Drug costs skyrocket under new health law
As Americans start shopping for insurance under President Obama’s new health care law, many are concerned whether the plans will cover the medications they take – and how much they will have to pay out-of-pocket.
Even those with existing coverage are concerned because some have already seen a huge spike in prescription drug costs that their current plan covers very little of.
For those who cannot live without their medication, these skyrocketing drug costs can create a major financial burden, not to mention create a huge dilemma if it forces them to have to choose between their medication or budget.
For example, an Indiana pastor recently went to pick up his wife’s medication at a local pharmacy, only to discover the cost had nearly quadrupled from one month to the next.
“When I first saw the receipt, I thought there had to be some kind of mistake, either by our insurance company or the pharmacy,” said Steve Carlock, who gave up his law practice of 26 years to become a pastor.
“But then the pharmacist explained that the manufacturer of the medication had recently increased its price for reasons I still don’t fully understand,” he added. “All I know for sure is the price jumped from an already expensive $250 a month to an astronomical $10800 a month, and I’m not sure how we’re going to afford it on my pastor’s salary.”
Pastor Carlock said that even though he and his wife have decent health insurance, it covers very little of his wife’s medication. He’s also concerned because the cost of their premium has doubled since the passage of Obama’s health law.
After the law passed in 2008, Obama infamously promised he would cut insurance premiums for the average family by $2,500. But, according to the Kaiser Family Foundation, the annual cost of health insurance has actually increased to approximately $16,000 a year for the average family.
Accordingly, many consumers shopping for new insurance under Obamacare fear the cost of their medications may not be adequately covered.
Those fears will likely increase when open enrollment starts October 1. That’s less than two weeks away, yet many questions still exist and answers remain elusive, especially for consumers whose health and wellbeing depends on expensive medications.
Details about which drugs will be covered still have not been released by those states offering exchanges, which are essentially online marketplaces where consumers can shop for health insurance plans.
Moreover, insurers have released few details about how much consumers will have to contribute or what restrictions will be placed on some medications. Only a few states have revealed that some plans will require patients to contribute as much as 50 percent to the cost of the most expensive drugs.
“This is going to make it very difficult for Americans whose lives depend on expensive medicines,” said Carlock. “Especially during a time when finding another job to make ends meet isn’t as easy as it used to be.”
To compound matters, there is not a central hub for evaluating drug coverage. Indeed, patient advocacy groups are already warning members to be ready for a laborious task as they navigate through Web sites, downloaded records and phone calls to customer service hot lines.
“I had frankly expected a higher level of transparency by this point,” said Brian Rosen, the senior vice president for government and public affairs at the Leukemia and Lymphoma Society.
Meanwhile, insurers and officials at the White House are asking for patience, saying that once enrollment begins, consumers will have six months to choose a plan that is right for them.
The health insurance plans offered in the marketplaces must cover a minimum number of medications in every treatment category, with the exact count set by a representative commercial plan, known as a benchmark plan, that is designated in each state.
According to an analysis by Avalere Health, the states of Oregon, Virginia, Connecticut and others plan to cover more than 97 percent of drugs, while states like Maryland, Colorado and California plan to cover 54 to 84 percent.
If a consumer can show that a drug not covered by their plan is medically necessary, they can lobby for an exception.
However, how many drugs will be offered under the plans isn’t the only question. An even more important question may be how much patients will have to contribute toward the cost of those drugs?
Very few states have answered those questions. However, advocates for patients with chronic diseases, as well as those in the drug industry, say they are troubled by what they have seen so far.
Many of the plans are requiring that patients taking the most expensive drugs used to treat serious diseases – such as cancer, multiple sclerosis and autoimmune disorders – contribute significantly to the cost.
Among the dozens of plans Oregon is expected to offer, for example, are standard plans that will ask consumers to pay 50 percent of the cost of specialty drugs.
Although asking consumers to share in the rising cost of specialty drugs is nothing new, the practice is apparently more prevalent in the plans offered in the state marketplaces – and experts say consumers will be asked to pay more.
A recent survey by the Kaiser Family Foundation of employer health plans found that the current average contribution was 32 percent for specialty drugs.
However, the new federal health law limits the amount that a patient is required to pay out-of-pocket to $6,350 a year for an individual, and $12,700 for a family. This is a welcome change for patients who were previously required to pay tens of thousands of dollars in drug and medical costs.
In addition, some patients will qualify for subsidies that will further lower that cap, which applies to both medical and drug benefits, depending on their income.
Pharmaceutical companies have traditionally offered assistance programs and coupon cards to help patients cover their out-of-pocket costs, but the ongoing availability of such programs and coupons are additional questions that have yet to be answered.