Complex tiering system benefits health insurers

People are living longer, healthier lives than at any time in human history. Thanks in part to new medicines, technologies and other breakthroughs, researchers and health care providers are changing and saving lives, offering new hope for millions of people who suffer from chronic illness, like HIV/AIDS.

Unfortunately, while the medical and research fields continue to foster innovation, insurance companies are undermining access to these new treatments and procedures by sticking consumers with unreasonable and generally unexpected bills for these life-saving treatments. This practice of pocketing a patient’s premiums and then piling on additional co-pays and other surprise surcharges undermines the very purposes of spreading risk and offering and purchasing insurance in the first place.

While formulary tiering and benefit design have appropriate roles to play in our health care system, insurance companies are rightly under the microscope for using tiering to discriminate against people suffering from HIV/AIDS, cancer, mental illness and other conditions. In fact, the prestigious New England Journal of Medicine recently published a study on this topic and the “substantial and potentially unexpected financial strain [it puts] on people with chronic conditions.”

With the Affordable Care Act, more people are able to purchase insurance than ever before. But the choices consumers face can be confusing at best and unaffordable without transparent and accurate information from the insurance companies about the costs associated with medications on their formularies.

The ACA requires insurers to accept all enrollees, including those with preexisting medical conditions, and ending the illegal retroactive rescissions that had become common practice in the insurance industry. 

But the ACA’s promise of insuring people despite their preexisting conditions is illusory if consumers cannot affordably access the treatment they need.
Some insurers set ridiculously high co-payments for drugs for specific medical conditions. An analysis by the firm Avalere Health found that some plans offered by insurers through ACA-founded exchanges placed all medicines used to treat conditions such as HIV/AIDS, cancer and multiple sclerosis on the highest drug formulary cost sharing specialty tier.

The goal, as the New England Journal of Medicine study highlights, is to discourage patients with health problems from enrolling in the first place, effectively weeding out the “expensive patients” from their rolls.

In California, insurers last year fought against and successfully watered down a bill that would have required them to provide consumers with simple online information about such prescription drug coverage and formulary offerings.

Thankfully, lawmakers and patient advocates around the country are catching on to these practices and taking action. The AIDS Institute filed a federal civil-rights complaint against four insurance companies in Florida that put all HIV/AIDS drugs, including generics, into a category with the highest patient cost sharing. And the Obama administration has also announced it is reviewing plans offered by insurers under the ACA to uncover discriminatory practices.

But more needs to be done to stop these practices by insurance companies, and put patients back in control of their health care. We must ensure the decisions that are being made by doctors and healthcare providers are best for their patients, not for an insurance company’s bottom line.

Bill Hirsh is Executive Director of the AIDS Legal Referral Panel.

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