Caroline F. Pearson and Deirdre B. Parsons, MPP, MPH, MS
Innovations in cancer treatment and health insurance markets present new opportunities for patients. Advances in medical treatment today give more patients reason to hope for a cure and reduce some of the devastating adverse effects long associated with cancer therapy. However, such treatments can often be costly to insurers and to patients.
The Affordable Care Act (ACA) significantly broadened insurance coverage by ensuring that all individuals, even those with pre-existing diagnoses, can purchase insurance. The law also caps maximum out-of-pocket (MOOP) spending for individuals at $6600, which offers important protection for cancer patients against high costs and possible medical bankruptcy. Meanwhile, insurers are responding to pressure from individuals and employers to reduce monthly premiums. Each of these advances in healthcare coverage will benefit cancer patients. However, they also have required changes to benefit designs that may impact patients.
In order to manage costs in the face of more expensive therapies and new coverage and benefit requirements, health plans have revised their insurance products to include narrower provider networks and increased cost sharing for some services and medications before consumers reach their MOOP spending. Exchange markets are leading the way in these innovations, although these benefit designs are likely to spill over into other sources of insurance—like the employer market.
This article reviews plan designs and network breadth for oncology patients who have exchange coverage. Successful exchange innovations that are popular with consumers and effective at reducing premiums are likely to spread into other markets, including employer coverage. As such, it is important to understand these exchange benefit designs and what they will mean for cancer patients.
THE AFFORDABLE CARE ACT
Along with the many changes it brought about in health insurance markets, the ACA also expanded access to patients who previously could not afford healthcare or who were denied access due to pre-existing conditions. Since 2010, health plans subject to ACA requirements have adjusted to operate under the new rules and regulations. The downstream effect of complying with the new regulations has been that plans have been more constrained in some ways—such as the amounts by which they can raise premiums and the scope of services they offer. However, that has given rise to innovation focused on network and benefit design.
The insurance exchanges created by the ACA also offer a new, centralized way for consumers to shop and compare health plans. Thus far, enrollees in these markets have been extremely price-sensitive—overwhelmingly choosing plans with lower premiums. Insurers that want to win enrollment have sought to keep premiums low by limiting provider networks and shifting more cost sharing onto enrollees, resulting in increased costs for some patients before they reach their MOOP limit. We have seen this dynamic unfold in several specialties, including oncology.
ONCOLOGY BENEFITS IN EXCHANGE MARKETS
Exchange markets are leading the way in developing benefit designs that seek to contain costs. Access to oncology care through exchange plans will vary depending on the plan level purchased and the specific design of each product. On average, individuals with exchange coverage face higher levels of cost sharing for services and for medications compared with traditional commercial or Medicare markets. In 2014, almost two-thirds of enrollees selected silver tier plans, which are designed to cover an average of 70% of consumers’ healthcare costs.1
Most exchange plans feature high deductibles that result in front-loaded costs in the benefit year. High deductibles have been shown to have the effect of reducing spending, even for very sick patients.2
In 2015, silver tier plans had an average deductible of $2658, which usually includes prescription drugs. Patients are responsible for 100% of applicable healthcare costs until the deductible is fulfilled.
Once the deductible is met, patients will be responsible for cost sharing for drugs and services they receive before reaching the MOOP limit. For oncologist visits, the average co-pay for a silver plan in 2015 was $52 if the physician was included in the plan’s network. However, if a patient seeks care from a non-network provider, he/she will be responsible for the full cost of the visit unless the exchange plan includes out-of-network coverage. Of the 40% of plans that offered out-of-network coverage for specialists in 2015, 49% was the average coinsurance for an out-of-network specialist for plans offered through Healthcare.gov.3
The diagnosis and monitoring of cancer may also require patients to share in the costs for those services, such as CT and MRI scans. In 2015, imaging services had an average cost share of $234 or 27% in-network.
Most patients who have cancer receiving active treatment will incur enough costs to reach their MOOP. Many plans sold in the higher gold and platinum tier feature reduced MOOP spending, which may reduce patients’ total costs despite having higher monthly premiums. In 2015, the average MOOP for platinum plans was $2145 compared with $6381 for bronze plans.4
COST SHARING FOR SERVICES AND DRUGS IN EXCHANGE MARKETS
Oncology patients may also find themselves with high levels of cost sharing for their drugs in addition to access to their providers. As insurers look for ways to contain healthcare costs, utilization management (UM) of and cost sharing for prescription drugs has increased, especially as competition within therapeutic classes—through new molecules being released to the market, existing products gaining approval for new indications, and patents of pharmaceuticals and biologics expiring—has heightened the ability for payers to more tightly manage prescription drugs.
Plans are aggressively managing access to drugs through UM. Not only are rates of UM higher in exchanges than in employer plans, but the use of UM has been increasing in the market. Rates of UM for oncology medicines rose from 34% of drugs in 2015 to 50% in 2016.5
After meeting any UM requirements, patients in exchanges may also face high cost sharing for oncology drugs. An Avalere analysis of drug coverage in exchange plans found that coverage of oncology products within exchanges closely mimics trends seen in Medicare Part D, while employer plans tend to list these drugs on formulary and preferred tiers more frequently.5
In exchanges, 42% of oncology products are placed on the specialty tier compared with only 4% in employer plans (FIGURE 1
Specialty tiers disproportionately use coinsurance, often requiring patients to pay a greater share of the cost of the drug than a flat dollar co-pay. As such, nearly half of oncology therapies are subject to coinsurance in exchange plans, averaging 37% of the cost of the drug.4
Although the majority of individuals enrolling through the exchanges opt for silver tier plans, individuals with serious conditions, such as cancer, should consider choosing plans with richer benefits to reduce their out-of-pocket (OOP) costs and spread their expenses more evenly throughout the year.
ONCOLOGY NETWORKS IN EXCHANGE MARKETS
In addition to benefit design, provider networks can have a significant impact on consumer costs and access. The ACA sets minimum standards for network adequacy in exchange plans but leaves significant discretion to those plans. Insurers have leveraged provider networks to reduce premiums by limiting participating providers to higher-value or lower-cost providers.
Because coverage for out-of-network providers is limited, cancer patients will benefit from ensuring their preferred physicians and hospitals are included in the network when choosing a plan. However, individuals given a recent diagnosis may find they have chosen plans with narrow provider networks and high cost sharing for out-of-network providers.
After evaluating how the oncology provider networks in exchange plans compare with networks in traditional commercial plans, an Avalere analysis of exchange plans found 42% fewer oncology providers in exchanges.4
This disparity in access to oncology providers within exchange networks also varies by region: for example, in Charlotte, North Carolina, and Jacksonville, Florida, exchange networks for oncology are 53% and 63%, respectively, the size of traditional networks in the same region.4
Individual plans within each region also vary by the breadth of their oncology networks (FIGURE 2
Furthermore, the results of a survey conducted in partnership between Avalere and the National Comprehensive Cancer Network of 20 National Cancer Institute–designated cancer centers revealed that some leading cancer centers have been excluded from exchange networks:
Five centers (in Florida, Missouri, New York, Texas, and Washington) were excluded from the networks of the exchange plans offered by the majority of the state’s exchange carriers.
Thirteen centers indicated they were excluded from some networks despite their attempt to be in network.
Six centers reported they opted out of exchange contracts due to low reimbursement rates.6
These data demonstrate that access to oncologists and hospitals may be much more limited for exchange enrollees than for those in other markets. As such, it is critical that patients carefully examine the details of the plan prior to purchasing coverage.
THE FUTURE OF ONCOLOGY CARE FOR EXCHANGE PATIENTS
Going forward, oncology patients may have more tools to choose coverage that meets their needs, but some gaps could remain. For the 2016 plan year, issuers of exchange plans will be required to provide increased transparency for consumers in at least 3 ways:
Plans will be required to publicly post a complete list of all covered drugs on an up-to-date formulary, including tiers and restrictions on drug access.
Issuers must publish machine-readable formularies, which can support a range of interactive consumer shopping tools. Links to formularies must be updated frequently so that consumers will be able to obtain accurate information on drug coverage.
Issuers must provide up-to-date and complete provider directories, which should be accessible to consumers even prior to enrolling in a plan.7
The growth of decision support tools and consumer education can also help combat the tendency for patients to pick plans based on the premium alone. Some states have developed their own consumer support tools. California, for example, has developed an OOP calculator and Idaho factors average “estimated expenses” associated with each plan. CMS has developed its own cost calculator, which include a provider and formulary search and estimates total OOP spending.
Beginning in 2016, the ACA will also require HHS to release an enrollee satisfaction survey to assess consumer experience with exchange plans.8
The information collected from the surveys will be publicly displayed to allow individuals to compare satisfaction across plans. The survey will include questions on access to specialists and cost sharing for medications.
As we enter 2016, patients with cancer who are enrolling in coverage through the exchanges need to recognize the unique characteristics of this market that may impact their access to services and the costs associated with treatment. Careful selection of a health plan can help consumers anticipate and minimize their OOP costs. EBO