Insurance companies, perhaps more than previously thought, may be charging the sickest patients extra for drugs under the federal health law, in an effort to discourage them from choosing certain plans, according to a study released Wednesday.
One of the cornerstones of President Obama's signature health law forbids insurance companies from turning away people with pre-existing conditions such as diabetes or cancer. Yet hundreds of patient advocacy groups say insurance companies have found a way to discriminate against these people, who are more expensive to cover because they require life-long treatments.
The companies do this by putting all of their medications in a special category where the patient is required to pay a percentage of the cost of the drug, rather than a flat co-pay. Some are as high as 50 percent, leaving people on the hook for thousands of dollars. That compares to the average $10 to $40 per-medication co-pay that most pay.
A study published in the New England Journal of Medicine only examined HIV drugs, but noted the problem applies to mental illness, cancer, rheumatoid arthritis, diabetes and other chronic conditions. Patient advocates have complained that prescriptions for these patients were virtually unaffordable in some plans offered on HealthCare.gov.
The AIDS Institute even filed a formal complaint with U.S. Department of Health and Human Services officials last summer about four plans in Florida. Georgia plans to file a similar complaint, but the scope of the problem has been difficult to gauge as many of the complaints have been anecdotal.
The researchers studied 48 plans in 12 states using the federal marketplace: Delaware, Florida, Louisiana, Michigan, South Carolina, Utah, Illinois, New Jersey, Ohio, Pennsylvania, Texas, and Virginia.
They found that one-quarter of the plans placed all of the HIV drugs into the highest-cost category and required consumers to pay at least 30 percent of the drug costs instead of a flat co-pay. Annual drug costs in these plans were more than triple compared with other plans ($4,892 to $1,615), according to the analysis.
And 50 percent had to pay a separate deductible for drugs, compared to only 19 percent of consumers in other plans.
Insurers have historically placed drugs in categories with higher co-pays to encourage consumers to select generic or preferred brand-name drugs. The problem is exacerbated as more plans place all drugs, including generics, in the more expensive category.
"Our findings suggest that many insurers may be using benefit design to dissuade sicker people from choosing their plans," the study noted.
Over time, researchers predicted sicker people will enroll in plans that don't charge such high prices. That means certain plans could have a higher number of sicker, more expensive consumers than their competitors. The federal law has financial protections for those plans but some will be phased out in 2016.
The law does ban insurers from charging an individual more than $6,350 in out-of pocket costs a year and no more than $12,700 for a family policy.
Insurance companies say the main issue is increasing drug costs and they're shouldering the bulk of it. But they acknowledge the increased prices are also passed onto consumers.
For example, Atripla, the most popular HIV AIDS treatment and one of the highest-selling drugs in the U.S., costs insurers $27,026 a year. Patients only pay a portion of that, said Clare Krusing, a spokeswoman for the trade association America's Health Insurance Plans.
But insurers noted consumers have the flexibility to choose from plans at all levels with different cost-sharing requirements and that the health law has a component that rewards plans for value and efficiency "not on their ability to attract healthier enrollees," Krusing said.
Advocates have asked federal health officials to intervene and nearly 300 patient groups sent a letter last month urging Health and Human Services Secretary Sylvia Burwell to beef up enforcement. The federal government has warned against such discrimination.
"We analyze plan information submitted by insurance companies to uncover discriminatory benefit designs, and work with outlier plans to update formularies so they do not discourage enrollment of consumers with specific medical conditions," agency spokesman Aaron Albright said in an email.
It's unclear what the penalties are for insurance companies who discriminate.
Meanwhile, insurance officials in some states are stepping in. Three out of four insurance companies restructured their plans in Florida late last year.