Tagged Health Care Costs

KHN’s ‘What The Health?’: ‘Open The Schools, Close The Bars’


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How to safely open the nation’s schools this fall has become the latest spat in attempting to deal with the COVID-19 pandemic. President Donald Trump and Vice President Mike Pence have decried the guidelines issued by the Centers for Disease Control and Prevention as too complicated and expensive and ordered a new set. Meanwhile, tests for the virus remain difficult to get, particularly in states experiencing spikes, and getting results to patients is taking increasingly longer, making contact tracing effectively impossible.

Also this week, the Supreme Court handed the Trump administration a victory, upholding a set of regulations aimed at making it easier for employers to decline to offer birth control as part of their health insurance — even though it is generally required under the Affordable Care Act.

And Oklahoma voters narrowly approved a ballot measure to expand the Medicaid program, becoming the latest Republican-dominated state where voters opted for something that had been rejected by their elected officials.

This week’s panelists are Julie Rovner of KHN, Joanne Kenen of Politico, Mary Ellen McIntire of CQ Roll Call and Kimberly Leonard of Business Insider.

Among the takeaways from this week’s podcast:

–Although the Supreme Court upheld — at least for now — the changes made to ACA contraception coverage, Congress could rescind the policy, which might happen if Democrats gain control of the Senate next year. The rule could also be struck down by a lower court on grounds that were not reached in the current lawsuit.

–Much attention has been paid to the Trump administration’s rule on contraception coverage. But at the same time, the administration has been chipping away at other programs that provide birth control to many low-income women.

–With Trump doubling down on his support of Republican state officials’ legal challenge to the ACA, the federal health law could play a role again in the fall election. But it will likely also be linked to other health issues, including the government’s response to the coronavirus pandemic.

–The Medicaid vote in Oklahoma comes as the pandemic has created economic havoc, and it’s not clear where the state will get its share of the costs for the federal-state program that provides health coverage to low-income residents.

–Even after four months of battling COVID-19 in the U.S., people are still waiting in long lines to get a test, and results are slow because of the huge demand. Some consumer advocates hope a new stimulus package will provide more funding, but what’s really needed to help the economy and the schools is a rapid, inexpensive test that can be self-administered.

Also this week, Rovner interviews KHN’s Sarah Varney, who reported the latest KHN-NPR “Bill of the Month” installment, about an essential health worker with suspected COVID-19 who was sent to the emergency room, where she did not get a COVID test — but did get a large bill. If you have an outrageous medical bill you would like to share with us, you can do that here.

Plus, for extra credit, the panelists recommend their favorite health policy stories of the week they think you should read, too:

Julie Rovner: The New York Times’ “Sweden Has Become the World’s Cautionary Tale,” by Peter S. Goodman.

Kimberly Leonard: The Atlantic’s “The Pandemic Experts Are Not Okay,” by Ed Yong.

Joanne Kenen: The New Yorker’s “The Emotional Evolution of Coronavirus Doctors and Patients,” by Dhruv Khullar.

Mary Ellen McIntire: Science News’ “How Making a COVID-19 Vaccine Confronts Thorny Ethical Issues,” by Bethany Brookshire.


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Could Trump’s Push To Undo The ACA Cause Problems For COVID Survivors? Biden Thinks So.

The same day the Trump administration reaffirmed its support of a lawsuit that would invalidate all of the Affordable Care Act, Joe Biden sharply warned that the suit endangers millions of Americans.

The presumptive Democratic presidential nominee said the law is even more important now, more than a decade after it was enacted, as the COVID-19 epidemic sweeps the U.S. The virus has killed more than 130,000, and Biden noted that some who survive may have long-lasting health problems.

His speech in the battleground state of Pennsylvania focused on a legal challenge headed to the Supreme Court and the fallout if the court upholds a 2018 U.S. District Court decision that struck down the entire ACA, including preexisting condition protections that bar insurers from rejecting people with medical problems or charging them more.

“And perhaps most cruelly of all, if Donald Trump has his way, complications from COVID-19 could become a new preexisting condition,” Biden said.

The Trump administration has supported the challenge. A decision from the Supreme Court is expected next year, after the November presidential election.

But would a decision against the health law affect COVID-19 patients in the way Biden described?

We decided to check because it’s likely to come up a lot in the presidential electioneering. We reached out to the Biden campaign to find out the basis for his statement. A campaign spokesperson responded by reiterating the points made by the former vice president in his speech and sharing various news stories about COVID-19 and the preexisting condition coverage issue.

Several law and health policy experts noted that Biden is on fairly firm ground, though the issue — like many others in health care — is complicated.

First, A Little History

Before the ACA went into effect in 2014, insurers on the private market could reject applicants for coverage if they had any number of medical conditions, such as cancer, depression, heart disease — even high blood pressure, acne or plantar fasciitis. Consumers had to fill out forms listing their medical conditions when applying for coverage. An estimated 54 million Americans have a preexisting condition that could have led to a denial under pre-ACA rules, researchers estimate.

Also, at the time, some consumers had coverage cancelled retroactively once they fell ill with a serious or costly disease, as insurers would then comb through years of medical records looking for anything the consumer had failed to report as preexisting, even if it seemed to have little or nothing to do with the patient’s current medical concern.

Those rejections and cancellations mainly affected people who bought their own coverage, not those who got insurance through their jobs.

Job-based coverage, which is the main way most insured people get their plans, had some protections prior to the passage of the ACA. For example, the federal Health Insurance Portability and Accountability Act of 1996 said people who held health insurance continuously for at least a year could not face preexisting condition limits when they enrolled in a new employer plan, as long as they didn’t go uninsured for more than 63 days.

Those who didn’t meet that yearlong coverage requirement or went uninsured between jobs could find their medical conditions excluded for up to a year in a new group plan.

Before the ACA, insurers broadly defined preexisting conditions. Many included any condition for which a patient had received treatment, or even undiagnosed conditions for which a reasonable person should have sought treatment.

The ACA changed that. Among other things, it barred insurers from rejecting applicants based on their health, excluding coverage of preexisting medical conditions and charging sick people more than healthier ones. It also ended annual or lifetime dollar limits on coverage and said employers that offer insurance can’t make new workers wait more than 90 days for coverage to kick in.

Could COVID-19 Become A Preexisting Condition?

Biden’s comment raises the question of whether COVID-19 would be considered a preexisting condition in a future without the sweeping health law on the books.

Because the virus is so new, there’s no definitive answer on its long-term health effects.

But media reports note hospitals and physician groups are finding evidence that some recovered COVID patients suffer from lung damage, blood clots, neurological conditions, strokes or fatigue.

Researchers are now starting to follow patients to track long-term effects.

Given insurers’ history, it’s certainly reasonable to assume they would put what are now cropping up as potential COVID complications in the preexisting-condition category, said Sabrina Corlette, who studies the individual insurance market as co-director of the Center on Health Insurance Reforms at Georgetown University.

“There is a real concern that if those preexisting condition protections are overruled or taken down by the Supreme Court, people who have COVID-19 could be medically underwritten, charged more or be denied a policy,” said Corlette.

That is possible, said Joe Antos, resident scholar in health policy at the conservative American Enterprise Institute. But many of the people most likely to suffer complications from the coronavirus likely already had conditions like diabetes, asthma or heart disease that would already have put them in danger of being rejected for coverage under pre-ACA business practices, he added.

In other words, COVID-19 could simply find a place on a long list of other conditions that could disqualify consumers from obtaining insurance.

And even if the high court tossed out the ACA, insurers might choose to keep offering coverage to people with health problems, say some analysts, including Antos.

But this take triggers skepticism.

“Insurance companies have an obligation to shareholders, and that obligation is to maximize profits,” Corlette said. “They don’t do that by covering a lot of sick people when competitors are not doing it.”

The Biggest Unknown

Just how would Congress and the president react if the ACA is struck down?

Under a Biden presidency, coupled with Democrats holding the House and possibly winning the Senate, the ACA would definitely be replaced, the experts all agreed.

Under a second-term Trump administration, Republicans would face a dilemma because — even though the party has called for the law’s repeal since its enactment –— they have been unable to agree on how to replace it. Yet polls have consistently shown that parts of the law, especially the preexisting condition protections, are very popular with a wide swath of voters.

“They don’t want to come across as coming up hard against people who have health conditions,” said Antos.

Private practice attorney Christopher Condeluci, who served as tax and benefit counsel to the Senate Finance Committee when the ACA was drafted, agreed. He thinks Congress or the president would act to save the preexisting condition protections at least.

But how to do so is problematic. That provision is intricately tied with many other parts of the ACA, those aimed at getting as many healthy people to enroll as possible in order to spread costs out among the many, rather than the few.

The ACA did that partly by requiring most Americans to carry insurance coverage — the provision at the heart of the Texas lawsuit seeking to overturn the legislation. Restoring that requirement might be tricky, so the path forward for a split Congress or a second-term Trump presidency to come up with a solution quickly — or at all — if the Supreme Court tosses the entire law is a difficult one.

Our Ruling

Biden said that if Trump had his way, COVID complications could become a preexisting condition. He said this while discussing what might happen if the ACA is overturned by the Supreme Court. Though the statement can’t be definitively proven, there’s a lot of evidence backing it up.

First, some patients are showing at least short-term aftereffects of COVID-19, some of which could be costly. Some may prove long-term.

Second, insurers dislike costly medical conditions. Their business model is designed to have enough healthy enrollees to offset those with costly conditions. Before the ACA, they did that by rejecting people with medical conditions, charging them more or excluding coverage for those conditions. Some also temporarily delayed coverage for specific conditions in group plans offered by employers. Without the ACA, no federal law would prevent them from returning to these practices when selling plans on the individual market.

We rate Biden’s statement Mostly True.

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Analysis: How A COVID-19 Vaccine Could Cost Americans Dearly

Yes, of course, Americans’ health is priceless, and reining in a deadly virus that has trashed the economy would be invaluable.

But a COVID-19 vaccine will have an actual price tag. And given the prevailing business-centric model of American drug pricing, it could well be budget breaking, perhaps making it unavailable to many.

The last vaccine to quell a global viral scourge was the polio inoculation, which ended outbreaks that killed thousands and paralyzed tens of thousands each year in the United States. The March of Dimes Foundation covered the nominal drug cost for a free national vaccination program.

It came in the mid-1950s, before health insurance for outpatient care was common, before new drugs were protected by multiple patents, before medical research was regarded as a way to become rich. It was not patented because it was not considered patentable under the standards at the time.

Now we are looking for viral deliverance when drug development is one of the world’s most lucrative businesses, ownership of drug patents is disputed in endless court battles, and monopoly power often lets manufacturers set any price, no matter how extraordinary. A new cancer treatment can cost a half-million dollars, and old staples like insulin have risen manifold in price to thousands of dollars annually.

And the American government has no effective way to fight back.

Recent vaccines targeting more limited populations, such as a meningitis B vaccine for college students and the shingles vaccine for older adults, have a retail cost of $300 to $400 for a full course.

If a COVID-19 vaccine yields a price of, say, $500 a course, vaccinating the entire population would bring a company over $150 billion, almost all of it profit.

Dr. Kevin Schulman, a physician-economist at the Stanford Graduate School of Business, called that amount “staggering.” But Katherine Baicker, dean of the University of Chicago Harris School of Public Policy, said that from society’s perspective “$150 billion might not be an unreasonable sum” to pay to tame an epidemic that has left millions unemployed and cost the economy trillions.

Every other developed country has evolved schemes to set or negotiate prices, while balancing cost, efficacy and social good. The United States instead has let business calculations drive drug price tags, forcing us to accept and absorb ever higher costs. That feels particularly galling for treatments and vaccines against COVID-19, whose development and production is being subsidized and incentivized with billions in federal investment.

When AZT, the first effective drug for combating the virus that causes AIDS, was introduced in 1992, it was priced at up to $10,000 a year or about $800 a month. It was the most expensive prescription drug in history, at that time. The price was widely denounced as “inhuman.” Today that price gets you some drugs for toenail fungus.

Investors already smell big money for a COVID-19 vaccine.

The market cap of Moderna, a small Boston-area company that has partnered with the National Institutes of Health in the vaccine race, has tripled since Feb. 20, to $23 billion from $7 billion, turning its chief executive into an overnight billionaire. While Moderna’s vaccine is regarded as a strong contender, the company has never brought a successful drug to market.

Manufacturers have traditionally claimed that only the lure of windfall profits would encourage them to take the necessary risks, since drug development is expensive and there’s no way of knowing whether they’re putting their money on a horse that will finish first, or scratch.

More recently they have justified high prices by comparing them with the costs they would prevent. Expensive hepatitis C drugs, they say, avoid the need for a $1 million liver transplant. No matter that the comparison being made is to the highly inflated costs of treating disease in American hospitals.

Such logic would be disastrous if it were applied to a successful COVID vaccine. COVID-19 has shut down countless businesses, creating record-high unemployment. And the medical consequences of severe COVID-19 mean weeks of highly expensive intensive care.

“Maybe the economic value of the COVID vaccine is a trillion — and even if the expense to the company was a billion, that’s 1,000 times return on investment,” said Schulman. “No economic theory would support that.”

In 2015, the Senate Finance Committee came up with a simpler explanation for high drug prices. After reviewing 20,000 pages of company documents, it found that Gilead Sciences had what the committee’s ranking Democratic member, Ron Wyden of Oregon, called “a calculated scheme for pricing and marketing its hepatitis C drug based on one primary goal, maximizing revenue.”

In setting prices, drugmakers rarely acknowledge the considerable federal funding and research that have helped develop their products; they have not offered taxpayer-investors financial payback.

The Biomedical Advanced Research and Development Authority, a federal agency known as BARDA, is giving Moderna up to $483 million for late-stage development of its vaccine.

The basic science that has allowed the small company to move so rapidly was developed with a huge prior infusion of federal money to come up with a treatment for diseases like Zika.

Francis Collins, the head of the National Institutes of Health, has said the government has some intellectual property rights. Moderna seems to dispute that view, saying it is “not aware of any I.P. that would prevent us from commercializing” a COVID-19 vaccine.

Likewise, AstraZeneca, a top competitor, has received a BARDA promise of up to $1.2 billion for commercializing a product derived from research at the University of Oxford.

There is no simple, direct mechanism for regulators or legislators to control pricing. Our laws, in fact, favor business: Medicare is not allowed to engage in price negotiations for medicines covered by its Part D drug plan. The Food and Drug Administration, which will have to approve the manufacturer’s vaccine for use as “safe and effective,” is not allowed to consider proposed cost. The panels that recommend approval of new drugs generally have no idea how they will be priced.

“The idea that we would allow ourselves to be held hostage in an emergency is mind-boggling,” said David Mitchell, head of Patients for Affordable Drugs, an advocacy group.

That’s why a bipartisan coalition in the House recently proposed two new bills to prevent “price gouging” for “taxpayer funded COVID-19 drugs” to ensure affordable pricing.

The exact mechanisms for enacting the provisions therein — such as requiring manufacturers to reveal their development costs — remain unclear. The industry has previously protected development data as a trade secret. The bills would also require “reasonable pricing clauses” be included in agreements between drug companies and agencies funding their work. They propose waiving exclusive licenses for COVID-19 drugs, allowing competitors to sell the same products as long as they pay the patent holder royalties.

Other countries, such as Britain, take a more head-on approach: a national body does a cost-benefit analysis regarding the price at which a new drug is worth being made available to its citizens. Health authorities then use that information to negotiate with a drugmaker on price and to develop a national reimbursement plan.

We could, too, but would need to consider mechanisms outside of our current box — at least for this national emergency.

The federal government could, for example, invoke a never-before-used power called “march-in rights,” through which it can override a patent holder’s rights if it doesn’t make its medicines “available to the public on reasonable terms.” (Unfortunately, in already-signed agreements with BARDA, some drugmakers have explicitly watered down or eliminated that proviso.)

We could, alternatively, allow Medicare to negotiate drug prices — a proposal that has been raised by politicians and beaten back by industry again and again. We would then need to restrict markup for a COVID-19 vaccine for the private market. Otherwise, we’d get the kinds of results emerging from the COVID testing industry, where Medicare pays $100 for the test but some labs charge insurers over $2,000.

There is already reason to worry that our deliverance from the coronavirus will cost us plenty. BARDA paid AztraZeneca up to $1.2 billion toward development, production and delivery of its candidate vaccine, in order to secure 300 million doses in October. Britain paid the equivalent of $80 million to secure 100 million doses in September — one-fifth of what the United States government agreed to pay per dose.

Baicker, the public policy school dean, thinks public scrutiny will prevent outrageous pricing. The industry has made various pledges, trying to balance corporate citizenship against making eager investors happy: Astra Zeneca has promised 1 billion doses for low- and middle-income countries. Johnson & Johnson says it would make the COVID-19 vaccine available on a “not for profit basis” at $10 for “emergency pandemic use.”

We’ve heard such offers before. Pharmaceutical companies routinely provide coupons to cover patient copayments for expensive drugs so that we don’t squawk when they charge our insurance company tens of thousands for the medicine, driving up premiums year after year. A naloxone injector to reverse heroin overdoses is given free to some clinics, but priced at thousands for the rest.

And it won’t feel like a bargain if we get free or cheap vaccines during a pandemic but pay dearly for annual COVID-19 shots thereafter.

Drug companies deserve a reasonable profit for taking on this urgent task of creating a COVID-19 vaccine. But we deserve a return, too.

So before these invaluable vaccines hit the market, we should talk about an actual price. Otherwise, we will be stuck paying dearly for shots that the rest of the world will get for much less.

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COVID Catch-22: They Got A Big ER Bill Because Hospitals Couldn’t Test For Virus

Fresh off a Caribbean cruise in early March, John Campbell developed a cough and fever of 104 degrees. He went to his primary care physician and got a flu test, which came up negative.

Then things got strange. Campbell said the doctor then turned to him and said, “I’ve called the ER next door, and you need to go there. This is a matter of public health. They’re expecting you.”

It was March 3, and no one had an inkling yet of just how bad the COVID-19 pandemic would become in the U.S.

At the JFK Medical Center near his home in Boynton Beach, Florida, staffers met him in protective gear, then ran a battery of tests — including bloodwork, a chest X-ray and an electrocardiogram — before sending him home. But because he had not traveled to China — a leading criterion at the time for coronavirus testing — Campbell was not swabbed for the virus.

A $2,777 bill for the emergency room visit came the next month.

Now Campbell, 52, is among those who say they were wrongly billed for the costs associated with seeking a COVID-19 diagnosis.

While most insurers have promised to cover the costs of testing and related services — and Congress passed legislation in mid-March enshrining that requirement — there’s a catch: The law requires the waiver of patient cost sharing only when a test is ordered or administered.

And therein lies the problem. In the early weeks of the pandemic and through mid-April in many places, testing was often limited to those with specific symptoms or situations, likely excluding thousands of people who had milder cases of the virus or had not traveled overseas.

“They do pay for the test, but I didn’t have the test,” said Campbell, who appealed the bill to his insurer, Florida Blue. More on how that turned out later.

“These loopholes exist,” said Wendell Potter, a former insurance industry executive who is now an industry critic. “We’re just relying on these companies to act in good faith.”

Exacerbating the problem: Many of these patients were directed to go to hospital emergency departments — the most expensive place to get care — which can result in huge bills for patients-deductible insurance.

Insurers say they fully cover costs when patients are tested for the coronavirus, but what happens with enrollees who sought a test — but were not given one — is less clear.

KHN asked nine national and regional insurers for specifics about how they are handling these situations.

Results were mixed. Three — UnitedHealthcare, Kaiser Permanente and Anthem — said they do some level of automatic review of potential COVID-related claims from earlier in the pandemic, while a fourth, Quartz, said it would investigate and waive cost sharing for suspected COVID patients if the member asks for a review. Humana said it is reviewing claims made in early March, but only those showing confirmed or suspected COVID. Florida Blue, similarly, said it is manually reviewing claims, but only those involving COVID tests or diagnoses. The remaining insurers pointed to other efforts, such as routine audits that look for all sorts of errors, along with efforts to train hospitals and doctors in the proper COVID billing codes to use to ensure patients aren’t incorrectly hit with cost sharing. Those were Blue Cross Blue Shield of Michigan, CIGNA and the Health Care Services Corp., which operates Blues plans in Illinois, Montana, New Mexico, Oklahoma and Texas.

All nine said patients should reach out to them or appeal a claim if they suspect an error.

To be sure, it would be a complex effort for insurers to go back over claims from March and April, looking for patients that might qualify for a more generous interpretation of the cost waiver because they were unable to get a coronavirus test. And there’s nothing in the CARES Act passed by Congress — or subsequent guidance from regulatory agencies — about what to do in such situations.

Still, insurers could review claims, for example, by looking for patients who received chest X-rays, and diagnoses of pneumonia or high fever and cough, checking to see if any might qualify as suspected COVID cases, even if they were not given a diagnostic test, said Potter.

One thing was clear from the responses: Much of the burden falls on patients who think they’ve been wrongly billed to call that to the attention of the insurer and the hospital, urgent care center or doctor’s office where they were treated.

John Campbell developed a cough and fever of 104 degrees in early March, was directed to an ER and ultimately received a $2,777 bill for the visit. He is among those who say they were wrongly billed for the costs associated with seeking a COVID-19 diagnosis.(Courtesy of John Campbell)

Some states have broader mandates that could be read to require the waiver of cost sharing even if a COVID test was not ordered or administered, said Sabrina Corlette, a research professor and co-director of the Center on Health Insurance Reforms at Georgetown University.

But no matter where you live, she said, patients who get bills they think are incorrect should contest them. “I’ve heard a lot of comments that claims are not coded properly,” said Corlette. “Insurers and providers are on a learning curve. If you get a bill, ask for a review.”

Scarce Tests, Rampant Virus

In some places, including the state of Indiana, the city of Los Angeles and St. Louis County, Missouri, a test is now offered to anyone who seeks one. Until recently, tests were scarce and essentially rationed, even though more comprehensive testing could have helped health officials battle the epidemic.

But even in the early weeks, when Campbell and many others sought a diagnosis, insurers nationwide were promising to cover the cost of testing and related services. That was good PR and good public health: Removing cost barriers to testing means more people will seek care and thus could prevent others from being infected. Currently, the majority of insurers offering job-based or Affordable Care Act insurance say they are fully waiving copays, deductibles and other fees for testing, as long as the claims are coded correctly. (The law does not require short-term plans to waive cost sharing.) Some insurers have even promised to fully cover the cost of treatment for COVID, including hospital care.

But getting stuck with a sizable bill has become commonplace. “I only went in because I was really sick and I thought I had it,” said Rayone Moyer, 63, of La Crosse, Wisconsin, who was extra concerned because she has diabetes. “I had a hard time breathing when I was doing stuff.”

On March 27, she went to Gundersen Lutheran Medical Center, which is in her Quartz insurance network, complaining of body aches and shortness of breath. Those symptoms could be COVID-related, but could also signal other conditions. While there, she was given an array of tests, including bloodwork, a chest X-ray and a CT scan.

She was billed in May: $2,421 by the hospital and more than $350 in doctor bills.

“My insurance applied the whole thing to my deductible,” she said. “Because they refused to test me, I’ve got to pay the bill. No one said, ‘Hey, we’ll give you $3,000 worth of tests instead of the $100 COVID test,’” she said.

Quartz spokesperson Christina Ott said patients with concerns like Moyer’s should call the insurance company’s customer service number and ask for an appeals specialist. The insurer, she wrote in response to KHN’s survey of insurers, will waive cost sharing for some members who sought a diagnosis.

“During the public health emergency, if the member presented with similar symptoms as COVID, but didn’t receive a COVID-19 test and received testing for other illnesses on an outpatient basis, then cost sharing would be waived,” she wrote.

Moyer said she has filed an appeal and was notified by the insurer of a review expected in mid-July. Back in Florida, Campbell filed an appeal of his bill with Florida Blue on April 22, but didn’t hear anything until the day after a KHN reporter called the insurer about his case in June.

Then, Campbell received phone calls from Florida Blue representatives. A supervisor apologized, saying the insurer should not have billed him and that 100% of his costs would be covered.

“Basically they said, ‘We’ve changed our minds,’” said Campbell. “Because I was there so early on, and the bill was coded incorrectly.”

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2021 Health Plans Granted Leeway To Limit Consumers’ Benefit From Drug Coupons

Without medication to manage her plaque psoriasis, Jennifer Brown’s face, scalp, trunk and neck periodically become covered in painful red, flaky patches so dry they crack and bleed.

She has gotten relief from medications, but they come at a high price. For a while she was on Humira, made by AbbVie, with an average retail price of roughly $8,600 for two monthly injections. When that drug stopped working for her, Brown’s doctor switched her to a different drug. Today she is using another injectable, Skyrizi, also by AbbVie, which costs about $36,000 for two quarterly injections — nearly 40% more annually than Humira.

The pharmaceutical company offers an assistance program to help consumers like Brown pay their share of the drug, and that has helped her cover her copayments. However, she faces the possibility of higher drug costs under a federal rule finalized this spring by the Trump administration.

The rule, an annual directive that sets health plan standards for 2021, permits employers and insurers not to apply drug company copayment assistance toward enrollees’ deductibles and out-of-pocket maximums for any drug. That means only payments made by the patients themselves would factor into the calculations to reach those spending targets and could make individuals responsible for thousands of dollars in drug costs.

Advocates for consumers with chronic conditions say the rule will make it harder for patients with conditions such as cancer and multiple sclerosis who rely on very expensive drugs to afford them.

“I understand that the administration doesn’t want to encourage patients to take higher-priced drugs,” said Carl Schmid, executive director of the HIV + Hepatitis Policy Institute. “But … these are people who have HIV and other chronic conditions who take drugs that don’t have generics.”

Patient advocates had hoped the administration would allow employers and insurers to apply these restrictions only if a patient was taking a brand-name drug that had an appropriate generic alternative. In the rule that set standards for 2020, the administration initially seemed to take that approach. But, faced with criticism by employers and insurers, it said last summer that it would reconsider the position.

Drug company programs that provide copayment assistance to consumers have long been controversial. Employers and insurers say they encourage people to take expensive brand-name drugs instead of equally effective but cheaper generics.

Consumer advocates counter that many of the drugs consumers take for chronic conditions have no alternative. Research has shown that generics exist for about half of the drugs that offer copayment assistance.

Drugs to treat patients with hemophilia cost an average $275,000 annually, said Kollet Koulianos, senior director of payer relations at the National Hemophilia Foundation. There are no generic alternatives.

“We’re not talking about $5 coupons in the Sunday paper,” Koulianos said. “We’re talking about high-cost specialty drugs, where they have to take this drug month in and month out for years. [Patients] just can’t make the math work” without financial help.

The medication that Jennifer Brown, of Roanoke, Virginia, uses to treat her plaque psoriasis costs about $36,000 for two quarterly injections. The drugmaker offers an assistance program to help consumers pay their share of the expense, but Brown is concerned she could face higher out-of-pocket costs under a new federal rule. (Courtesy of Jennifer Brown)

The Business Group on Health, which represents large employers, supported the provisions in the final rule that allow employers to opt not to apply the value of drug company copayments for any drug toward their employees’ out-of-pocket spending limits, said Steve Wojcik, vice president of public policy. About a third of large employers have such programs in place, according to the organization’s annual survey.

The final rule gives employers flexibility, Wojcik said.

“If there’s not a generic alternative available, a drug coupon may make sense,” Wojcik said. “But it also begs the question: Why doesn’t the manufacturer just lower the price at the beginning rather than issue a coupon?”

The final rule allows state laws regarding “copay accumulators,” as these health plan programs are often called, to supersede the federal rule. Four states — Arizona, Illinois, Virginia and West Virginia — have passed laws that limit or prohibit their use, according to Ben Chandhok, senior director of state legislative affairs at the Arthritis Foundation. Seventeen states have considered similar bills this year, but it’s unlikely any will pass given the pressure states are under because of the coronavirus pandemic, he said.

When lawmakers next meet, “they will most likely consider budget-related bills,” Chandhok said.

Brown, 44, who works in auto insurance claims settlements, lives in Roanoke, Virginia. Her state is one of the few that require insurers to count payments made by drug companies on consumers’ behalf toward their out-of-pocket spending limits. But her company is self-insured, meaning it pays its employees’ claims directly instead of buying state-regulated insurance for that purpose. So the company isn’t bound by Virginia’s law and instead follows federal regulation.

A few years ago, her employer put a copay accumulator feature on her health insurance plan so the copayment assistance she received from the drug company for Humira no longer counted toward her deductible and out-of-pocket maximum spending limit for the year. That meant that once AbbVie’s assistance maxed out for the year, she would be on the hook for the drug’s full cost until she reached her deductible and then for cost sharing until she reached her plan’s annual out-of-pocket limit.

The insurance change made her so anxious that she had a stress-related flare-up of her psoriasis, and for the first time broke out on her legs.

“I can’t even describe to you how stressful that was,” said Brown.

Fortunately, her doctor was able to provide Brown with drug samples, saving her from paying out-of-pocket for Humira.

There is no generic alternative for Skyrizi, the drug Brown takes now. This year, she aimed to reduce the odds that she’d be responsible for high drug payments by switching to a plan with a $2,000 deductible and a $3,000 maximum out-of-pocket spending limit. It’s more expensive than her previous plan, but it reduces how much she may owe in drug copayments.

The AbbVie program will cover up to $16,000 annually in copay assistance for Skyrizi before Brown has to start paying out-of-pocket. She doesn’t expect to exceed that level, so she hopes she’s off the hook for this year.

But Brown acknowledges this problem isn’t going away, and it’s a constant source of worry.

“If I don’t have the drug, my quality of life would just not be worth living,” she said. “So I’ll just keep accumulating debt if it comes down to that.”

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