ObamaCare Clusterfuck: Narrow formularies used to deny coverage for pre-existing conditions
Shocker! The logic of "narrow networks" applies with formularies just as it does with doctors:
The challenge for consumers is that most of the plans have “closed” formularies where non-formulary drugs aren’t covered. Moreover, the cap on out of pocket spending only applies to costs incurred on drugs included on a plan’s formulary. That means that patients could be saddled with the full cost [whoopsie!] of many of these drugs, with no limits on that spending.
So, already we're in a minefield where we don't really know what's covered, and could be on the hook for a really expensive treatment while thinking we're covered. Second, the plans are just as transparent about drugs as they are about doctors; that is, they're completely obfuscated:
Consumers who regularly take medication will need to examine their Obamacare plan options carefully. Even before considering cost-sharing rates, the consumer must confirm that their drugs are covered by the health plan. Uncovered drugs are not subject to any limitations on annual out-of-pocket costs. The Affordable Care Act requires only one drug per category and class be covered within a health plan formulary, though the benchmark plan chosen the consumer’s state can increase that number on a per category/class basis. Depending on the state, the minimum number of drugs to be covered by the prescription drug benefit varies from 485 medications to 1,070 medications. Additionally, a particular drug’s tier assignment to “preferred brand name drug,” “non-preferred brand name drug,” and “specialty drug” is left to the discretion of the health plan. Consequently, a drug that is classified as a “preferred brand name drug” in one plan may be a more expensive “non-preferred brand name drug” in a different plan. All of these factors suggest that consumers should do their homework prior to enrolling in a health plan.
So, again there's no signage in the minefield. This applies to cancer patients in particular:
A recent analysis by Skopec and Sloan looked at the availability of 14 cancer drugs in 62 Obamacare plans offered in five states and the District of Columbia. They found that coverage for those drugs was "fairly comprehensive across plans."
"We found, however, that cancer patients would face a difficult, and in some cases impossible, task in making apples-to-apples comparison of health plans based on drug coverage," Sloan and Skopec wrote.
That's because, among other things, there is no consistency in how plans provide direct links to their drug formularies. Some plans may even lack a comprehensive list of the covered drugs, and the formularies are not organized in the same way, the analysis found.
"The transparency issue is significant, because a person with cancer needs to be able to know that the drugs that they're taking are on their formulary," Sloan said.
While Obamacare plans cover more drugs for more people than in the past, not everything is covered. If drugs aren't included in a formulary, but you need them, "then you're on your own" in terms of paying for the medication, said Kaiser's Pollitz.
Third, and even worse, the insurance companies are gaming the formularies to reject patients with pre-existing conditions. In particular, AIDS patients:
Advocacy groups are accusing four health insurers in Florida of violating federal ObamaCare rules by discriminating against people with HIV and AIDS.
The National Health Law Program and The AIDS Institute have filed a complaint against CoventryOne, Cigna, Humana and Preferred Medical in Florida with the Office of Civil Rights at the Department of Health and Human Services alleging that their ObamaCare plans are overcharging for treatments.
According to the advocacy groups, and cost structure for all silver-level Qualified Health Plans in Florida — one of the options under ObamaCare — for drugs used to treat HIV and AIDS.
“When you put up roadblocks to assessing life saving medications through these high out of pocket costs and prior authorizations people with HIV are more likely to miss doses, experience gaps in treatment and go off treatment altogether,” said Carl Schmid, deputy executive director at The AIDS Institute. “As a result patients can develop drug resistance, become sick and even die.”
Fourth, there's no reason to think the insurance companies won't try the same trick for all chronically ill patients:
An ObamaCare Silver policy must pay 70 percent of expected medical costs, while covering 100 percent of “preventive care” (as defined by the federal government). However, the plan is designed for the average patient. So, it is easy for a health plan to design a plan that imposes very high medical maintenance costs on very sick, chronically ill people. High co-payments or co-insurance for prescriptions is one obvious method.
The Avalere study examined 123 formularies from silver-level exchange plans — the benchmark plan that will generally pay 70 percent of covered medical expenses, leaving the consumer responsible for 30 percent – and found that a fifth of them required cost sharing of 40 percent or more for certain classes of specialty drugs used to treat HIV/AIDS, multiple sclerosis, bipolar disorder, cancer and other illnesses. Avalere also concluded that 60 percent of silver plan formularies placed all medications for multiple sclerosis, Crohn’s disease, cancer and other illnesses in the plan’s highest formulary tier. That means patients who need these medicines would face the highest coinsurance percentage.
I seem to recall that one of the big selling points for ObamaCare was that people with pre-existing conditions would be covered. But here we see how the insurance companies are gaming formularies to prevent that. (As with doctors, it's not clear how data would even be gathered to find out how widespread the problem is; but perhaps patient advocacy groups can help. To be fair, they're only doing that to AIDs patients, and people with MS, bipolar disorder, or dancer. So there's that. If only there were a way to keep pharmaceutical costs low by giving the pharmaceutical buyer some leverage!
NOTE Originally published in part at Naked Capitalism.