in hundreds or even thousands of dollars per month in additional out-of-pocket costs for even a single medication. And because adverse tiering applies to all drugs in a class available to treat a condition, it often leaves patients with no other option.
A patient with a traditional fixed copayment, for example, might be $10, $20 or $50 for a 30-day supply of medication, while a patient whose same medication is placed on the highest cost-sharing tier could pay between 25-40 percent of the total cost of the medication. According to pharmacy benefit manager Prime Therapeutics, the average cost of a specialty medication, which includes newer biologic medicines, exceeds $3,000, while some cost as much as $50,000 for a 30-day supply.
Although any Virginian might be affected by high co-insurance, those patients most affected by adverse tiering include Virginians living with chronic illnesses such as rheumatoid arthritis, hemophilia, multiple sclerosis and those with life-threatening conditions such as HIV, breast cancer, colorectal cancer and leukemia.
Many patients with these conditions must take multiple medications to improve the quality and duration of their lives, and the drugs necessary to treat these conditions are typically newer, produced in lesser quantities than other drugs, and not available as less expensive generics.
Patients who cannot afford their medication often cut back on treatment or stop taking their medication altogether, which can lead to more rapid disease progression, a deterioration in health, and increased health care costs in the form of unnecessary hospitalization and emergency services, additional physician visits, etc.
Research indicates that patients cease taking their prescriptions when the patient coinsurance or cost-sharing burden exceeds $100. The high cost of these medications can be difficult for a family to absorb, often leaving no option but to cut back on a drug’s use or stop taking it altogether. Non-adherence to medication regimens not only have a direct impact on health and disease progression – it contributes direct annual costs of $100 billion to the US health care system. Indirect costs exceed $1.5 billion annually in lost patient earnings and $50 billion in lost productivity (Goldman D.P., et al. (2004). Pharmacy benefits and the use of drugs by the chronically ill. JAMA, 291(19): 2344-2350).
Despite the protections in the ACA, consumers are still exposed to significant cost-sharing. While the ACA establishes a maximum annual limit on out-of-pocket spending, spending for individual services and drugs is not capped. This means that at the point of sale or service, consumers can be faced with substantial out-of-pocket expenses in the form of deductibles, co-pays, and co-insurance.
Additionally, things like out-of-network providers, services, and drugs that are not covered and non-essential health benefit services do not apply to the annual out-of-pocket maximum.
The purpose of health insurance is to protect patients from significant health care costs by pooling the risk of an entire group. When insurers move all treatments for a disease to the highest cost-sharing tier – they pass the financial burden of health care onto the most vulnerable patients and require patients with certain conditions to pay much more out of pocket for necessary drugs than they do for other treatments and services.
Virginians with insurance pay their monthly premiums with the understanding that when they need medical attention – medicine or a test, for example – the health insurer will be there to share the financial burden. Due to benefit design discrimination and adverse tiering, many Virginians are having the rug pulled from under them and left unprotected from financial hardship when they become ill.
No Virginian should have to choose between paying for their medicine and food or rent; or between taking the medication they need to get healthy and providing for their family.
Virginians with insurance demand only what is fair – affordable access to the coverage they have paid for.
Fair Copay VA urges Virginia legislators to stand with patients and support legislation (Senate Bill 442) to prevent insurers from discriminating against patients by moving all treatments for a disease to the highest cost-sharing tier – a practice known as “adverse tiering.”
For additional resources on benefit design discrimination, adverse tiering, and the impact of rising patient out-of-pocket costs, click here.