I was contacted by Dominick V. Spatafora, President of the Neuropathy Action Foundation based in Orange County, CA. He wrote an opinion piece about the high cost of Tier IV medications and asked if I would share it with you. The deadline to enroll in Obama Care ended last month, and I have been reading numerous complaints (100s so far) from new enrollees on the Covered California Face Book page, who have no idea what type policy they signed up for, or what a “deductible” actually means. They are really going to “freak” when they find out there are different tiers for medications. I never heard of “tier” medications either until I read Spatafora’s piece:
I am writing today as a multifocal motor neuropathy patient who is prescribed intravenous immune globulin, as well as the founder and president of the Neuropathy Action Foundation (NAF). The NAF is dedicated to ensuring neuropathy patients obtain the necessary resources and tools to access individualized treatment to improve their quality of life. I am extremely concerned about how, in recent years, health plans have been targeting certain chronically ill patients by charging them more for their lifesaving and limb-saving medications and therapies.
Specialty tiers are prescription drug formulary management tools that insurers use to limit their liability and increase the beneficiaries’ share of the costs of certain prescription drugs (sometimes referred to as specialty drugs). These specialty drugs are typically used to treat complex, chronic conditions and are either injected or infused. They may require refrigeration, compounding or other “special” handling. These drugs often do not have generic alternatives and are the only drug available, leaving patients with no effective alternative therapy.
Although any patient might be affected by coinsurance, those patients most affected include those living with specific conditions such as cancer, multiple sclerosis, hemophilia, primary immune deficiencies and certain neuropathies. Health insurance is a means by which health risk is spread across a pool of payers. Yet, when certain serious illnesses like the ones mentioned above strike, patients are singled out or discriminated against for much higher out-of-pocket costs. This practice is appalling and negates the very reason they had been paying for insurance in the first place: to be protected from financial hardship should they become ill.
Specialty tiers are discriminatory because they apply a totally different benefit structure to certain medicines that patients with particular diseases need. By selectively applying high cost-sharing requirements to these drugs, while requiring lower, fixed copayment requirements for other drugs, plans that use specialty tiers force certain patients who suffer from certain diseases to pay much more.
The financial burden of paying for prescription drugs could be a strain for anyone, but it has a potentially devastating impact for those living with chronic conditions. The increased financial burden jeopardizes the financial solvency of entire families and jeopardizes the ability of some patients to take their necessary medications. No one should have to choose between taking life-sustaining medication and paying rent or providing food for their children.
I had a few more questions for Spatafora. I wondered if the new healthcare system would provide help with the high cost of these drugs:
1. Does Obama Care/Covered California address this issue?
Obama Care helps a little by creating annual limits on out-of-pocket costs but it does not go far enough. Existing California law (SB 639 of 2013), codifying and improving on provisions of the Affordable Care Act, imposes an annual out-of-pocket limit for covered essential benefits. The limit is $6,350 for an individual or $12,700 for a family for the 2014 plan year and is increased annually as health care costs rise. Many Californians would find it difficult to spend over $6,000 for a single prescription, let alone in one month. For many patients, the choice would literally be their money or their health. Asking someone who is living on $30,000 to spend $6,000 in one month for a single prescription is unrealistic. It is also important to note that patients must still pay their monthly premiums as well which are NOT included in the out-of-pocket limits. Thus it is not uncommon for a patient to pay anywhere from $400 to $1,000 per month for their insurance and then another $6,350 per year for their specialty medications.
2. Why not find a health plan that covers the medication in question at a cheaper cost? For instance an HMO.
Not realistic for chronically ill patients with certain conditions to do this. We are not talking about regular pills we are talking about specialty medications that require special handling – oftentimes medications that need to be injected or infused. The cost to the patient will be high regardless of the plan a patient selects.
3. What would you like to see happen to take care of this problem?
We want the discrimination to end by having the Legislature and Governor approve a reasonable monthly cap for all specialty medications. A Prime Therapeutics study released on April 2, 2014 found that pharmacy plan members with specialty drug out-of-pocket costs less that $250 are more likely to start taking their medication than those with higher out-of-pocket expenses. As costs rise, the study found consumers are more likely to abandon taking their medication as prescribed leaving them at risk. Prime Therapeutics is not the only one with a report on the high cost of specialty medications. Just last week, the IMS Institute for Healthcare Informatics issued a report about prices soaring for specialty medications. Two of the largest drug benefit managers in the nation, CVS Caremark and Express Scripts, also released reports last week about the increasing impact of specialty medications on total drug spending. We would like to see the Legislature impose monthly out-of-pocket limits for patients. The Governor and Legislature have already made it a matter of public policy that $200 is an acceptable limit rather than $250 and up for specialty medications last year when AB 219 was passed and signed into law putting a $200 per month maximum in place for oral oncology specialty medications.
4. Is there anything else you would like to add?
Insurance is a means by which health risk is spread across a pool of payers. Yet when a serious illness strikes patients are often are singled out for much higher co-pays and other out-of-pocket costs. This practice is appalling and negates the very reason they had been paying for insurance in the first place — to be protected from financial hardship should they become ill.
I contacted Covered California and asked if they had information about the cost of tier IV medications and if there was financial assistance to help with the high costs. The person I spoke with didn’t know and suggested I contact the insurance companies directly to see if such programs are available.
I did find a pdf that lists (I’m guessing) all the drugs that one could possibly ask for, including those in tier IV. There is no mention how much the patient must pay or how much the drug costs though. http://www.connecticare.com/globalfiles/pharmacycentral/4TierSpecialtyDrugList.
I also found an Anthem Prescription Drug List pdf https://www.anthem.com/ca/health-insurance/nsecurepdf/pharmacy_ABC_CATiered. It lists the prescription drugs that it covers, but it doesn’t give information about how much of the cost is actually covered. I guess that depends what type of insurance the consumer bought. I did not see a tier IV list either. Their list only goes up to tier III.
I spoke with an insurance broker who helped people sign up with Covered California and she suggested that consumers need to do their homework before buying insurance. There are so many plans with different deductibles, co-pays, and health networks, and not all prescription drugs are covered by all insurance companies. She seemed to have a hard time understanding what all the options were herself.
I worked on this post for a week and I admit I was very confused by the time I wrote this. And it was impossible to get a live person from an insurance company to talk to without giving out a lot of personal information online to start the process. I just wanted to ask one question and I was not able to do that! So what happens to someone who buys insurance today and then a couple years later must take a tier IV drug for a chronic condition? The average deductible seems to be $6,000 and I know from personal experience that I had to pay upfront before I could get a prescription filled or see a doctor. If someone doesn’t have the spare cash or credit card what will they do?
There has to be a simpler way to get healthcare.