For Eight Million Enrollees, Coverage -- But Not Care
by Sally C. Pipes
Forbes.com
April 21, 2014
Last week, the Obama Administration announced that eight million Americans had signed up for insurance plans through Obamacare’s exchanges.
As they look their policies over, enrollees may be surprised to find that they severely restrict access to prescription drugs. Consequently, they may force enrollees to choose whether to sacrifice their physical — or their financial – health.
Federal officials may view curbs on drug coverage as a way to keep insurance costs down. But patients may respond to miserly drug coverage by foregoing necessary treatment. If they do, their treatable health problems will fester. The end result will be higher costs across the entire healthcare system.
Obamacare requires all insurance plans sold in the exchanges to cover prescription drugs. The law denotes the level of coverage with four metal monikers — bronze, silver, gold, and platinum. Bronze plans are the least generous; platinum ones, the most.
Coverage isn’t cheap. According to a recent study by Avalere Health, the average monthly bronze premium for a 27-year-old nonsmoker is $181; a silver premium for the same person runs $258.
The average exchange plan technically covers more than half of all available medicines, according to Avalere. But “cover” means little if patients have to foot the bulk of their pharmacy bill.
Most patients are familiar with shouldering some of the cost of their prescription drugs. They may make a flat copayment of, say, $25 at the pharmacy each time they refill a prescription.
In other cases, coinsurance — whereby a patient assumes responsibility for a percentage of the total drug bill — is the rule. For instance, if a drug cost $1,000, and the enrollee’s policy levies a coinsurance rate of 20 percent for that drug, he’d pay $200.
Policies sold in the exchange typically require copays for cheaper, generic drugs and coinsurance for more expensive, brand-name drugs. According to the same Avelere study, the average silver exchange plan imposes coinsurance on about half of brand-name drugs.
For specialty drugs, cost-sharing requirements are even more burdensome. For instance, in the average silver plan, coinsurance applies for more than 70 percent of multiple scelorosis (MS) agents.
Coinsurance can grow expensive — and fast. The Avalere study revealed that among silver exchange plans, alkylating agents used to treat cancer can cost $112 per fill. Coinsurance rates for antipsychotics used for schizophrenia and bipolar disorder average a whopping 40 percent.
Gleevec, a widely used cancer drug, has coinsurance rates as high as 30 percent in exchange plans. The cost to patients, according to the Leukemia & Lymphoma Society? More than $2,000 a month.
The exchanges’ miserly coverage is even more problematic because the folks shopping there disproportionately need the specialty drugs the plans skimp on. An Express Scripts analysis revealed that six in every 1,000 exchange-plan prescriptions were for HIV drugs. That rate is nearly four times higher than in non-exchange plans.
And despite their greater need for specialty drugs, those shopping in the government portals pay more for their meds than do folks outside the exchanges. Avalere calculates that exchange enrollees covered a greater share of their drug costs in the first two months of their plan than did non-exchange enrollees.
On the whole, drug cost-sharing is 34 percent higher in Obamacare’s metal plans than it was in pre-reform policies.
So while Obamacare says that its exchange plans must “cover” prescription drugs, patients could still have to shell out hundreds or even thousands of dollars for their medications.
That is, if they decide to take their drugs at all. According to a study by the Journal of Clinical Oncology, cancer patients with higher co-payments were 70 percent more likely to stop taking their cancer treatment and 42 percent more likely to skip doses.
Skipping medication for chronic conditions can lead to more acute health problems. Cancer drug Imatinib raises the five-year survival rate for chronic myeloid leukemia (CML) to 89 percent if patients adhere to their drug regimen. Missing even 15 percent of doses can lead to relapse.
But pharmaceuticals don’t just save lives; they save money. According to a study by Columbia University professor Frank Lichtenberg, every dollar spent on pharmaceuticals reduces hospital expenditures by $3.65.
Another study by Health Strategies Network showed that blood thinners that cost just $1,095 can effectively prevent a stroke — an event that can yield about $100,000 in lifetime medical costs.
The Obama Administration is understandably proud of beating its own enrollment goals for the exchanges. Unfortunately, enrollees are finding that the products they’ve bought won’t meet their health needs. Obamacare may have given them access to insurance — but not to affordable care.
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