Insurers Find New Way to Discriminate Against Patients

Although one of the central features of the Affordable Care Act (ACA) was eliminating discrimination based on preexisting conditions, there is evidence insurers have found ways to dissuade high-cost patients from enrolling in their plans, according to a paper in the New England Journal of Medicine.

Douglas B. Jacobs, ScB, and Benjamin D. Sommers, MD, PhD, both from HHS, analyzed the placement of HIV drugs in formularies after a complaint was submitted to HHS. Insurers in Florida offering plans through the federal Marketplace had placed all HIV drugs, including generics, in the tier with the highest cost sharing, which discouraged people with the infection from selecting these plans.

“Insurers have historically used tiered formularies to encourage enrollees to select generic or preferred brand-name drugs instead of higher-cost alternatives,” the authors wrote. “But if plans place all HIV drugs in the highest cost-sharing tier, enrollees with HIV will incur high costs regardless of which drugs they take.”

The investigators analyzed this so-called “adverse tiering” in 12 states: 6 with insurers named in the HHS complaint (Delaware, Florida, Louisiana, Michigan, South Carolina, and Utah) and 6 of the most populous states without those insurers (Illinois, New Jersey, Ohio, Pennsylvania, Texas, and Virginia).

They found that 12 of the 48 plans had evidence of adverse tiering, this included 5 plans in the 6 states without insurers listed in the HHS complaint. Enrollees in adverse-tiering plans had average out-of-pocket HIV drug costs of $4,892 compared with just $1,615 for enrollees in plans without adverse tiering.

This phenomenon was not unique to HIV. Similar evidence of adverse tiering has been found for several other high-cost chronic conditions, such as mental illness, cancer, diabetes, and rheumatoid arthritis. More than half of Marketplace plans required at least 30% coinsurance for all covered drugs in at least one class.

According to the authors, adverse tiering will likely lead to sicker people clustering in plans that don’t use this tactic. Furthermore, the practice will put unexpected financial srain on patients with chronic conditions.

“These enrollees may select an [adverse-tiering plan] for its lower premium, only to end up paying extremely high out-of-pocket costs,” the authors wrote.

They suggest some potential solutions including price transparency to address unexpectedly high out-of-pocket costs, and policies that would end adverse tiering by setting an upper limit on cost sharing for medications for certain protected conditions.

However, Mr Jacobs and Dr Sommers admit that bringing an end to adverse tiering will not complete eliminate discrimination as insurers will likely think of new ways to dissuade sicker enrollees from joining their plans.

“The ACA has already made major inroads in designing a more equitable health care system for people with chronic conditions, but the struggle is far from over,” the authors concluded.