Health Plans Shift Pharmacy Costs onto Vulnerable Patients
March 19, 2012 – Industry insiders and patients are raising alarm about what they’re calling an insidious trend in the price of life-saving pharmaceuticals by insurance companies, which began shifting, they say, an unprecedented burden of drug costs onto people with chronic diseases.
More people are having to pay upwards of 30 to 50 percent for medications that can cost $600 a month, compared to $35 copayments last year, said Shelley Bailey, owner of Central Pharmacy in downtown Portland.
“From my perspective, this is just a way to shift the cost of medications onto consumers,” Bailey said. “The theory behind tiers was to get people to try the lowest-cost medications first, but now the goal seems to be to get the sickest consumers to pay as much as possible. You can tell people that once they get to the out-of-pocket maximum they’ll be fine, but a lot of people’s out-of-pocket cost is over $3,000 a year.”
After paying nothing for her medication last year, Megan Helzerman of Portland who suffers from rheumatoid arthritis, is being charged about $500 per month for the same regular infusions of Actemra. A curriculum developer who manages federal grants, she’s been on the same insurance plan through the Oregon Educator Benefits Board’s arrangement with Providence.
“The change for me was a big one in that I have to pay 20 percent of the full cost of an office visit, and before October, it was just a $25 co-pay,” Helzerman said. “It just happened overnight, and I received no warning that would have allowed me to switch to a better plan this year.”
Patients move to these specialty tiers based on their agreements with employers, Bailey said. But if a person has individual coverage, they frequently don’t ask if there’s been a change in their benefits. They also have to pay the higher price when they pick up their medications, unlike at a hospital or clinic, where tests and visits can be billed to their insurance company.
“It’s not very transparent to have a pharmaceutical benefit, but to have all of these specialty tiers in the fine print,” she said.
What’s good social policy?
The “cafeteria” theory that the free market should allow everyone to buy healthcare doesn’t make sense to Bailey because a person is not likely to get healthcare when they’re healthy. Many of the people who Bailey sees affected by the specialty tiers are teachers and other middle-class professionals who are cash-strapped.
“From a pure business perspective, we want people to have a healthy life and work, and even if you didn’t care about the well-being of a fellow man or woman, there’s the productivity issue,” she said.
Insurance companies could save money over the long run by encouraging people with chronic conditions to take their medications – not put up barriers by adding tiers to their pricing schedules, said John Motter, the speaker’s bureau coordinator with the Cascade AIDS Project, who was diagnosed with HIV in 1998. He said that most of the 5,000 people in Oregon diagnosed with HIV have coverage through their employers.
“It’s short-sighted on the insurance companies’ part, to put it in a nice way, and it’s greed, if you want my personal opinion because it’s not like we have a choice,” he said.
This year his out-of-pocket costs will approximately double to $4,200 for his coverage through HealthNet, his Medicare supplement, with about $2,800 going for a four-week treatment of Hepatitis C drug Incivek (generic Telaprevir), which is only available through Vertex Pharmaceuticals Inc. in its patented form.
“They’ve moved my life-saving medications to the highest tier, and I don’t have the option of skipping doses, like a lot of folks who still find some effect from half the prescribed dose,” he said. “It keeps me out of the hospital and having a productive life, but now I’m paying much more to help them keep me healthy.”
HealthNet offers plan options
Among insurers, HealthNet hasn’t changed its benefit structure and shifted pharmaceutical costs on its individual policies, said Brad Kieffer, HealthNet communications director. But, he said, people might have seen a change in their copayments because of changes by employers.
“We provide employers with a number of options that would best fit their needs,” he said. “Anytime an employer makes a change, we expect that the employer is communicating with their employees, and we follow up with documentation that spells out very clearly the changes made.”
HealthNet’s most common plan has a $15 co-pay for “preferred generics” at the first tier, $30 co-pays at the second tier (generally for preferred brand names) and $50 co-pays at the third tier which includes “non-preferred medications.” A less common plan involves $10 co-pays in the first tier, $50 co-pays in the second tier and 50 percent co-insurance for the third, Keiffer said.
“The idea is to encourage the use of generics, while still providing affordable prescriptions through a range of options,” he said. “The majority of chronic conditions have medications available at the tier-one and tier-two levels.”
HealthNet gives its members several choices for medications treating the same conditions. For example, someone needing drugs for a peptic ulcer can choose from first-tier generics Omeprazole, Lansoprazol and Pantoprazole, which are produced by various manufacturers. In the second tier, Aciphex is manufactured by Eisai. Tier 3 includes Nexium (manufactured by AstraZeneca) and Dexilant (manufactured by Takeda).
Call for legislation
By changing the tier level of a certain drug and increasing the copayment, people with serious illnesses may be unable to afford the medications. The Arthritis Foundation, a national nonprofit advocacy group, launched a nationwide survey that gathered nearly 900 stories showing that this is a growing problem.
“A lot of people are having difficulty accessing these expensive medications, but these medications are keeping people out of wheelchairs,” said Amy Melnick, the Arthritis Foundation’s vice president of national advocacy.
Last fall the Arthritis Foundation’s governing board “strongly” recommended that both federal and commercial insurance plans cap out-of-pocket costs for critical therapies at “affordable levels” to insure access and prohibit the “discriminatory practice of specialty-tiers.”
Meanwhile, advocates aren’t waiting for insurance companies to take action. They’re hoping that state lawmakers will follow the lead of New York, which became the first state to outlaw the use of specialty tiers in 2010.
“Absent of enough consumers going to their legislators and putting protections in place for this type of practice, the misuse of tiers will continue to occur,” Bailey said.
Right now, Bailey said the only way a patient can get a lower price under the specialty tier arrangement is by getting a physician’s signature, asking their health plan to make such a change which, she added, isn’t always easy to come by.
Image for this story appears courtesy of The Oregonian.