Medication Co-Pays To Skyrocket.

[SirNitram]

Link

Health insurance companies are rapidly adopting a new pricing system for very expensive drugs, asking patients to pay hundreds and even thousands of dollars for prescriptions for medications that may save their lives or slow the progress of serious diseases.

With the new pricing system, insurers abandoned the traditional arrangement that has patients pay a fixed amount, like $10, $20 or $30 for a prescription, no matter what the drug’s actual cost. Instead, they are charging patients a percentage of the cost of certain high-priced drugs, usually 20 to 33 percent, which can amount to thousands of dollars a month.

The system means that the burden of expensive health care can now affect insured people, too.

No one knows how many patients are affected, but hundreds of drugs are priced this new way. They are used to treat diseases that may be fairly common, including multiple sclerosis, rheumatoid arthritis, hemophilia, hepatitis C and some cancers. There are no cheaper equivalents for these drugs, so patients are forced to pay the price or do without.

Insurers say the new system keeps everyone’s premiums down at a time when some of the most innovative and promising new treatments for conditions like cancer and rheumatoid arthritis and multiple sclerosis can cost $100,000 and more a year.

But the result is that patients may have to spend more for a drug than they pay for their mortgages, more, in some cases, than their monthly incomes.

The system, often called Tier 4, began in earnest with Medicare drug plans and spread rapidly. It is now incorporated into 86 percent of those plans. Some have even higher co-payments for certain drugs, a Tier 5.

Now Tier 4 is also showing up in insurance that people buy on their own or acquire through employers, said Dan Mendelson of Avalere Health, a research organization in Washington. It is the fastest-growing segment in private insurance, Mr. Mendelson said. Five years ago it was virtually nonexistent in private plans, he said. Now 10 percent of them have Tier 4 drug categories.

Private insurers began offering Tier 4 plans in response to employers who were looking for ways to keep costs down, said Karen Ignagni, president of America’s Health Insurance Plans, which represents most of the nation’s health insurers. When people who need Tier 4 drugs pay more for them, other subscribers in the plan pay less for their coverage.

But the new system sticks seriously ill people with huge bills, said James Robinson, a health economist at the University of California, Berkeley. “It is very unfortunate social policy,” Dr. Robinson said. “The more the sick person pays, the less the healthy person pays.”

Traditionally, the idea of insurance was to spread the costs of paying for the sick.

“This is an erosion of the traditional concept of insurance,” Mr. Mendelson said. “Those beneficiaries who bear the burden of illness are also bearing the burden of cost.”

And often, patients say, they had no idea that they would be faced with such a situation.

It happened to Robin Steinwand, 53, who has multiple sclerosis.

In January, shortly after Ms. Steinwand renewed her insurance policy with Kaiser Permanente, she went to refill her prescription for Copaxone. She had been insured with Kaiser for 17 years through her husband, a federal employee, and had had no complaints about the coverage.

She had been taking Copaxone since multiple sclerosis was diagnosed in 2000, buying a 30 days’ supply at a time. And even though the drug costs $1,900 a month, Kaiser required only a $20 co-payment.

Not this time. When Ms. Steinwand went to pick up her prescription at a pharmacy near her home in Silver Spring, Md., the pharmacist handed her a bill for $325.

There must be a mistake, Ms. Steinwand said. So the pharmacist checked with her supervisor. The new price was correct. Kaiser’s policy had changed. Now Kaiser was charging 25 percent of the cost of the drug up to a maximum of $325 per prescription. Her annual cost would be $3,900 and unless her insurance changed or the drug dropped in price, it would go on for the rest of her life.

“I charged it, then got into my car and burst into tears,” Ms. Steinwand said.

She needed the drug, she said, because it can slow the course of her disease. And she knew she would just have to pay for it, but it would not be easy.

“It’s a tough economic time for everyone,” she said. “My son will start college in a year and a half. We are asking ourselves, can we afford a vacation? Can we continue to save for retirement and college?”

Although Kaiser advised patients of the new plan in its brochure that it sent out in the open enrollment period late last year, Ms. Steinwand did not notice it. And private insurers, Mr. Mendelson said, can legally change their coverage to one in which some drugs are Tier 4 with no advance notice.

Medicare drug plans have to notify patients but, Mr. Mendelson said, “that doesn’t mean the person will hear about it.” He added, “You don’t read all your mail.”

Some patients said they had no idea whether their plan changed or whether it always had a Tier 4. The new system came as a surprise when they found out that they needed an expensive drug.

That’s what happened to Robert W. Banning of Arlington, Va., when his doctor prescribed Sprycel for his chronic myelogenous leukemia. The drug can block the growth of cancer cells, extending lives. It is a tablet to be taken twice a day — no need for chemotherapy infusions.

Mr. Banning, 81, a retired owner of car dealerships, thought he had good insurance through AARP. But Sprycel, which he will have to take for the rest of his life, costs more than $13,500 for a 90-day supply, and Mr. Banning soon discovered that the AARP plan required him to pay more than $4,000.

Mr. Banning and his son, Robert Banning Jr., have accepted the situation. “We’re not trying to make anybody the heavy,” the father said.

So far, they have not purchased the drug. But if they do, they know that the expense would go on and on, his son said. “Somehow or other, myself and my family will do whatever it takes. You don’t put your parent on a scale.”

But Ms. Steinwand was not so sanguine. She immediately asked Kaiser why it had changed its plan.

The answer came in a letter from the federal Office of Personnel Management, which negotiates with health insurers in the plan her husband has as a federal employee. Kaiser classifies drugs like Copaxone as specialty drugs. They, the letter said, “are high-cost drugs used to treat relatively few people suffering from complex conditions like anemia, cancer, hemophilia, multiple sclerosis, rheumatoid arthritis and human growth hormone deficiency.”

And Kaiser, the agency added, had made a convincing argument that charging a percentage of the cost of these drugs “helped lower the rates for federal employees.”

Ms. Steinwand can change plans at the end of the year, choosing one that allows her to pay $20 for the Copaxone, but she worries about whether that will help. “I am a little nervous,” she said. “Will the next company follow suit next year?”

But it turns out that she won’t have to worry, at least for the rest of this year.

A Kaiser spokeswoman, Sandra R. Gregg, said on Friday that Kaiser had decided to suspend the change for the program involving federal employees in the mid-Atlantic region while it reviewed the new policy. The suspension will last for the rest of the year, she said. Ms. Steinwand and others who paid the new price for their drugs will be repaid the difference between the new price and the old co-payment.

Ms. Gregg explained that Kaiser had been discussing the new pricing plan with the Office of Personnel Management over the previous few days because patients had been raising questions about it. That led to the decision to suspend the changed pricing system.

“Letters will go out next week,” Ms. Gregg said.

But some with the new plans say they have no way out.

Julie Bass, who lives near Orlando, Fla., has metastatic breast cancer, lives on Social Security disability payments, and because she is disabled, is covered by insurance through a Medicare H.M.O. Ms. Bass, 52, said she had no alternatives to her H.M.O. She said she could not afford a regular Medicare plan, which has co-payments of 20 percent for such things as emergency care, outpatient surgery and scans. That left her with a choice of two Medicare H.M.O’s that operate in her region. But of the two H.M.O’s, her doctors accept only Wellcare.

Now, she said, one drug her doctor may prescribe to control her cancer is Tykerb. But her insurer, Wellcare, classifies it as Tier 4, and she knows she cannot afford it.

Wellcare declined to say what Tykerb might cost, but its list price according to a standard source, Red Book, is $3,480 for 150 tablets, which may last a patient 21 days. Wellcare requires patients to pay a third of the cost of its Tier 4 drugs.

“For everybody in my position with metastatic breast cancer, there are times when you are stable and can go off treatment,” Ms. Bass said. “But if we are progressing, we have to be on treatment, or we will die.”

“People’s eyes need to be opened,” she said. “They need to understand that these drugs are very costly, and there are a lot of people out there who are struggling with these costs.”

Correction: April 15, 2008
An article on Monday about a large increase in insurance co-payments for high-priced drugs misstated the way the multiple sclerosis drug Copaxone is administered. It is injected, not taken in pill form.

[Knife]

There are no cheaper equivalents for these drugs, so patients are forced to pay the price or do without.

I wrote a paper about medication costs and in my research I found that people even get totally gouged with generics once the brand name drugs patent runs out. Local pharmacies are gouging with the generics, marking up drugs 1000% or more than what they buy them for. Sure, they're a bit cheaper than the brand name drugs but.....

Costco and believe it or not, Walmart seem to have taken the stance (right now anyway) of making little off of prescription drugs so they are immencly cheaper than 'local pharmacies'.

[Tanasinn]

That shouldn't be surprising: the more people Wal-Mart and the like put out of business now, the easier it will be for them to mark up prices later.

[General Zod]

So this means if I ever need anything serious done my insurance will be next to useless? Just fucking wonderful.

[Glocksman]

There are no cheaper equivalents for these drugs, so patients are forced to pay the price or do without.

I wrote a paper about medication costs and in my research I found that people even get totally gouged with generics once the brand name drugs patent runs out. Local pharmacies are gouging with the generics, marking up drugs 1000% or more than what they buy them for. Sure, they're a bit cheaper than the brand name drugs but.....

Costco and believe it or not, Walmart seem to have taken the stance (right now anyway) of making little off of prescription drugs so they are immencly cheaper than 'local pharmacies'.

They do it for the same reason local convenience stores are the cheapest places to get milk at; it's a loss leader to get you into the store where you'll also hopefully buy some profit making items.

And in Wally World's case it gets them some all too rare favorable publicity.

[Tsyroc]

One of my co-workers is on beta serum for MS and it's base cost is a few thousand a month. I don't think her co-pay is as low as $20 but I'm pretty sure it isn't $320. Still, I wonder how long before our insurance switches over to this. This is an older treatment for MS but it's effective for her. It's unlikely that the cost is going to go down since I think it's already off patent and I don't think there's going to be a huge upswing in availabitly of the drug that will cause the price to go down.

Speaking of which. One way pharmacies gouge people is by only selling people a thirty day supply at a time. I'm not entirely sure why insurance companies tend to encourage this though.

At one time I was on HCTZ for my blood pressure. It's available as a generic. The pharmacy I went to sold me a 30 day supply at my co-pay cost. One time I was getting my prescription and one of the pharmacists told me she could sell me a bottle of a hundred tablets of HCTZ for $3 more than my co-pay but it would not be processed through my insurance company. Most of the major chain pharmacies don't like it when their pharmacists do what this one did for me because they want people to come in more often because then they walk by all the other crap in the store and might buy it.

Since that time more pharmacies and insurance companies are okay with selling 90 day supplies of medications but I think some of that was because they had to in order to compete with mail order pharmacies.

[Mr Bean]

Once again demonstrating why a for-profit Medical System is one of the worst ideas EVER. You can't NOT pay for these medications, it's buy or fucking DIE in some cases.

[Gil Hamilton]

It seems somewhat nonsensical. Put the burden of large burden of cost on people who are the least likely to be able to afford it? Of course, then you realize that it will make insurance companies large amounts of money NOW, so when the system falls apart they can get away like bandits, even as it leaves families bankrupt.

[Broomstick]

So this means if I ever need anything serious done my insurance will be next to useless? Just fucking wonderful.

It will probably be useful post-diagnosis until the next "free enrollment" period comes up, at which time you will either be canceled or your premiums will skyrocket.

[Broomstick]

It seems somewhat nonsensical. Put the burden of large burden of cost on people who are the least likely to be able to afford it? Of course, then you realize that it will make insurance companies large amounts of money NOW, so when the system falls apart they can get away like bandits, even as it leaves families bankrupt.

If the insurance industry was really so flush with money and getting "away like bandits" I would not have lost my job last November. Or did you think they were unaffected by rising costs? When Drug X is 10,000 a month and the patient only forks over $20 who do you think is paying the rest of it? And do you think hiking the co-pay up to, say, 30% or 300 a month is really making that much difference to the bottom line? The insurers can't raise premiums because they're already on the knife edge where every increase loses more customers, making it more likely they lose money by doing that rather than gain. They can either cut back on compensation to their own employees (my former employer did that by shedding employees as well as limiting raises to 1-2% for two years prior to that) or raise co-pays or both.

The insurance companies are guilty of a lot of things, but in this case I think the fault really lies more with the pharmaceutical companies than the insurers. If the drugs cost is in the 5 or 6 digit range per unit of time SOMEONE has to pay for it.

I've seen industry reports where Big Pharma is simply aghast that some of these blockbusters aren't more profitable - after all, people need these drugs in order to continue living. What escapes their notice is that those most in need are frequently least able to pay, and no one else wants to pick up the bill.

[Knife]

That shouldn't be surprising: the more people Wal-Mart and the like put out of business now, the easier it will be for them to mark up prices later.

From a consumer stand point, does it matter if the local guys fucks you and marks up prescriptions 3000% or some global company doing it? Sorry, while sprawlmart has it's problems, local guys can be greedy pricks too.

[Eulogy]

With not being able to pay for lifesaving drugs, it's a wonder that crime hasn't skyrocketed yet.

[Sea Skimmer]

In other words, the insurance companies lost even more money in the stock market and want it back any way they can

[Broomstick]

With not being able to pay for lifesaving drugs, it's a wonder that crime hasn't skyrocketed yet.

Sick crippled people generally do not make effective criminals.

[Broomstick]

In other words, the insurance companies lost even more money in the stock market and want it back any way they can

A rather simplistic view of the whole mess, particularly since many non-profit health insurance companies are not permitted to invest in the stock market (I am not bothering with the complicated, differing-by-state, rules on this sort of thing)

No, in this case it is Big Pharma driving up the prices. Health Ins is passing the cost on, instead of absorbing it, because so many more people now have so many more of these drugs to treat them.

[Kanastrous]

With not being able to pay for lifesaving drugs, it's a wonder that crime hasn't skyrocketed yet.

Sick crippled people generally do not make effective criminals.

Sick, crippled people frequently have able-bodied friends and family, who love them.

That's where we might one day start to see prescription-driven crime come from.

Don't know that I'd blame them. If someone I loved was dying for lack of meds, I might very well be willing to resort to armed robbery or theft, to keep them dosed.

[Kanastrous]

BTW SirNitram, I hope that your return to posting means that you're feeling better and doing well.

[The Duchess of Zeon]

Costco and believe it or not, Walmart seem to have taken the stance (right now anyway) of making little off of prescription drugs so they are immencly cheaper than 'local pharmacies'.

I pay $24 for 100 days worth of oestradiol at Costco at the rate of 6mg a day. That's a massively reduced fraction of the normative full price, something like one-seventh to one-tenth of what it could be. On the other hand, the spironolactone at 300mg a day for 100 days costs around $200, so I have to order it from overseas--New Zealand--where the same dose costs $109.00

I have the advantage of not having insurance. Most insurance will only authorize doses out to 30 days per visit. 100 days--an even number of pills in 100s--however, invariably results in much better economies of scale at the pharmacy and can halve the price of the drugs. But the insurance companies simply refuse, basically 100% of them, to pay for more than 30 days worth of pills at once.

[Frank Hipper]

I applaud this bold move by the captains of our insurance industry.

What better way to teach people the importance of personal responsibility for maintaining health than by seeing to it that medication is prohibitively expensive?

If you can't afford medicine, you shouldn't be getting sick.

[Darth Wong]

I've said it for years and it bears repeating: any health-care cost reduction plan that does not address Big Pharma in some way is doomed to failure.

[Adrian Laguna]

I have the advantage of not having insurance. Most insurance will only authorize doses out to 30 days per visit. 100 days--an even number of pills in 100s--however, invariably results in much better economies of scale at the pharmacy and can halve the price of the drugs. But the insurance companies simply refuse, basically 100% of them, to pay for more than 30 days worth of pills at once.

Why do they do this? You would think that they would want to take advantage of economics of scale to keep costs down.

[Enforcer Talen]

They care about their customers. They like to pass that cost onto them.

[Broomstick]

In some instances (such as narcotics) laws restrict the number of pills/quantities/etc. that can be dispensed to one patient at a time.

Many of you are looking at this whole problem in an overly simplified manner. It's not just some paper-pusher in a cubicle limiting the customers of an insurance company - there is a maddeningly complex web of laws governing medical and insurance both, and it is different for all 50 states. That's fifty different sets of rules to live by.

Rinse and repeat for how much and where insurance companies can invest money, how much they must keep in escrow to guarantee financial solvency for claims payments, and what forms of coverage are mandated.

Really, sometimes I think we'd be better off scrapping the whole mess and starting completely over.

[TimothyC]

In some instances (such as narcotics) laws restrict the number of pills/quantities/etc. that can be dispensed to one patient at a time.

I run into this all the time. My Schedule 2 Med costs me 120 a month without insurance, and that's all I can get at a time. It is nice now that I can pick up 3 scripts at a time, and leave them with the pharmacy so I only have 1 trip to the Doctor's office every 3 months, and I can call in the scripts when I need to pick them up. I know I don't have it as bad as many others here, but I'd also like for my insurance to cover the meds during the first 6 months that I'm with them.

I'm so sick of this because when I went without my meds for a while to see If I didn't need them anymore, I couldn't find a job, and without a job with insurance I couldn't afford the meds....