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Castellani: Health Law’s Cost-Sharing Could Limit Patient Access To Prescription Drugs

By Mary Agnes Carey

May 7th, 2014, 2:36 PM

Enrollees in some of the health law’s most popular plans will face high cost-sharing requirements that the pharmaceutical industry says could keep patients from getting the drugs they need.

John Castellani

Most silver plans in the online marketplaces, or exchanges, require patients to pay for prescription drugs as part of the plan’s deductible, while nearly all bronze plans do, according to a report from Breakaway Health prepared for the Pharmaceutical Research and Manufacturers of America (PhRMA), the drug industry’s trade group.

Silver plans that combine prescription and medical costs into one deductible — the out-of-pocket costs patients pay before coverage begins –  have average deductibles of $2,275, and similar bronze plans have an average of $4,986, according to the report. The average amount for plans that have separate prescription drug deductibles is $470 for a silver plan and $956 for a bronze one.

For a typical employer-sponsored health plan, on average people pay about 22 percent of the cost of prescription drugs and their insurance covers the rest, said John Castellani, who heads PhRMA. According to the analysis done for association, the health law’s bronze and silver plans require more than twice that amount. (Platinum and gold plans on the exchange generally have lower cost-sharing requirements but charge higher premiums.)

Of course, this isn’t the first time concerns have been raised about the affordability of coverage offered by the health law’s exchanges. Analysts and consumer groups, among others, have expressed fears that “sticker shock” on premium prices in some areas might discourage people from enrolling in coverage or, once enrolled, high cost sharing requirements for deductibles and co-pays could discourage people from accessing care when they need it.

But Aaron Albright, a spokesman for the Centers for Medicare and Medicaid Services, offered a different take. He said in a statement that, before the health law, “plans did not have to cover drugs, and consumers could face unlimited out-of-pocket expenses for plans with limited benefits and high deductibles, if they could even get coverage without being denied for a pre-existing condition.” With the health law now in place, “prescription drugs are covered, out-of-pocket expenses are capped and there are no denials based on health, among other consumer protections.”

In an interview, Castellani said that higher cost-sharing requirements for the law’s silver and bronze plans are “a concern for us from the patient standpoint, obviously, because you’re disincentivizing patients, particularly patients with chronic diseases, to continue to manage their chronic disease in exchange for what was a political imperative, which was a low premium, as low as possible,” he said. “Yet their out-of-pocket expenses are potentially so high that we have to be concerned about whether or not people will be able to afford to continue to get their medicines.”

The average cost-sharing “tiers” for prescriptions on the bronze and silver plans are also higher than employer-sponsored plans, according to the report. For example, average co-pays for employer sponsored insurance for specialty drugs are $80, compared with $159 for silver plans and $157 for bronze, it notes.

Some of those costs may be mitigated by the law’s cost-sharing subsidies for silver plan enrollees whose incomes are up to 250 percent of poverty (about $28,725 for an individual, higher for families), with the assistance greatest for those at the lower end of the income scale. Those subsidies reduce the deductibles and other out-of-pocket costs people are required to pay. Insurers have some flexibility on how that cost-sharing is reduced but the plans must meet specific actuarial values. The cost-sharing subsidies do not apply to other plans sold on the exchanges.

Insurers can exclude some medications, like generics, which account for 86 percent of all drugs dispensed, from a deductible but still require other cost sharing. The more expensive the drug, however, the more the consumer usually pays out of pocket.

Castellani said PhRMA has brought its concerns to the health insurance industry, to the Department of Health and Human Services and to patient groups, among others.

Clare Krusing, a spokeswoman for America’s Health Insurance Plans, a trade group representing insurers, said the problem is that drug prices are too high.

“Research shows that drug prices continue to soar and are one of the leading drivers of health care cost increases. Any discussion of prescription drug coverage must also include a focus on the direct link between rising prescription drug prices and consumer cost-sharing,” she said in a statement. “Rising prices for prescription drugs put a financial burden on patients by forcing them to pay for these cost increases through higher premiums or increased out-of-pocket costs.”

8 Responses to “Castellani: Health Law’s Cost-Sharing Could Limit Patient Access To Prescription Drugs”

  1. Jerry says:

    Maybe it’s time to rely more on tried and true generic medicines. Generics are way less expensive. Seems like lately, for every ten new medicines that reach the market, nine of them turn out to be dangerous and wind up in the hands of product liability lawyers. Besides, with the uninsured not having any access to medicines during an entire lifetime, having access to inexpensive generic medicines is a blessing. How is it that limiting patient access to brand name RX drugs worse than being uninsured and not having access to any medicines whatsoever? Huh?

  2. Dawn says:

    This is another example of the serious limitations to plans offered on the exchanges, which simply do not measure up to what was traditionally regarded as “good” insurance or to the plans typically offered by employers.
    While the article cites average prescription drug deductibles of about $470 for a silver plan, silver plans I reviewed on the Georgia exchange had prescription drug deductibles of $1,500 coupled with medical deductibles of over $4,000. This requires a steep outlay in terms of premiums and out-of-pocket costs before insurance even begins to kick in.

  3. matt says:

    “This is another example of the serious limitations to plans offered on the exchanges, which simply do not measure up to what was traditionally regarded as “good” insurance or to the plans typically offered by employers.”

    Employers offering “good” insurance? Not for long sweetie! If you have been blessed in the past to have worked for a decent employer that offers healthcare benefits, get ready for a change. The party is about to come to an end. As long as Congress stays in gridlock and refuses to address the skyrocketing cost of healthcare, even the best employers will be dropping coverage for their employees. Oh, by the way, it has absolutely nothing to do with the Affordable Care Act and everything to do with increasing profits of an overly greedy healthcare industry. Americans pay twice as much for their healthcare as any other industrialized nation on earth thanks to a do nothing Congress and the outrageous greed within the industry. Got it?

  4. Prescription drugs are an integral part of any health care plan. Generics are a wonderful alternative for those medications that are available as generics.

    Between heart, asthma and diabetes medications alone, used by many people, the availability of acceptable low-cost generics is very limited. Many of the medications used for these chronic conditions are more than $200 per month but without their continued use, the results are high medical expenses.

    Plus the added benefit to the economy is a productive person responsible for themselves and their families – which is a wonderful added benefit!

  5. Jerry says:

    Wait until the Employer mandate starts…. Millions will be kicked off their plans… plans they liked and wanted to keep.

  6. Killroy71 says:

    Don’t be ridiculous – people with chronic disease bought gold or platinum plans. They know darned well what their disease costs, and the higher premium is worth the better coverage. Anybody who shells out a lot of meds on a regular basis will quickly learn the same lesson – higher premium is more than offset by lower out of pocket for meds.

    About 70% of exchange plans were silver; few were bronze. PhrMa is really shedding those crocodile tears for itself.

  7. JimF says:

    Prescription drug coverage varies significantly from plan to plan – the specialty tier is what hurts patients the most and that’s only briefly mentioned above. Specialty drugs don’t have generic counterparts and have cost-sharing up to 90% in plans. That’s completely unreasonable and for people with a chronic condition like MS, there is no alternative. Because of the significant variability between plans, a bronze plan with a low premium might be the better choice while in other cases a gold plan might be best (there are no platinum plans sold in my home state of Washington). The solution – a cost calculator so people can actually make informed decisions about their health care.

  8. Randy says:

    America continues to hold the record in healthcare spending. No other nation on earth spends 18 percent of GDP on healthcare. Americans are stooges. Americans will continue to be stooges until we do like every other industrialized nation on earth. Eliminate private insurance and move as quickly as possible to a single-payer government run public healthcare system. Every other industrialized nation on earth made that move decades ago. They were smart. America continues to be stupid.