Insurers’ ‘specialty tiers’ imperil health care

California health insurance plans are jeopardizing patient health by moving vital medications to so-called “specialty tiers,” which place the cost of treatment beyond the reach of most patients and which may be illegal under both California and federal discrimination laws.

Rather than paying a fixed copayment, Californians whose medications are placed on specialty tiers are often forced to pay coinsurance – or a percentage of the total cost of the drugs – which can mean hundreds or even thousands of dollars per month in out-of-pocket costs for a single medication.

A California patient living with arthritis or hemophilia, for example, might initially pay a fixed copayment of $10 or $20 for a thirty day supply of one of their medications. If their insurance plan decides to move their medication to a specialty tier, the patient could pay 25 to 33 percent of the total cost of the medication. The average cost of a specialty drug exceeds $3,000, while some cost as much as $50,000 for a 30-day supply, according to pharmacy benefit manager Prime Therapeutics.

Although any Californian might be affected by specialty tiers, those patients among the likeliest to be affected include Californians living with chronic conditions like rheumatoid arthritis, hemophilia, multiple sclerosis, hepatitis C, lupus and those with life-threatening conditions like HIV, breast cancer, colorectal cancer, leukemia and lymphoma, among many others.

No mother or father should ever have to choose between paying for medication and food for their families; or between paying their mortgage or rent and not having a roof over their head.

Many patients with these conditions must take multiple medications to improve the quality and duration of their lives, and the drugs with these conditions are typically new, produced in lesser quantities than other drugs, and not available as less expensive generics. Patients often have no choice but to take the brand name specialty medication prescribed to them.

When patients cannot afford their medications, they often forego their prescribed dosage and undertreat their conditions, or stop taking their medications altogether, which can lead to more rapid disease progression, a deterioration in health, and increased health care costs in the form of unnecessary hospitalization and emergency services, additional physician visits, etc.

No mother or father should ever have to choose between paying for medication and food for their families; or between paying their mortgage or rent and not having a roof over their head.

When insurers arbitrarily drive up coinsurance costs for their most vulnerable patients, they are undermining the basic premise of health insurance, which is to spread and share health care costs. Specialty tier cost structures do the exact opposite – they pass the financial burden of health care on to the most vulnerable patients, while the healthy and the health insurers pay less.

Specialty tiers are not only a danger to patients – there is some evidence that they may be inherently illegal according to both California and federal law.

Specialty tiers apply a totally different benefit structure to certain medicines that patients with particular diseases need, and disproportionately affect certain demographic groups, especially low-income families.

By selectively applying high cost-sharing requirements to these drugs, while requiring lower, fixed copayment requirements for other drugs, plans using specialty tiers force certain patients who suffer from certain diseases to pay much more than other patients.

The Affordable Care Act prohibits discrimination against patients based on disease or condition, their expected length of life or their quality of life. The California Unruh Civil Rights Act provides that all persons in California are free and equal, and entitled to full and equal accommodations no matter their disability or medical condition. California law specifically defines disabilities as including, but not limited to, chronic or episodic conditions such as HIV/AIDS, hepatitis, epilepsy, seizure disorder, diabetes, depression, bipolar disorder, multiple sclerosis and heart disease.

Both federal law and California law empower California government officials to take action to prevent discrimination in health care, particularly within the health insurance marketplaces mandated by the Affordable Care Act.

California state officials should stand with patients and pass common-sense reforms to protect all Californians from health insurance practices that discriminate against the most vulnerable patients. The stakes are simply too high – if California continues to delay action on specialty tiers, lives will be lost.

Ed’s Note:  Liz Helms is President and CEO of the California Chronic Care Coalition. 


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