Sovaldi, a hepatitis C treatment costing $84,000, highlights the ongoing debate over access to high-priced treatments. (AP Photo/Courtesy of Gilead Sciences, File)

The biggest battle in health care these days — besides the ongoing fight over Obamacare — is over the price of expensive life-saving medications.

Specialty drug spending fueled a 13 percent increase in prescription drug spending last year, the largest annual increase in the past decade, according to a report this week from pharmacy benefits manager Express Scripts. These drugs represent just 1 percent of all U.S. prescriptions, yet they made up nearly 32 percent of all drug spending in 2014, up from 28 percent in 2013.

Specialty drugs treat complex conditions from hepatitis C to cancer, multiple sclerosis and HIV, with monthly treatments sometimes costing tens of thousands of dollars. Even with insurance, patients sometimes dish out thousands of dollars each year.

These trends are only set to accelerate with millions more Americans getting health insurance through the Affordable Care Act. And there's a growing debate over who's to blame for the costs.

Insurers complain that drugmakers' prices go virtually unchecked in the United States. Drugmakers complain that insurers are selling plans that increasingly making it harder for patients to access and afford their drugs. And in the middle are patients, whose lives could depend on these advances in medicine.

Expanding drug tiers

The fight centers on how drug benefits are designed in health plans, particularly the use of benefit tiers. Health plans usually put lower-cost and preferred drugs at lower tiers that come with smaller out-of-pocket costs. But in the last few years, tiers have become more complex.

The tiers have grown from two to three, four and five. Plans now often distinguish between preferred generics and non-preferred generics, as well as preferred and non-preferred brand name drugs. Specialty medications, which according to one estimate cost 50 times more than a traditional brand-name drug, are found in the highest tiers. Patients usually pay a percentage of the cost of these expensive drugs, or co-insurance, in contrast to the set co-pays charged for medicines in lower tiers.

Specialty drug tiers are sweeping the insurance world. As of 2014, virtually all seniors in Medicare's prescription drug program or Medicare Advantage were enrolled in plans that had a specialty tier for drugs that cost the insurers at least $600 per month, according to a Kaiser Family Foundation study.

The KFF study shows more seniors with private Medicare coverage are enrolled in plans that have specialty drug tiers charging the maximum coinsurance rate allowed by law, which is 33 percent. Last year, nearly half of enrollees in Medicare's prescription drug program were in plans with with that maximum coinsurance, up from 13 percent of enrollees in 2006. About 80 percent of enrollees in Medicare Advantage, an alternative to the traditional program, are also enrolled in plans charging the maximum coinsurance in specialty tiers. That's about triple the 2006 rates, as the following chart shows.Specialty tiers over the past decade have also become more prevalent in employer health insurance, which covers about half of all Americans. A decade ago, just three percent of Americans with employer-sponsored insurance had plans with at least four tiers of pharmacy benefits, according to an annual KFF/HRET survey of workplace coverage. By 2013, that rate had grown to 23 percent, the survey found.

New health plans sold through Affordable Care Act exchanges may also be relying on higher tiers for drugs treating complex conditions. The Avalere Health consulting firm last month compared drug plans for coverage sold through California's exchange against select employer plans. As the next chart shows, Avalere found that the exchange plans were much more likely to place HIV and mental health medications on the highest drug tiers, making them likely more expensive for patients.

The exchange plans are also more likely to make patients go through administrative hurdles to obtain drugs treating conditions, including HIV, cancer, diabetes, asthma and COPD, according to the Avalere analysis. Hurdles include getting prior authorization to receive a drug or providing proof that another drug had already failed to treat their condition.

Insurers point out that patients have financial protections that shield them from exorbitant out-of-pocket costs. And they're quick to fault drugmakers for rising costs. Unlike other industrialized nations, the U.S. government doesn't negotiate price with pharmaceutical companies. That leaves it to insurers, pharmacy benefit managers and the states to cut deals with manufacturers.

Pharma counters that drugs account for just 1 in 10 U.S. dollars spent on health care, a rate that's projected to remain flat over the next decade. Further, they argue the new specialty medications represent major improvements over existing therapies, saving the system money in the long run.

What the patient pays

What the patient actually pays for these drugs will vary. People buying their own coverage through an Obamacare exchange can choose from a plan that covers anywhere between 60 percent of the cost of medical care (bronze) and 90 percent (platinum). The tradeoff is that the more comprehensive plans, while offering smaller out-of-pocket costs, charge higher monthly premiums. People purchasing mid-level health plans through the exchanges can also qualify for financial assistance lowering out-of-pocket expenses if they earn under 250 percent of the federal poverty level, or $29,425 for an individual.

Patients do have some financial protection from drug costs. Obamacare eliminates annual and lifetime caps on benefits, and it limits how much plans can require patients to spend out of pocket each year. In 2015, those limits are $6,600 individuals and $13,200 for a family plan  — which could still be hard to afford.

A handful of states have in the past few years passed laws or proposed legislation further limiting how much patients pay out of pocket for specialty medications. Louisiana and Maryland, for example, last year enacted laws preventing patients from spending more than $150 per month on a single specialty drug. Louisiana's law also requires that insurers using specialty drug tiers allow their patients to appeal for an exception.

But insurers argue that such measures would mean higher premiums for everyone else.

The Obama administration last month said it's "deeply concerned" with the rapidly growing prices for drugs. And it says it's going to be more vigilant that health plans aren't placing most drugs treating complex conditions as the highest-cost tiers.

Unless something changes, though, patients may continue to find that the drugs they need the most are only going to get more expensive.