Chronically Ill Face High Out-of-Pocket Costs
March 3, 2014
Katie Sullivan
Those with chronic illnesses such as leukemia, hepatitis C, and multiple sclerosis may face a significant increase in their out-of-pocket expenses for specialty drugs. This is because payers are replacing fixed-dollar copayments with coinsurance rates that require patients to contribute a higher percentage of the cost for their specialty medications. In fact, one study of state health insurance exchange (HIE) plans found that some consumers might be responsible for up to half the cost of their specialty drugs. This could cost some patients more than $8000 a month.

“In the past, we've seen 10 or 20% coinsurance rates. Now we're seeing 30, 40, and 50%. So patients are being asked to bear more of the cost," said Brian Rosen, senior vice president for public policy at the Leukemia & Lymphoma Society. "Patients are going to spend their entire out-of-pocket cap before they ever see a dime from the insurance company."

While mandates in the Affordable Care Act prohibit insurers from denying coverage to those with pre-existing conditions, the law only caps out-of-pocket expenses for individuals at $6350, and families at $12,700. That means those consumers afflicted with chronic illnesses are most likely going to meet those caps within the first few months of receiving coverage. Furthermore, most state HIE plans require consumers to pay high monthly premiums in addition to coinsurance rates for specialty drugs.

The consulting firm Avalere Health, for example, found that 59% of mid-range silver plans and nearly 40% of top-quality platinum plans had coinsurance rates for specialty drugs. They also found that 60% of bronze plans had coinsurance rates greater than 30%.

"These cost-sharing levels are considerably higher than the cost-sharing that is typically seen in the commercial marketplace," said Daniel Mendelson, CEO, Avalere. "We're at this crux where we have to ask ourselves what we want insurance to cover, what we want insurance to be."

Myrl Weinberg, of the National Health Council (NHC), said that the NHC intends to address the concerns of the chronically ill in a newly developed website. The Putting Patients First website functions as a way to collect data regarding patients’ experiences in the new marketplace, which can then be used to help policy makers determine what is working and what needs to be changed in qualified health plans (QHPs) offered through the exchanges.

“A central function of the Putting Patients First website will be a cost calculator. People will be able to insert their age and state of residence, plus their expected annual use of healthcare—like visits for primary care, specialty care, mental healthcare, and emergency department care—potential hospitalizations and outpatient surgeries, and their use of prescriptions, both brand name and generic,” he said in a recent article in The American Journal of Pharmacy Benefits. “The resulting cost report will show estimated out-of-pocket medical and prescription costs and the premiums across different metal levels of the QHPs in the person’s state. While the Putting Patients First website will not direct people to specific health plans, the estimate of their total annual health costs will help guide patients to the right metal level to meet their needs."

Around the Web

Chronically Ill Facing High Drugs Costs Under U.S. Health Law [Reuters]