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Tuesday, December 10, 2013

No, You Can't Keep Your Drugs Either Under Obamacare

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  How will ObamaCare impact prescription drug coverage?

Published on Dec 9, 2013
Dr. Scott Gottlieb says law could bring higher costs

No, You Can't Keep Your Drugs Either Under Obamacare

EXCERPTED FROM FORBES:The President famously promised that you could keep your health plan and doctor. For many people, both of those pledges are turning out to be false. And now, you might not be able to keep your medicine, either.

There are two reasons why. The first has to do with the higher out of pocket costs patients will face. The second issue may be even more significant.

Simply put, many drugs may not be covered at all, and the costs patients incur by buying them with cash won’t count against out of pocket caps. This has repercussions for drug makers with big portfolios of specialty and primary care drugs (more on that later). But most of all, it has implications for patients.

Drugs on your health plan’s formulary will typically have fixed co-pays. These costs usually count toward your deductible and the out of pocket and lifetime limits on the total amount of money that your health plan can ask you to spend.

As the Wall Street Journal recently reported, these co-pays can already be substantial, pushing people quickly to their annual out-of-pocket limits — $6,350 for individuals and $12,700 for families (after which insurers pay the full tab).

People whose annual income is at or below 250% of the Federal Poverty Level will qualify for cost-sharing reductions. (That comes out to families of four earning less than about $60,000, or individuals earning less than $30,000). But people qualify for these cost-sharing subsidies only if they enroll in a higher cost, “silver” Obamacare plan.

Take, for example, the drug Copaxone for multiple sclerosis.

Someone on a bronze plan would be responsible for paying about 40% of the drug’s costs out of pocket, on average. That comes out to about $1,980 a month.

If you buy the highest cost platinum plan, the out of pocket costs drop to $792 a month. But you’re probably better off with the cheaper bronze plan anyway.

Since you’re going to hit your out of pocket cap regardless of your plan, you might as well save money on the premium (which doesn’t count against your deductible or out of pocket limits) and race to the $12,700 spending cap as quickly as your family can.

After all, the provider networks (and formularies) used by low cost “bronze” and high cost “platinum” plans are often the same. The only thing that varies between different “metal” plans is typically the co-pay structure. Why pay higher premiums just to lower your co-pays when you’re going to hit the out of pocket caps anyway.

By purchasing a costlier, gold or platinum plan, you typically can’t “buy up” to a higher  benefit. 

What you’re really doing is just prepaying the cost sharing.

But consider the even bigger problem lurking inside the law.

The out of pocket caps on consumer spending only apply to costs incurred on drugs that are included on a plan’s drug formulary. This is the list of medicines that the health plans have agreed to provide some coverage for.

If the drug isn’t on this formulary list, then the patient could be responsible for its full cost (with little or no co-insurance to help offset that cost). Moreover, the money they spend won’t count against their deductibles or out of pocket limits ($12,700 for a family, $6,350 for an individual).

These are the ways that Obamacare cheapens the health coverage in order to pay for all of its expensive mandates. Obamacare is a throwback to the old HMO model of the 1990s, which promised a broad package of coverage for primary care benefits like vaccines, and routine doctor visits. But to pay for these benefits, the Obamacare plans skimp on other things – principally the number of doctors you’ll have access to, and also, the number of costlier branded drugs that make it onto formularies.

Many Americans rejected these restrictive HMO model plans in the 1990s, in favor of PPO-style plans that had higher cost sharing for routine health services, but offered broader access to doctors and have bigger drug formularies. What Obamacare says, in effect, is that Americans made the wrong choice when they rejected those HMO plans in favor of PPOs. The President thinks the more comprehensive, but restrictive HMOs were the better choice after all.

In response to the drug formulary issues, and the potential for important drugs to remain completely uncovered, staff at the Centers for Medicare and Medicaid Services is arguing that patients will have the option to appeal formulary decisions — to try and compel a health plan to cover a given drug.

But this appeals process can take months. And there is no sure chance of winning.

If a drug costs tens of thousands of dollars a year, how many patients will be able to foot that bill out of pocket until they win an appeal. Or take the chance that they could lose the appeal, and be stuck with the full cost of the drug?

The biggest problem in all of this is that consumers will have a very hard time figuring out where they stand. In many cases, the health plans being offered in the Obamacare exchanges don’t make information about their drug formularies readily available. In some cases, it doesn’t seem to be published anywhere.

The government was supposed to mandate that plans made this information easily accessible. But that never happened.

The new and improved health insurance plans promised to make “medical bankruptcy” essentially a thing of the past. Your Obamacare out of pocket limit was supposed to protect consumers from large medical bills. 

Only the plans as conceived by Congress only addressed routine, low dollar claims such as preventive care. In doing so you are left exposed to uncovered, unpaid medical bills significantly higher than with current plan designs.

About that Obamacare out of pocket limit . . .
“This will reduce bankruptcies, but it won’t eliminate them. Until we know what the plans look like and how people are slotting themselves, we won’t know what the impact on bankruptcy will be. We know there will be some decrease but we don’t how much.”
MedPage Today
But the new plan designs were supposed to alleviate that issue.
For Americans not covered by Medicare or Medicaid, they will have two options: grandfathered and exchange health plans.
And what about the third option?
Non-exchange plans . . .
For exchange-sold plans, the maximum annual out-of-pocket cost is $6,350 per individual and $12,700 per family but those caps may reflect only part of the ACA story.
Note the distinction.
Exchange. Sold. Plans.
if the insurer uses a 3rd party prescription drug vendor such as Express Scripts to manage prescription drugs, the beneficiary may face two separate out of pocket expenses, one for medical costs and the other for prescription drugs.
Under such a scenario, after an individual or family pays their premiums and deductibles, they still could be left with a bill of $13,000 or $25,400, respectively.
Or even more.

Copay plans do NOT have an out of pocket maximum for prescription drugs. Drug copay’s do not count toward your major medical deductible nor out of pocket limits.

And these estimates only include in network claims. Out of network claims have separate deductibles, separate copay’s, and separate out of pocket maximums.

There is one other distinction to consider in reviewing Obamacare out of pocket maximums.
Your out of pocket limit only includes covered expenses.

If your prescription drug is not on the formulary, it is not covered, and not subject to copay’s or factored into your Obamacare out of pocket maximum.

In other words, the sky is the limit on what you will have to pay out of pocket if the drug you need is not covered under are on your own and you don't get to apply the cost of those prescriptions toward and out of pocket costs. 

Obamacare: Your guide to health insurance terms 
Affordable Care Act: Questions and Answers on Over-the-Counter Medicines and Drugs 
How to pick an Obamacare insurance plan 

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