One of the greatest promises of the Affordable Care Act is that if you are sick or get sick, health insurers can no longer charge you more or avoid covering you altogether. They have to provide coverage to anyone who wants it, and they're not allowed to cherry pick healthier customers over sick customers.
But patient groups say they've spotted an alarming trend of some health insurance plans designing drug benefits to purposefully keep out sicker, costlier patients. It's currently the subject of a federal complaint, and a new study offers evidence this is happening across the country.
Here's how advocates say this works. Rather than reject coverage for sick patients altogether, some insurers are placing high-cost medications for chronic conditions into the highest-priced tiers of the drugs they cover, which would force patients to pay potentially thousands of more dollars out of pocket for essential medications.
In a discrimination complaint filed with the Department of Health and Human Services' civil rights division last year, two patient advocacy groups alleged that four Florida insurers selling plans on ACA exchanges were requiring HIV patients to pay up to 50 percent of the cost of HIV medications, even for generic versions, which should in theory be cheaper. They also asked federal regulators to investigate whether this practice was happening more broadly across the country.
A new analysis published in the New England Journal of Medicine suggests that is the case. Of 48 exchange health plans Harvard School of Public Health researchers analyzed, they identified 12 plans that appeared to discriminate against HIV patients. In those plans, they found patients had to bear at least 30 percent of the cost for all NRTIs (short for nucleoside reverse-transcriptase inhibitors), one of the most commonly prescribed classes of HIV drugs.
Their conclusion: a person with HIV enrolled in these plans would on average pay at least $3,000 more each year to treat the condition than if they were enrolled in another plan.
"Our findings suggest that many insurers may be using benefit design to dissuade sicker people from choosing their plans," wrote the study authors, Douglas Jacobs and Benjamin Sommers. And that could be the case for patients with other complex conditions, not just HIV.
The NEJM study "is a confirmation of what we saw in Florida and why we filed the complaint, and why we've been pushing HHS to take some action on discrimination," said Carl Schmid, deputy executive director of the AIDS Institute, which was one of the patient groups that filed the federal complaint. "Some plans — not all — are discriminating against people with HIV by putting all their drugs in the highest tier. It's not just a Florida situation, it's around the country."
In recent months, three of the four insurers named in the Florida complaint have reached settlements with state regulators to lower patient costs for HIV medications. The fourth insurer last week announced it would cap patients' monthly out-of-pocket costs to $200 for four drugs.
Health insurers point out that the ACA has built-in financial protections intended to shield patients, as well as themselves, from high costs. The law caps patients' annual out-of-pocket spending, though the limits are hardly cheap for low- and middle-income patients — in 2015, the maximum for individual and family plans are $6,600 and $13,200, respectively. The law also provides some exchange enrollees with cost-sharing subsidies, on top of the financial assistance they receive to pay monthly premiums.
"All individuals, regardless of health status, have access to coverage," said Clare Krusing, spokeswoman for America's Health Insurance Plans, the largest trade group representing health insurers. "This [NEJM] analysis ignores a critical component of the marketplace: consumer choice," she added, citing the wide range of health plans offered through the insurance marketplaces. The NEJM study analyzes just the mid-level "silver" health plans — the most popular option — in which insurers cover 70 percent of medical costs.
Health insurers also point out a mechanism within the ACA that's supposed to redistribute funds from health plans with healthier enrollees to those with sicker ones. The idea is that this prevents insurers from just seeking out healthier consumers.
The ACA is supposed to create an equal playing field for insurance. The law requires health plans to cover a certain set of benefits, though insurers have flexibility in how they design their plans. The plans are reviewed by state and federal regulators, though some patient advocates are pushing HHS to more rigorously enforce the law's standards.
"Plans are prohibited from discriminating against individuals with significant health needs in their benefit design," said Aaron Albright, spokesman for the federal Centers for Medicare and Medicaid Services. "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.”
The Obama administration recently said it would consider it a form of discrimination if a health plan put "most or all" drugs treating a specific condition at the highest levels of cost, a development that Schmid of the AIDS Institute said he was encouraged by. In a letter to health insurers last month, CMS said it might review exchange plans to determine whether insurers designed plans with high out-of-pocket costs for certain conditions, including bipolar disorder, diabetes, HIV, rheumatoid arthritis and schizophrenia.
"These are great statements, and we congratulate CMS for saying this," Schmid said. "But now you have to enforce it."