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Affordable Care Act: HIV "Discrimination"/Coinsurance/High-Tiered ARTs-new study - "ATP enrollees had an average annual cost per drug of more than triple that of enrollees in non-ATPs ($4,892 vs. $1,615)"
 
 
  Download the PDF here
 
Download the PDF here
 
Bloomberg (see below): AIDS Patients Face Price Discrimination in Some Obamacare Plans
 
from NEJM article-
 
drugs for HIV & other conditions being "adverse tiered" with high coinsurance:
 
"Adverse tiering.....puts substantial and potentially unexpected financial strain on people with chronic conditions. These enrollees may select an ATP for its lower premium, only to end up paying extremely high out-of-pocket drug costs. These costs may be difficult to anticipate, since calculating them would require knowing an insurer's negotiated drug prices - information that is not publicly available for most plans."
 
"Our findings suggest that many insurers may be using benefit design to dissuade sicker people from choosing their plans.....We found evidence of adverse tiering in 12 of the 48 plans - 7 of the 24 plans in the states with insurers listed in the HHS complaint and 5 of the 24 plans in the other six states (see the Supplementary Appendix for sample formularies). The differences in out-of-pocket HIV drug costs between adverse-tiering plans (ATPs) and other plans were stark (see graph). ATP enrollees had an average annual cost per drug of more than triple that of enrollees in non-ATPs ($4,892 vs. $1,615), with a nearly $2,000 difference even for generic drugs. Fifty percent of ATPs had a drug-specific deductible, as compared with only 19% of other plans. Even after factoring in the lower premiums in ATPs and the ACA's cap on out-of-pocket spending, we estimate that a person with HIV would pay more than $3,000 for treatment annually in an ATP than in another plan......Our findings suggest that many insurers may be using benefit design to dissuade sicker people from choosing their plans. A recent analysis of insurance coverage for several other high-cost chronic conditions such as mental illness, cancer, diabetes, and rheumatoid arthritis showed similar evidence of adverse tiering, with 52% of marketplace plans requiring at least 30% coinsurance for all covered drugs in at least one class.3 Thus, this phenomenon is apparently not limited to just a few plans or conditions."
 
See Graph Below:
 
Average HIV-Related Costs for Adverse-Tiering Plans (ATPs) versus Other Plans. The "total annual average cost of HIV regimen" is the sum of the annual premium and the average annual out-of-pocket cost of HIV regimens. The HIV treatment regimen that was used for this calculation was emtricitabine, tenofovir, and efavirenz, a commonly prescribed single-pill regimen. Out-of-pocket spending was capped at each plan's out-of-pocket maximum under the Affordable Care Act, typically $6,350.
 
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Perspective
 
Using Drugs to Discriminate - Adverse Selection in the Insurance Marketplace

 
"Stopping adverse drug tiering will not completely eliminate discrimination in the insurance marketplace. Some insurers will invariably think of new ways to dissuade sick enrollees from joining their plans."
 
Douglas B. Jacobs, Sc.B., and Benjamin D. Sommers, M.D., Ph.D.
From the Department of Health Policy and Management, Harvard School of Public Health, Boston
 
N Engl J Med Jan 29 2015
 
Eliminating discrimination on the basis of preexisting conditions is one of the central features of the Affordable Care Act (ACA). Before the legislation was passed, insurers in the nongroup market regularly charged high premiums to people with chronic conditions or denied them coverage entirely. To address these problems, the ACA instituted age-adjusted community rating for premiums and mandated that plans insure all comers. In combination with premium subsidies and the Medicaid expansion, these policies have resulted in insurance coverage for an estimated 10 million previously uninsured people in 2014.1
 
There is evidence, however, that insurers are resorting to other tactics to dissuade high-cost patients from enrolling. A formal complaint submitted to the Department of Health and Human Services (HHS) in May 2014 contended that Florida insurers offering plans through the new federal marketplace (exchange) had structured their drug formularies to discourage people with human immunodeficiency virus (HIV) infection from selecting their plans. These insurers categorized all HIV drugs, including generics, in the tier with the highest cost sharing.2
 
Insurers have historically used tiered formularies to encourage enrollees to select generic or preferred brand-name drugs instead of higher-cost alternatives. But if plans place all HIV drugs in the highest cost-sharing tier, enrollees with HIV will incur high costs regardless of which drugs they take. This effect suggests that the goal of this approach - which we call "adverse tiering" - is not to influence enrollees' drug utilization but rather to deter certain people from enrolling in the first place.
 
To explore the implications of this practice, we analyzed adverse tiering in 12 states using the federal marketplace: 6 states with insurers mentioned in the HHS complaint (Delaware, Florida, Louisiana, Michigan, South Carolina, and Utah) and the 6 most populous states without any of those insurers (Illinois, New Jersey, Ohio, Pennsylvania, Texas, and Virginia; for details, see the Supplementary Appendix, available with the full text of this article at NEJM.org). We examined the plans with the lowest, second-lowest, median, and highest premiums on the "silver" level in each state, analyzing formularies and benefit summaries to assess cost sharing for nucleoside reverse-transcriptase inhibitors (NRTIs), one of the most commonly prescribed classes of HIV medications. We chose this example because HIV is associated with high insurance costs, requires lifelong treatment, and is treated with an expensive and disease-specific class of medications. We defined adverse tiering as placement of all NRTIs in tiers with a coinsurance or copayment level of at least 30%. In estimating enrollees' average annual medication costs, we used the negotiated drug price paid by Humana, which makes its prices available online.

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We found evidence of adverse tiering in 12 of the 48 plans - 7 of the 24 plans in the states with insurers listed in the HHS complaint and 5 of the 24 plans in the other six states (see the Supplementary Appendix for sample formularies). The differences in out-of-pocket HIV drug costs between adverse-tiering plans (ATPs) and other plans were stark (see graph). ATP enrollees had an average annual cost per drug of more than triple that of enrollees in non-ATPs ($4,892 vs. $1,615), with a nearly $2,000 difference even for generic drugs. Fifty percent of ATPs had a drug-specific deductible, as compared with only 19% of other plans. Even after factoring in the lower premiums in ATPs and the ACA's cap on out-of-pocket spending, we estimate that a person with HIV would pay more than $3,000 for treatment annually in an ATP than in another plan.
 
Average HIV-Related Costs for Adverse-Tiering Plans (ATPs) versus Other Plans.
 
I bars represent 95% confidence intervals, and P values represent results of t-tests for significant differences between ATPs and other plans for each outcome. The "total annual average cost of HIV regimen" is the sum of the annual premium and the average annual out-of-pocket cost of HIV regimens. The HIV treatment regimen that was used for this calculation was emtricitabine, tenofovir, and efavirenz, a commonly prescribed single-pill regimen. Out-of-pocket spending was capped at each plan's out-of-pocket maximum under the Affordable Care Act, typically $6,350.
 

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Our findings suggest that many insurers may be using benefit design to dissuade sicker people from choosing their plans. A recent analysis of insurance coverage for several other high-cost chronic conditions such as mental illness, cancer, diabetes, and rheumatoid arthritis showed similar evidence of adverse tiering, with 52% of marketplace plans requiring at least 30% coinsurance for all covered drugs in at least one class.3 Thus, this phenomenon is apparently not limited to just a few plans or conditions.
 
Adverse tiering is problematic for two reasons. First, it puts substantial and potentially unexpected financial strain on people with chronic conditions. These enrollees may select an ATP for its lower premium, only to end up paying extremely high out-of-pocket drug costs. These costs may be difficult to anticipate, since calculating them would require knowing an insurer's negotiated drug prices - information that is not publicly available for most plans.
 
Second, these tiering practices will most likely lead to adverse selection over time, with sicker people clustering in plans that don't use adverse tiering for their medical conditions. After enrollees with chronic conditions realize they're incurring higher-than-expected costs in an ATP, some will switch to different plans during the next enrollment period. Over time, thanks to word-of-mouth or clinicians' advice, plans offering generous prescription-drug benefits may see a large influx of sick enrollees, which would reduce their profits and could lead to a race to the bottom in drug-plan design. Although the ACA's risk-adjustment, reinsurance, and risk-corridor programs provide some financial protection to insurers whose enrollees are sicker than average, the existence of adverse tiering in 2014 suggests that selection opportunities remain. Furthermore, the reinsurance and risk-corridor programs will be phased out after 2016, which will only increase insurers' incentives to avoid sick enrollees.
 
Several policies could reduce the harms associated with adverse tiering. One approach to addressing unexpectedly high out-of-pocket costs for people with chronic conditions is price transparency. Insurers could be required to list on their formulary each drug's "estimated price to enrollee," based on the negotiated price and the copayment or coinsurance. However, if adopted in isolation, price transparency would probably accelerate the adverse-selection process.
 
Additional policies are needed to combat selection and end adverse tiering altogether. One potential approach with a policy precedent would be establishing protected conditions in drug formularies. Medicare Part D has designated several "protected classes" of drugs, including those used for HIV, seizures, and cancer, in order to maintain patients' access to them. A similar approach in the marketplaces could set an upper limit on cost sharing for medications for protected conditions. Such a policy would reduce financial exposure for people with these conditions, even if they chose suboptimal plans - which, to judge from studies of consumers' plan selection, is likely to remain a common occurrence.4 Other safeguards for protected conditions, such as limits on prior-authorization requirements, could also be implemented.
 
An important additional step would be to require marketplace plans to offer drug benefits that meet a given actuarial value - meaning that the percentage of drug costs paid by the plan (rather than the consumer) would have to exceed a particular threshold. This level could be set at the overall actuarial value for a given plan (i.e., 70% for silver plans) or above it. Under this approach, in order to significantly increase cost sharing for one drug, an insurer would have to reduce cost sharing for another drug. This step is crucial because it encompasses treatment of all health conditions - not just protected conditions - and addresses non-formulary-based methods of passing costs on to consumers (e.g., drug-specific deductibles) that may induce adverse selection.
 
Stopping adverse drug tiering will not completely eliminate discrimination in the insurance marketplace. Some insurers will invariably think of new ways to dissuade sick enrollees from joining their plans. Eliminating premium discrimination on the basis of health status was one of the ACA's chief accomplishments in the nongroup insurance market and one of the law's most popular features.5 Preventing other forms of financial discrimination on the basis of health status - with the attendant risks of adverse selection in the marketplace - will require ongoing oversight. The ACA has already made major inroads in designing a more equitable health care system for people with chronic conditions, but the struggle is far from over.
 
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http://www.bloomberg.com/news/articles/2015-01-28/aids-patients-face-price-discrimination-in-some-obamacare-plans
 
AIDS Patients Face Price Discrimination in Some Obamacare Plans (Bloomberg) -- A quarter of plans under the Patient Protection and Affordable Care Act effectively discriminated against AIDS patients in 2014 by requiring high out-of-pocket payments for all HIV drugs in a key class, Harvard University researchers found.
 
Their small study, published in the New England Journal of Medicine, examined AIDS drug costs in 48 plans under Obamacare in 12 states, including Florida, Michigan, New Jersey and Pennsylvania. Twelve of the plans from seven different insurers forced AIDS patients to pay 30 percent or more of the cost of all drugs in the class, a practice that may deter patients with HIV from enrolling in those plans.
 
The study may also have implications for people suffering from other diseases that require treatments with expensive drugs.
 
"Our findings suggest that many insurers may be using benefit design to dissuade sicker people from choosing their plans," authors Douglas Jacobs and Benjamin Sommers, both of the Harvard T.H. Chan School of Public Health, said in the study.
 
The analysis underscores a federal civil rights complaint made last May to the U.S. Department of Health and Human Services by the AIDS Institute and the National Health Law Program. It contended that four insurers in Florida, including Aetna Inc., were discriminating against AIDS patients in some of their Affordable Care Act plans by putting all HIV medicine in the highest drug payment tiers, which often require steep out-of-pocket payments based on a percentage of a drug's cost.
 
Florida Pattern
 
The findings show that the pattern seen in AIDS drugs in Florida has been occurring in many other states, including New Jersey, Michigan, Utah, South Carolina, Pennsylvania and Louisiana, Jacobs and Sommers said in an interview. The Harvard study examined mid-level "silver plans" in 2014 and didn't look into whether the limitations continued to occur in 2015.
 
"This reconfirms what we have been saying and seeing," said Carl Schmid, deputy executive director of the AIDS Institute, which is based in Tampa, Florida. "There is obviously discrimination out there."
 
Plan designs that left AIDS patients with no low out-of-pocket cost drug options were "fairly widespread," said Jacobs, a public health student at Harvard and the study's lead author. "It seems to be a very significant problem."
 
Potential Solutions
 
In November, the Department of Health and Human Services issued proposed guidance for 2016 that would make it harder for insurers to require high out-of-pocket costs for all drugs for a chronic condition. The rule would more clearly define that type of requirement as discrimination.
 
"If an issuer places most or all drugs that treat a specific condition on the highest cost tiers, we believe that such plan designs effectively discriminate against, or discourage enrollment by, individuals who have those chronic conditions," according to the proposed guidance.
 
The researchers suggested ways officials could go further. One solution is for the federal government to create certain protected drug classes for which there would be an upper limit on what insurers could require patients to pay, the Harvard researchers wrote in their article. It may also make sense for the government to require insurers to cover a certain minimum percentage of overall drug costs, they wrote. This would force insurers to lower out-of-pocket costs for some drugs if they raised them on others.
 
Still Waiting
 
Companies named in the Florida civil rights complaint last May included Aetna, Humana Inc. and Cigna Corp. Schmid said that while those insurers have reached agreements to lower AIDS drug costs for patients in Florida, the broader issue of what is allowed nationally under the ACA remains unresolved.
 
"We are still waiting" for the federal complaint to be resolved, said Schmid, who is based in Washington.
 
In a statement, Aetna, based in Hartford, Connecticut, said it has voluntarily updated its plans in order to ensure compliance with Florida law. The plans now puts all generic HIV drugs on the non-preferred generic tier, Aetna said.
 
Humana, based in Louisville, Kentucky, said as part of an agreement with Florida insurance officials, it moved all generic and brand drugs that cost under $600 a month off the specialty drug tier for its 2015 ACA plans in that state. Cigna, based in Bloomfield, Connecticut, said in November it voluntarily agreed to move all generic drugs that had been on the specialty tier in Florida exchange plans to a lower tier, and it also capped monthly costs for four brand name HIV drugs for the plans in that state.
 
The Harvard study found four additional insurers not named in the Florida civil rights complaint had plan designs that may discriminate against AIDS patients, Jacobs said. The study doesn't name the insurers.

 
 
 
 
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