Obamacare plans bring hefty fees for certain drugs? Really? Well … it depends on what the meaning of “bring” is.
MIAMI (AP) — Breast cancer survivor Ginny Mason was thrilled to get health coverage under the Affordable Care Act despite her pre-existing condition. But when she realized her arthritis medication fell under a particularly costly tier of her plan, she was forced to switch to another brand.
Under the plan, her Celebrex would have cost $648 a month until she met her $1,500 prescription deductible, followed by an $85 monthly co-pay.
Thus begins a deeply (but apparently unintentionally) confusing, yet very important, Associated Press article titled “Obamacare plans bring hefty fees for certain drugs,” published yesterday. (The title may be Yahoo News’s, rather than the AP’s; it’s not clear.)
“‘I was grateful for the Affordable Care Act because it didn’t turn me down but … it’s like where’s the affordable on this one,’ said Mason, a 61-year-old from West Lafayette, Indiana who currently pays an $800 monthly premium,” Kelli Kennedy, the AP writer, continues.
Where, indeed, is the affordable on this one? The essence of the article is that many people who have chronic serious illnesses, including, as Kennedy says, cancer, multiple sclerosis and rheumatoid arthritis–and who, because of a preexisting condition,had had no access to any healthcare insurance or who, like Mason (as Mason explained to Kennedy), had insurance that did not cover treatment for preexisting conditions, are being hit by a specific of their ACA-compliant plan that they did not know about when they bought the plan: an apparently relatively new gimmick insurance companies are using, by which the company categorizes some high-cost drugs as “specialty-tier” drugs and by quietly including in their individual-market plans a 50%- “co-insurance” rate for “specialty-tier” drugs.
“Co-insurance,” it turns out, is a cutesy euphemism for “co-payment” (which is at least a more descriptive term for “what’s not covered by the policy”); it took me two readings of the article to realize that. The policyholder is now an “insurer,” I guess, but with a customer base limited to himself or herself and immediate family members covered under that policy. Sort of like a closely-held corporation. But without the potential for profit.
That’s confusing enough, and led to this, as related by Kennedy:
William Hurd signed up for a Cigna plan with a $616 monthly premium that covered him and his wife in December. The government kicks in about $900 a month in tax credits. Hurd, a 61-year-old diabetic who works a construction job in Orlando, was eager to fill his insulin prescription along with two other medications. But he was shocked when the pharmacy said he would have to pay $1,400 out of pocket for a 90-day supply. He was under the impression that prescriptions were part of the plan and thought he only had a $10 co-pay for prescriptions.
“I already had the plan. I was in and I was ready to cancel it. If I’ve got to pay $1,000 more dollars for drugs … then it’s not worth it,” he said.
Fortunately, Hurd called his doctor and was able to switch to a cheaper brand of insulin and ended up paying only $112.
“This was an extremely expensive misunderstanding,” said his insurance broker Leslie Glogau.
But really confusing is Kennedy’s reference, twice, to ACA-compliant plans bought through ACA exchanges as not private insurance plans.
Kennedy points out that insurance companies are free to place any drug they wish into whatever category they wish. And she notes the strong suspicion by patient advocates that, by categorizing high-cost drugs as “specialty” drugs, insurance companies are trying to evade the ACA’s prohibition against denial of comprehensive coverage, or of coverage at all, because of a preexisting condition by discouraging chronically ill patients from purchasing their plans. But she prefaces the sentence in which she makes that point with this one:
Avalere Health, a market research and consulting firm, estimates some consumers will pay half the cost of their specialty drugs under health overhaul-related plans, while customers in the private market typically pay no more than a third.
And she ends her discussion of William Hurd’s situation by saying that Glogau, his insurance broker, “ran into her own problems with she switched from a private insurance plan to one on the exchange and learned one of her prescriptions was cancelled under the new plan, prompting numerous appeals.”
Ms. Kennedy, please understand: The ACA-compliant individual-market plans are private insurance plans. Customers in the private market who typically pay no more than a third are, presumably, people who have employer-based group plans. But customers in the private market who have employer-based group plans are not the only customers in the private market. Blue Cross, Aetna and Humana are not government agencies.
The ACA-compliant individual-market plans all–all–are private insurance plans. That’s because Connecticut Senator Joe Lieberman made his vote for the ACA continent upon the removal of the “public option” from the bill–and because we have a president who couldn’t trouble himself to make the case to the public for the public option. (Or for much else, of course; the public option was just another casualty of our president’s deliberate, concerted ineffectuality throughout his tenure as president and, best as I can tell, his entire political career.)
Then again, Ms. Kennedy apparently is just using the terminology of Caroline Pearson, the person she spoke with from Avalere Health. Kennedy writes:
Even before the Affordable Care Act took effect, insurers had increasingly begun requiring patients to pay a percentage of the drug costs instead of a flat co-pay, but experts say patients often spend more for their prescriptions in plans offered under the health law because of the co-insurance.
“There’s a significant percentage of plans who are using co-insurance of 50 percent or higher,” said Caroline Pearson, who tracks the health care overhaul for Avalere Health, which studied plans in 19 states. “It is generally a lot higher than what we see in private insurance.”
In other words, contrary to the article’s title’s assertion, Obamacare plans do not bring hefty fees for certain drugs. Some Obamacare plans do not eliminate hefty fees for certain drugs. Before the ACA took effect, Kennedy reports, Mason “paid slightly more for her monthly premium on a plan that didn’t cover her arthritis or pain medications and some routine doctor’s visits.”
Kennedy buried the lead, about six feet under–or, actually, toward the end of the article, where she writes:
Insurers say prescription drugs are one of the main reasons health care costs are rising.
“Spending on specialty drugs is growing rapidly. It’s unsustainable,” said Clare Krusing, spokeswoman for America’s Health Insurance Plans, a trade group that represents the private insurance industry.
Only 1 percent of prescriptions written in 2012 were for specialty drugs, but they accounted for 25 percent of the total cost of prescription drugs, according to a study by America’s Health Insurance Plans.
So there it is, folks. Spending on specialty drugs is growing rapidly. It’s unsustainable. Which is the fault of the ACA. Because the ACA absolutely requires that spending on specialty drugs grow rapidly.
And to think we all thought the Obamacare “mandate” referred to the tax penalty assessed if you don’t purchase insurance! Silly us.
In addition to its seriously-confused, but important, discussion of “specialty tiers” for drugs, the Kennedy article includes another significant bit of information, this one about the failings of so-called regulatory federalism:
Brian Rosen, senior vice president for public policy for The Leukemia & Lymphoma Society, said the group studied premiums and benefits for patients with blood cancer in seven states, including Florida, California, Texas and New York. They found 50 percent co-insurance rates for specialty drugs on several plans in Florida and Texas, while the highest co-insurance rates on California plans were 30 percent and in New York, co-pays were typically $70.
Hmmm. Florida and Texas vs. California and New York state. Makes me want to vote for Ted Cruz for president.