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Insurance Companies Shifting Drugs to “Non-Preferred” to Raise Co-Pays

Health insurance companies can no longer deny patients coverage because of pre-existing conditions, but there’s no denying we’re expensive to insure. The latest strategy to increase profit is shifting even generic medications to “non-preferred” status, according to a story by ProPublica and The New York Times’ The Upshot. Patients pay higher co-pays for non-preferred medications. For some illness, all generics are listed as non-preferred. Migraine is mentioned in the story, which probably means triptans will be shifted to non-preferred (which could affect people with cluster headache as well).

Here’s the report in full, republished with permission:

A New Way Insurers are Shifting Costs to the Sick

By charging higher prices for generic drugs that treat certain illness, health insurers may be violating the spirit of the Affordable Care Act, which bans discrimination against those with pre-existing conditions.
by Charles Ornstein
ProPublica, Sep. 17, 2014, 11 a.m.

Health insurance companies are no longer allowed to turn away patients because of their pre-existing conditions or charge them more because of those conditions. But some health policy experts say insurers may be doing so in a more subtle way: by forcing people with a variety of illnesses — including Parkinson’s disease, diabetes and epilepsy — to pay more for their drugs.

Insurers have long tried to steer their members away from more expensive brand name drugs, labeling them as “non-preferred” and charging higher co-payments. But according to an editorial to be published Thursday in the American Journal of Managed Care, several prominent health plans have taken it a step further, applying that same concept even to generic drugs.

The Affordable Care Act bans insurance companies from discriminating against patients with health problems, but that hasn’t stopped them from seeking new and creative ways to shift costs to consumers. In the process, the plans effectively may be rendering a variety of ailments “non-preferred,” according to the editorial.

“It is sometimes argued that patients should have ‘skin in the game’ to motivate them to become more prudent consumers,” the editorial says. “One must ask, however, what sort of consumer behavior is encouraged when all generic medicines for particular diseases are ‘non-preferred’ and subject to higher co-pays.”

I recently wrote about the confusion I faced with my infant son’s generic asthma and allergy medication, which switched cost tiers from one month to the next. Until then, I hadn’t known that my plan charged two different prices for generic drugs. If your health insurer does not use such a structure, odds are that it will before long.

The editorial comes several months after two advocacy groups filed a complaint with the Office of Civil Rights of the United States Department of Health and Human Services claiming that several Florida health plans sold in the Affordable Care Act marketplace discriminated against H.I.V. patients by charging them more for drugs.

Specifically, the complaint contended that the plans placed all of their H.I.V. medications, including generics, in their highest of five cost tiers, meaning that patients had to pay 40 percent of the cost after paying a deductible. The complaint is pending.

“It seems that the plans are trying to find this wiggle room to design their benefits to prevent people who have high health needs from enrolling,” said Wayne Turner, a staff lawyer at the National Health Law Program, which filed the complaint alongside the AIDS Institute of Tampa, Fla.

Turner said he feared a “race to the bottom,” in which plans don’t want to be seen as the most attractive for sick patients. “Plans do not want that reputation.”

In July, more than 300 patient groups, covering a range of diseases, wrote to Sylvia Mathews Burwell, the secretary of health and human services, saying they were worried that health plans were trying to skirt the spirit of the law, including how they handled co-pays for drugs.

Generics, which come to the market after a name-brand drug loses its patent protection, used to have one low price in many insurance plans, typically $5 or $10. But as their prices have increased, sometimes sharply, many insurers have split the drugs into two cost groupings, as they have long done with name-brand drugs. “Non-preferred” generic drugs have higher co-pays, though they are still cheaper than brand-name drugs.

With brand names, there’s usually at least one preferred option in each disease category. Not so for generics, the authors of the editorial found.

One of the authors, Gerry Oster, a vice president at the consulting firm Policy Analysis, said he stumbled upon the issue much as I did. He went to his pharmacy to pick up a medication he had been taking for a couple of years. The prior month it cost him $5, but this time it was $20.

As he looked into it, he came to the conclusion that this phenomenon was unknown even to health policy experts. “It’s completely stealth,” he said.

In some cases, the difference in price between a preferred and non-preferred generic drug is a few dollars per prescription. In others, the difference in co-pay is $10, $15 or more.

Even small differences in price can make a difference, though, the authors said. Previous research has found that consumers are less likely to take drugs that cost more out of pocket. “There’s very strong evidence for quite some time that even a $1 difference in out-of-pocket expenditures changes Americans’ behavior” regarding their use of medical services, said the other co-author, Dr. A. Mark Fendrick, a physician and director of the University of Michigan Center for Value-Based Insurance Design.

Fendrick said the strategy also ran counter to efforts by insurance companies to tie physicians’ pay to their patients’ outcomes. “I am benchmarked on what my diabetic patients’ blood sugar control is,” he said. “I am benchmarked on whether my patients’ hypertension or angina” is under control, he said. Charging more for generic drugs to treat these conditions “flies directly in the face of a national movement to move from volume to value.”

If there are no cheaper drugs offered, patients might just skip taking their pills, Fendrick said.

The authors reviewed the drug lists, called formularies, of six prescription drugs plans: Harvard Pilgrim Health Care in Massachusetts; Blue Cross Blue Shield of Michigan; Blue Cross and Blue Shield of Illinois; Geisinger Health Plan in Pennsylvania; Aetna; and Premera Blue Cross Blue Shield of Alaska. They wanted to see how each plan handled expert-recommended generic drugs for 10 conditions.

The conditions are not all high cost like H.I.V. and Parkinson’s. They also include migraine headaches, community acquired pneumonia and high blood pressure.

Premera and Aetna had preferred generic drugs for each of the 10 conditions the authors examined. Harvard Pilgrim, a nonprofit often considered among the nation’s best, did not have a lower-cost generic in any of the 10 categories.

Four of the six plans had no preferred generic antiretroviral medication for patients with H.I.V.

In a statement to ProPublica, Harvard Pilgrim said it charges more for some generics because they are more expensive. The cheapest generics carry a $5 co-payment for a 30-day supply. More expensive generics range from $10 to $25, or 20 percent of the cost for a 30-day supply. The health plan said its members pay less for their medications than the industry average.

Blue Cross and Blue Shield of Illinois said that its preferred generics had no co-payment at all, and that non-preferred generics cost $10. “We historically only had one tier of generic drugs at a $10 co-pay,” the spokeswoman Mary Ann Schultz said in an email.

The Blue Cross Blue Shield of Michigan spokeswoman Helen Stojic said the editorial looked only at its drug plan for Medicare patients, which the government closely regulates. Under Medicare, patients can appeal a drug’s tier and seek to pay a lower co-payment, she said.

Geisinger did not respond to questions.

Health plans that participate in Medicare’s prescription drug program, known as Part D, have been moving rapidly to create two tiers of generic drugs. This year, about three-quarters of plans had them, according to an article co-written by Jack Hoadley, a health policy analyst at Georgetown University’s Health Policy Institute. The practical effect of such arrangements probably varies based on the difference in cost, he said.

Dan Mendelson, chief executive of Avalere Health, a consulting firm, has studied the way in which health insurers structure their benefits. He said the increasing number of drug tiers in some plans was confusing for patients.

“Consumers often don’t understand which drugs are where,” he said. “They don’t understand the purpose of tiering. They just get to the pharmacy counter and it gets done to them.”

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Headache Disorders & Migraine Blog Carnival: Last Call for Submissions

Submissions for the September Headache Disorders and Migraine Blog Carnival are due tomorrow, Sept. 5, by 11:59 p.m. Invisible Illness is the theme of this month’s carnival. Let us know your thoughts on the pros and cons of having an invisible illness or respond to the 30 Things meme sponsored by the 2014 Invisible Illness Awareness Week, which will be Sept 8-14.

To join us, email the link to your post to kerrie[at]thedailyheadache[dot]com and include the following information with your submission:

(1) Your name as you would like it to appear in the carnival.
(2) The title of the blog post you’re submitting.
(3) The url of the blog post you’re submitting.
(4) The title of your blog.
(5) The url of your blog.

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Understanding of Invisible Illness & Visible Disabilities

When you’re struggling with the frustrations of an invisible illness, it’s tempting to think, “If only people could see how sick I was, they’d understand.” While people may have a different understanding of visible disabilities or illnesses than they do for invisible ones, the understanding isn’t better or more. The judgement and criticism still come, just in different ways.

Despicable Memes is an excellent article that addresses some of the harmful beliefs about physical disabilities, particular people in wheelchairs. This particular article struck me because I saw so many parallels with the aspects of invisible illnesses that people struggle with. In particular,

  • If your symptoms or behaviors don’t fit with what other people expect of you, you’ll be judged.
  • When you speak up about how hurtful and damaging the comments are, you’ll be told you’re too sensitive.
  • People are only comfortable talking about illness or disability if the focus is on working hard, getting better, being strong, and overcoming strife.

Obviously, having a visible disability isn’t a breeze. I know that you know that. Still, I’ve seen plenty of people online say that they wish people could see their invisible disability so they’d understand it. I do not. Not only because I don’t want stares and pity or because I like being able to hide my illness when I want to, but because the grass is just as dry and brittle on the other side.

This month’s Headache Disorders & Migraine Blog Carnival, which I’m hosting here on September 8, will be devoted to invisible illness. Bloggers, if you’d like to share your thoughts on invisible illness, please read the call for submissions and send me your posts by 11:59 p.m. on Friday, September 5.

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Call for Submissions: September Headache Disorders & Migraine Blog Carnival

In honor of Invisible Illness Awareness Week, Invisible Illness will be the theme of September’s Headache Disorders & Migraine Blog Carnival, which I’m hosting here on September 8. Let us know your thoughts on having an invisible illness or respond to the 30 Things meme sponsored by Invisible Illness Awareness Week.

To join us, email the link to your post to kerrie[at]thedailyheadache[dot]com by 11:59 p.m. Pacific time on Friday, Sept. 5. Please include the following information with your submission:

(1) Your name as you would like it to appear in the carnival.
(2) The title of the blog post you’re submitting.
(3) The url of the blog post you’re submitting.
(4) The title of your blog.
(5) The url of your blog.

I’m looking forward to reading and sharing the submissions!

 

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Use Migraine as an Excuse, Recommends Advice Columnist

An advice columnist recommends using migraine as an excuse to avoid the potentially awkward conversation that would ensue if a female employee told her male bosses that she has to work from home one day each month due to menstrual cramps. And he does so in a remarkably insensitive manner:

I suggest, at the risk of overkill, concocting a migraine headache. Migraines can last for hours or for days; they’re famously disruptive to work schedules and social calendars. Also, it seems somehow permissible to use a migraine as an excuse because—well, I hear they’re awful, but—they’re not contagious and they don’t generally snowball into anything fatal, right? There’s no special worry about the mortality of the migraineur. Further, some back-on-the-envelope cultural analysis suggests some mystery and glamour to the ailment. It’s a serious person’s malady, with a Didion tinge of thoughtful drama.

Glamorous is not the word I’d use to describe the illness that has caused me to be housebound and even bedridden. I should start wearing silk pajamas and calling everyone “dahling.” I may not be able to work a steady job or form coherent thoughts, but at least I have a “serious person’s malady” — too bad few people take migraine seriously enough to recognize it is a potentially disabling neurological disorder. Perhaps if I play up the “thoughtful drama” people will understand how migraine has gutted my life. At least a woman can be spared the embarrassment of admitting that she menstruates by trivializing the severity of an illness that wreaks havoc on millions of lives.

Think I’m over-reacting? Here’s an explanation of the harm of using migraine as an excuse.

Want to leave a comment for the advice columnist? Following this link to the article on Slate. I have left a comment and expect people will soon respond that I’m too thin-skinned and need a sense of humor. Funny how people say that so readily until they encounter a topic that pushes their buttons.