A D VERS E E F F E C TS
Healthcare & HIV Advocates Accuse Insurers of Discriminatory Pricing by Larry Buhl
HIV/AIDS
healthcare and consumer advocates are praising recent promises by some health insurers to lower the out-of-pocket costs for HIV medications, but they’re not breaking out the champagne just yet. In March, Coventry Health Plan announced that it would dramatically reduce out-of-pocket costs for HIV medications in individual plans purchased on Health Insurance Marketplaces established under the Affordable Care Act (ACA). The change, starting June 1, will drop out-of-pocket costs for HIV medications from almost $1,500 a month to $5–$100 per prescription. Coventry’s price reduction was in response to pressure from requests from HIV/AIDS patient advocates, including AIDS Foundation of Chicago (AFC) and AIDS Legal Council of Chicago (ALCC). In December 2014, AFC released an analysis of plans offered by Coventry and other companies on the Illinois Health Insurance Marketplace. The analysis showed Coventry and two other plans placed all commonly-used HIV medications on specialty tiers, an industry practice known as adverse tiering, which in effect makes medication unaffordable for people living with HIV. AFC and ALCC also said that adverse tiering may deter people living with HIV from enrolling, which is, in effect, discriminatory. Aetna, Coventry’s parent company, quickly followed suit, announcing that effective June 1, its oral HIV medications would be re-classified and placed on either generic or non-preferred brand tiers, and patient cost-sharing for the products would be fixed dollar copayments of between $5 and $100 after deductibles are met. New HIV drugs will be placed on their respective tier as they come onto the market. When asked whether Aetna would also lower prices and co-pays on top tier medications for other chronic illnesses, a spokesman
40
from Aetna told A&U that the company routinely evaluated plans and formularies “to ensure they align with the current standards of care and deliver the best value to our customers.” As far as HIV meds go, Coventry and Aetna are doing the right thing, says John Peller, CEO of AIDS Foundation of Chicago. But he adds that other companies have not yet followed suit, and that insurance companies might keep using loopholes in the ACA to implement policies like adverse tiering until
the federal government puts some consistent national policies on specialty medications. “Five years after the ACA passed, the federal government still had not released the definition of discrimination,” Peller tells A&U. “Section 1557 of ACA says plans can’t discriminate on basis of race and health and disability but they have not defined what discrimination looks like in a health plan. We think we are seeing a clear case of discrimination [through adverse tiering].” Consumer advocates say people who live in states with many choices of insurance companies are lucky, but those living in states and areas with few options may have to pay exorbitant rates for meds. Deterring the costliest patients Healthcare advocates say insurance companies can get away with discriminatory drug pricing, for now, due to
vague wording in the Affordable Care Act, or Obamacare. Before the ACA went into effect in 2014, many people with HIV who needed individual coverage couldn’t get a plan at any price. Luckier ones were accepted to plans with onerous premiums. Now, insurers have to take anyone who can pay, and in states where there’s robust competition and subsidies from Medicaid expansion premiums are often significantly lower than privately purchased plans before 2014. But there is no specific provision in Obamacare that prohibits insurers from charging whatever they want for medications. And that’s where, advocates say, insurers will keep finding ways to gouge their customers and deter the costliest— in other words the least desirable—customers from signing up. A study released in March in the New England Journal of Medicine concluded that some insurance companies are setting the price of HIV meds high to make their plans less welcoming to patients with chronic conditions, including HIV/AIDS. The study’s researchers at the Harvard T.H. Chan School of Public Health, used healthcare.gov marketplace to analyze forty-eight health insurance policies across twelve states. Combing through the fine print they found that, in 2014, twelve out of forty-eight policies covered nucleoside reverse-transcriptase inhibitors and generic versions in tiers with at least a thirty-percent co-pay. Some policies did not cover HIV/AIDS drugs at all. Their calculations showed that the average annual cost for a customer per HIV in the twelve plans was more than triple what customers in the other plans paid, $4,892 compared with $1,615. The researchers also found that premiums in plans with the highest out-of-pocket costs for HIV drugs were lower than other plans, but they estimated that anyone on HIV meds would still pay an average of $3,000 more each year. A&U • MAY 2015