A recent commentary (Jacobs DB, Sommers BD, NEJM 2015; 372; 399-402) highlighted a growing problem. Many insurers are using drug benefit plans to dissuade sicker people from enrolling in their plans.
Prior to the Affordable Care Act (ACA), insurers charged high premiums to people with chronic conditions. The ACA attempted to address this problem; in fact, the “individual mandate” was necessary to make sure that insurance companies had enough healthy people in their insurance pool to make it financially feasible.
Yet, insurance companies make more money if they can limit insuring sicker, chronically-ill people. One way this is happening is through “Adverse Tiering” which substantially increases out-of-pocket expenses for individuals with HIV, cancer, diabetes, mental illness, and arthritis. The difference in out-of-pocket costs, for example, with for each HIV drug was more than $3000 (on average) between adverse-tiered plans and those that were not adverse-tiered. Even for generic drugs, the cost was nearly a $2000 difference.
A few problems with this approach:
- Insurer’s drug prices are not usually available to public when choosing a plan; thus, these higher out-of-pocket costs are often unanticipated. (*Price transparency could accelerate rather than hinder this process.)
- If sicker patients flock to plans without “adverse tiering,” this could make these non-adverse-tiered plans lose money and result in similar design to avoid “adverse selection.”
Conclusion: “Preventing [this adverse tiering and] 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.”
Here’s the NY Times Report on this study: Study Finds HIV Drugs Priced Out of Reach
Related blog post:
gutsandgrowth 