Insurance Companies Are Making Chronically Ill People Pay More For Necessary Drugs


Insurance companies have circumvented a provision of the Affordable Care Act that forbids them from turning away people with preexisting conditions by shifting exorbitant drug costs to members of that population, ultimately discouraging them from enrolling in certain plans, a new study has confirmed.

For this study, Harvard University researchers examined 48 plans in 12 states using the federal marketplace — including Delaware, Florida, Louisiana, Michigan, South Carolina, and Illinois. They found that one out of four plans placed HIV drugs in the highest-cost category, requiring consumers to shoulder at least 30 percent of the costs instead of paying a standard co-pay.

The analysis also found that people enrolled in these drug plans paid more than triple the amount their counterparts in other plans doled out. According to the study, patients had to pay a separate deductible for medication, compared to less than 20 percent of consumers in other plans.

While the Harvard study, recently published in the New England Journal of Medicine, only examined HIV medication, authors noted that similar issues arise when it comes to mental illness, cancer, diabetes, and other chronic conditions.


“That’s really a large cost difference, and really is a very significant financial constraint for those with chronic conditions, particularly H.I.V.,” Douglas B. Jacobs, the lead author of the study, who is pursuing degrees in public health at the Harvard T. H. Chan School of Public Health and medicine at the University of California, San Francisco, told the New York Times.

The average annual cost of HIV/AIDS medication, according to the Centers for Disease Control and Prevention, currently stands at more than $19,000. A consumer could expect to pay nearly $380,000 over the course of his or her lifetime to keep the disease in check. Although the Affordable Care Act bans insurers from charging more than $6,350 in annual out-of-pocket costs for individuals and more than $12,700 for families, people with chronic diseases often reach this threshold within a month because of their medication’s special classification.

While insurers have long tried to mitigate costs and encourage use of generic drugs by placing HIV medication in categories with higher co-pays, the price of what was once affordable medication has increased by more than 1000 percent in a relatively short amount of time, pushing it into higher cost categories to the detriment of people suffering from chronic diseases.

Consumers and advocacy groups said they have had enough. Last summer, patient advocate groups filed formal complaints with Health and Human Services officials in Florida and Georgia, alleging that insurance companies tried to price consumers out of their plans and create barriers to access for medication they have taken for years. Some advocates have made headway in Florida, with Insurance Commissioner Kevin M. McCarthy reaching an agreement with four insurers to lower cost-sharing for special medications — which previously stood at 50 percent — to a more manageable 10 percent.

Advocate groups, however, have showed no sign of slowing down. In July, more than 300 organizations signed a letter imploring U.S. Health and Human Services Secretary Sylvia Burwell to strengthen enforcement of anti-discrimination laws that protect people with preexisting chronic conditions.


“Despite enrollee out-of-pocket limits that are included in the ACA and reduced cost-sharing for people with very low income levels, some plans are placing extremely high co- insurance on lifesaving medications, and putting all or most medications in a given class, including generics, on the highest cost tier. This creates an undue burden on enrollees who rely on these medications,” the letter said.

The coalition of advocacy groups concluded that “these practices are highly discriminatory against patients with chronic health conditions and may, in fact, violate the ACA non-discrimination provisions.”

In December, the Obama administration announced that it would investigate allegations of insurers’ discrimination against people with chronic diseases, designating these kind of practices as discriminatory if they restrict access to drugs meant to treat or quell chronic conditions. The White House later issued rules that require insures to be more diligent in updating publications that list its doctors and hospitals. The White House, however, stopped short in obligating them to expand said networks.

These overtures may not be enough in preventing drug prices from rising even more, especially since Big Pharma has proven to have great influence in public policy. An analysis by the Center for Responsive Politics found that the pharmaceutical industry spent more than $227 million as part of its lobbying strategy in 2014.

Big Pharma’s relationship with Washington is nothing new. A 10-year, $80 million cost-savings deal between pharmaceutical representatives and the White House during the design of the Affordable Care Act, for example, prevented the executive branch from making any further attempts to negotiate lower drug prices and import cheaper drugs from Canada or Europe

Senators who questioned the deal — including Sherrod Brown (D-Ohio) and Bernie Sanders (I-Vt.) — decried Big Pharma’s influence at the expense of consumers. “The drug companies form the most powerful lobby in Washington,” Sanders told the LA Times in 2009. ”They never lose.”