Insurers raising co-pays for expensive drugs

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Insurers raising co-pays for expensive drugs

Health insurers are increasingly charging patients sharply higher amounts for

the most expensive drugs, often causing sticker shock for the sick people who

need them.

Health plans that have hiked co-payments say affected patients must pay hundreds

of dollars more per month for drugs that can cost thousands, in order to prevent

big jumps in premiums for everyone else.

But patients and their advocates say the practice discriminates against people

who are unlucky enough to have a disease that is expensive to treat, and forces

some to stop taking life-saving medicine. Three reports out this month say the

practice can devastate patients financially.

Florida has been hit hard, with its large population of seniors and a high

proportion of younger patients with HIV, hepatitis, kidney disease and other

chronic conditions that are treated with expensive medicines. One estimate says

12 percent of Florida prescriptions — and growing — are affected by the cost

hikes.

Randall Rabbitt, a Delray Beach sales manager for an auto warranty firm, felt

the co-pay shock. He had been paying $50 a month for Actemra, an intravenous

drug for the crippling effects of rheumatoid arthritis, in which the body's

immune system attacks his joints. Then in June, with no notice, the insurer

raised his share to $498.

" I scraped up the money. But I'm not in position to pay $498 a month, " Rabbitt

said. " That's on top of the $632 a month we pay for the premium. My family can't

afford that. I may have to stop taking it.

" If I'm not on this, I literally have severe neck pain every day, to the point

where I can't lift my head. My hips and ankles, I can't walk, " Rabbitt said. " It

makes all the difference between being able to do something or not. I'd have to

go on disability and then what life would I have? "

What happened? The PPO at his job moved the drug into a " specialty tier, " a

co-pay class typically reserved for pills and IV drugs costing more than $600 a

month — such as Rabbitt's Actemra at $1,100 to $2,100 a month.

Rather than a set co-pay of $5 to $100 a month, specialty tiers require patients

to pay " co-insurance " of typically 25 percent to 33 percent of the total cost. A

patient taking the hepatitis C drug Pegasys costing $2,400 a month could face

co-insurance of $600 to $800.

Many specialty drugs needed lengthy or technology-heavy research to bring them

to market or are developed from blood or biological products, all of which can

be costly. Affected diseases include multiple sclerosis, the digestive disorder

Crohn's disease and hemophilia. The most expensive drug in the nation last year

was the IV blood-disease drug Soliris, at a cost of $400,000 a year.

Specialty tiers — called tier 4 — were rare until Medicare started prescription

drug coverage in 2006. The government allowed drug plans to use the high-price

tiers as a way to hold down costs and monthly premiums. Today, 85 percent of

Medicare plans have them.

Other health insurers and employers that offer coverage now are following suit.

About 13 percent of employees last year were covered by plans with specialty

tiers, up steadily from just 3 percent in 2004, according to the research group

Kaiser Family Foundation.

In Florida, 12 percent of prescriptions in 2008 were from tier 4, and the number

has grown since then, according to research by the nonprofit patient group

Alliance for Biotherapeutics. That's about average, nationally.

" I don't think it's a fad. It will just keep growing, said Debra Lage, executive

senior director at Mahoney & Associates in Fort Lauderdale, which advises

employers about benefit plans. " Companies are trying to save money. "

Insurers and employers need to act because more illnesses are being treated with

high-cost biological drugs that work better than older pills, driving up costs

for insurers and employers, said Zirkelbach, press secretary for

America's Health Insurance Plans, which represents insurers.

" They're trying to strike a balance. You want to have plans that are affordable

but still give consumers access to the drugs they need, " Zirkelbach said.

Aetna and most employers that buy its coverage cushion the blow by setting a

maximum on the patient's monthly share, said Walt Cherniak, an Aetna spokesman.

Modest-income patients also may qualify for discounts from drug manufacturers.

But despite all that, patients still take a big hit if their drugs go on tier 4,

advocates said. Rabbitt's insurer may agree to limit his share to $250 a month,

but that's still a five-fold increase.

He previously had tried a half-dozen other drugs, all of which worked for a

while and then failed. He did well on a drug called Enbrel, but it's also on

tier 4 now and even more expensive.

Three reports this month — from the patient advocate groups National Minority

Quality Forum and National Health Council and one sponsored by drugmaker Pfizer

Inc. — found that specialty tiers financially disrupt and confuse patients.

Kaiser reported that on average, patients taking tier 4 drugs shoulder 36

percent of the cost, 72 percent in HMOs.

New York last fall banned insurers from having specialty tiers, Vermont imposed

a one-year moratorium. A bill is being written in Congress for a national ban.

Five states are studying the problem and bills are being debated in 10 other

states, said Vogel, executive director of the biotherapeutics alliance.

Advocates are trying to craft a bill for Florida that won't cost the state any

money. Vogel doubts the Republican-led state Legislature would ban tier 4, but

they hope the state may set a maximum on patients' payments or halt insurers

from raising co-pays except at annual renewal time.

" We need action, " said Rabbitt's arthritis specialist, Dr. e Saxe, who

has patients who stopped taking tier 4 drugs. " People are paying for insurance

to cover their catastrophic illnesses, and then it doesn't cover anything. "

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