FORT LAUDERDALE, Fla. -- 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 Robert 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.
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 Michelle Vogel, executive director of the biotherapeutics alliance.
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