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Health insurance price-tiering of HIV drugs may deter high-cost patients
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Many insurers offering health plans under the Affordable Care Act appear to have structured their drug formularies to dissuade high-cost patients — including those with HIV— from enrolling in their plans, according to a recent perspective in the New England Journal of Medicine.
In May 2014, a formal complaint was made to the Department of Health and Human Services, alleging that some insurers offering plans through the federal marketplace had structured their drug formularies to dissuade HIV patients from choosing their plans. These insurers classified all HIV drugs, including generic drugs, in the highest cost-sharing tier.
“Insurers have historically used tiered formularies to encourage enrollees to select generic or preferred brand-name drugs instead of higher-cost alternatives,” Douglas B. Jacobs, ScB, from the Harvard School of Public Health, and Benjamin D. Sommers, MD, PhD, wrote. “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.”
Douglas B. Jacobs
To examine the prevalence of “adverse tiering” in which all HIV drugs, including generics, were categorized in the highest cost-sharing tiers, the researchers evaluated this trend in 12 states that use the federal marketplace. Six of them were the location of insurers named in the HHS complaint. The others were the six most populated states without any of the aforementioned insurers.
The researchers evaluated the plans, specifically evaluating cost sharing for nucleoside reverse-transcriptase inhibitors (NRTIs), commonly prescribed for HIV. Adverse tiering was defined as the classification of all NRTIs in tiers with a coinsurance or copayment level of at least 30%.
Benjamin D. Sommers
Twenty-five percent of the examined health plans showed evidence of adverse-tiering practices. Adverse tiering was seen in seven of the 24 plans in states with insurers named in the HHS complaint and in five of the 24 plans in the other states. Patients enrolled in adverse-tiering plans had an average annual cost per drug ($4,892) that was more than triple that of enrollees in nonadverse-tiering plans ($1,615), with a cost differential of about $2,000 for generic drugs. Half of the adverse-tiering plans had a drug-specific deductible vs. only 19% of other plans.
“Our findings suggest that many insurers may be using benefit design to dissuade sicker people from choosing their plans,” Jacobs and Sommers wrote.
The researchers found that even accounting for the lower premiums in adverse-tiering plans and the ACA’s limit on out-of-pocket spending, an HIV patient would have an estimated $3,000 higher annual treatment cost in an adverse-tiering plan vs. another plan.
“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 investigators wrote. “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.” — by Jen Byrne
Disclosure: Jacobs reports no relevant financial disclosures. Please see the full study for a list of Sommers’ relevant financial disclosures.
Perspective
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Joel Gallant, MD, MPH
Recent analyses by Harvard researchers on the drug benefit designs of some plans offering coverage through Marketplaces provides more evidence that insurers are employing new tactics to avoid providing health coverage to people with HIV infection. Of the 48 plans studied in 12 states, 25% had adverse tiering, defined as placing nucleoside analog reverse transcriptase inhibitors (NRTIs) — drugs that are used in virtually all antiretroviral regimens — on the highest cost sharing tier with a copayment of at least 30%. Individuals enrolled in a plan with adverse tiering faced medications bills more than $3,000 higher than other plans.
This study and others make it clear that we must end discrimination through drug benefit design. In addition to addressing specialty drug pricing, national standards are needed to limit cost sharing to a reasonable flat fee and to ensure that prior authorization is evidenced-based.
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