Healthcare reform in the U.S. may include a surprising speed bump for some cancer patients, depending on where they live.
When health insurance exchanges go into effect, individuals (and at some point, employers) will be able to pick from private and public insurance plans offered in their state-specific marketplace, and some states could leave cancer patients paying large sums out-of-pocket for expensive medications.
Overall, the Affordable Care Act is a boon for cancer patients, according to Dan Mendelson, CEO and founder of Avalere Health, a strategic advisory company that has extensively researched how cancer patients are affected by health reform.
“A lot of cancer patients were historically denied insurance, but that’s now illegal.” Mendelson told HealthBiz Decoded. “Even if somebody lacks employment, they are going to be able to purchase insurance on the exchange and the early rates that are coming are really very reasonable, so that’s a positive thing.”
But depending on the state they’re in, they may have to pay radically different amounts for the same treatment, or not have access to the best treatment at all, he said.
Many of the plans put biologic and chemotherapeutic drugs on a specialty tier, as Medicare does. When patients under the plans need to access those drugs, they may be asked to pay anything from a nominal fee up to 50 percent of the actual cost of the drug, depending on state rules determining upper limits for out-of-pocket costs.
“For example, the state of New York has said the health insurance plan cannot charge more than $70 for a drug under the medical plan. That’s really great for consumers,” Mendelson said. “But some other states have said ‘you can charge 20 percent of the cost of the drug, or 50 percent’ and that is much more difficult for patients with cancer because they cannot do anything about it.”
“Even if their particular therapy is covered, what will be the patient’s out-of-pocket financial responsibility?” asks Brian Rosen, senior vice president of Government and Public Affairs for The Leukemia and Lymphoma Society (LLS). “That’s a really big problem in many, many states right now: California, Oregon, Connecticut, we’ve seen multiple states come out with expensive, out-of-pocket financial burdens placed on the patents with co-insurances that come up to 20, 30 or up to 50 percent.”
In the Covered California exchange, for example, patients will be responsible for 10-to-30 percent of specialty drugs like Imatinib, a leukemia drug that retails between $6,000 and $7,000 monthly. A 20 percent coinsurance payment would mean $1,200 out-of-pocket every month, compared to the $70 maximum in New York, according to a letter to the California exchange from LLS.
“For someone making $50,000, they have determine whether they’re going to pay their mortgage or going to get access to that therapy that’s going to potentially save their lives,” Rosen said.
Rosen predicts that a healthy patient will join a plan with a low premium in California, then will be diagnosed with non-Hodgkin lymphoma or some other type of leukemia and suddenly will face very high costs. “I suspect in the January – March timeframe of 2014, the administration and Congress are going to hear about these terrible access stories,” which will hopefully lead to more reform, he said.
For now, Rosen and the LLS are trying to educate state insurance commissioners and executive directors of exchanges.
“First of all, patients right now will need to scrutinize their options under the exchange because not all the plans are the same,” Mendelson said. “When they go to purchase insurance, there may be one design that’s better than another. They may be better off with Product A versus Product B in the exchange.”
There may be a need for standardization at the federal level, but that won’t happen in the short term, he said. Any meaningful changes are likely to be processed at the state level.
The focus now is on alerting policymakers to the inconsistencies as soon as possible, Rosen said.
The problem could easily be fixed if more states adopted rules like the one in New York, Mendelson said, but until then it’s important for cancer patients to understand their options thoroughly before enrolling in a plan.
“I do believe a consensus will build over time and it is important for cancer patients to really be engaging in these discussions right now,” Mendelson said.