Insurance spat leads to less Rx coverage for some
The health reform act will require coverage of all drugs beginning in 2014, but Washington's insurance commissioner and the state's largest insurance companies are facing off over a move to eliminate drug coverage entirely under one plan.
A fight between the Washington state insurance commissioner and the state’s largest seller of individual health insurance is spotlighting problems in that increasingly troubled market. The spat arose over insurers’ efforts to curb soaring premiums by restricting or eliminating prescription drug benefits.
Experts say they haven’t yet seen similar moves by insurers in other states to axe drug coverage from policies sold in the individual market. But some predict expensive drug benefits will offer an inviting target.
Since 2009, Premera Blue Cross’s LifeWise unit has sold a high-deductible plan called Wise Essentials Rx, the only catastrophic-type plan in the state offering drug coverage. Its enrollment quickly zoomed to 45,000. But that plan and Lifewise’s standard plan covered only generic, not brand-name, prescriptions.
Earlier this year, Premera’s two main rivals, Regence BlueShield and Group Health Cooperative, filed requests to switch their standard plans for individuals from full to generic-only drug coverage. Group Health said it doesn’t favor a generic-only benefit but feared its plan otherwise would get swamped with sicker enrollees who couldn’t get brand-name drugs in other plans. All three insurers have reported losing money in the individual market.
Those requests prompted Insurance Commissioner Mike Kreidler to issue an emergency rule in February barring generic-only coverage. He said patients with multiple sclerosis, some types of cancer, AIDS, rheumatoid arthritis and certain forms of mental illness can’t necessarily be treated effectively with generics. The insurers’ moves, he warned, would leave most Washingtonians in the individual market without adequate drug coverage.
Average annual prescription drug claims per health plan member nationally totaled about $800 in 2010, according to IMS Health, a consulting company. Costs are far higher for people with serious chronic conditions. Annual brand-name drug costs for multiple sclerosis patients, for example, can exceed $50,000.
In response to Kreidler’s rule, Regence and Group Health withdrew their bids to switch to generic-only coverage.
Premera reacted differently. In April, it told LifeWise members that it planned to eliminate all drug coverage in the catastrophic plan, effective Aug. 1.
Kreidler spokeswoman Stephanie Marquis said Premera’s elimination of drug benefits was part of its effort to “get rid of high-cost patients.”
But Premera spokesman Eric Earling denied that. He explained that adding full drug coverage to the LifeWise catastrophic plan would hike monthly premiums by hundreds of dollars, making it unaffordable for many. Adding brand-name coverage to the standard LifeWise plan will boost premiums by 7.2 percent. “Customers are very price sensitive, and the catastrophic plan hits a good sweet spot,” he said.
After Aug. 1, Earling said, Lifewise catastrophic plan members who get sick and need drug coverage can apply for a standard Lifewise plan with drug coverage. If they don’t pass the medical screening, they can seek coverage in the state high-risk pool, though that has very high premiums.
Some Lifewise members have complained about Kreidler’s rule, saying they were happy to have a relatively affordable plan with at least some drug coverage. “The last thing anyone in state government should do is limit access to health care and consumer choice,” Republican State Sen. Linda Evans Parlette, a pharmacist, recently wrote.
But others supported the commissioner’s move. Patrick Nelson, a LifeWise member and insurance agent who received notice LifeWise was terminating drug coverage after he was diagnosed with metastatic lung cancer, told the Seattle Times that Kreidler was “just trying to referee some fairness” into health insurance.
Starting in 2014 when the federal Affordable Care Act takes full effect, all health plans will have to provide full drug benefits including brand-name products.
This story first appeared on Kaiser Health News, an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.
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Comments:
Posted Tue, Jul 3, 6:59 a.m. Inappropriate
"Drug maker Glaxo Smith Kline will pay $3 billion in fines - the largest heathcare fraud settlement in U.S. history - for criminal and civil violations involving 10 drugs that are taken by millions of people."
Hopefully the commissioner keeps his focus on patient issues rather than worrying about drug company profits. This is why the industry needs a great deal more government regulation.
Posted Wed, Jul 4, 10:49 p.m. Inappropriate
Just what does SmithGlaxoKline's penalty have to do with the Washington State Insurance Commissioner?
Posted Sun, Jul 8, 7:52 a.m. Inappropriate
The article sites issues of cost, efficacy and availability of drugs for consumers. While the efforts of state bureaucrats and insurance companies and doctors are certainly relevant in dealing with what the article describes as an “increasingly troubled market,” so too is the corporate behavior of the pharmaceutical industry. The article in the NY Daily News didn’t say that Glaxo Smith Kline allegedly or possibly did this…it said that they did it and were criminally charged with it and were found guilty of it and are being penalized for it to the tune of 3 Billion dollars. Then there are the corrosive effects of bribery among the networks of physicians. My comment about the commissioner supporting the patient side of the issue is based on my belief that the health industry can clearly take care of itself.
Posted Tue, Jul 3, 7:22 a.m. Inappropriate
“The last thing anyone in state government should do is limit access to health care and consumer choice,” Republican State Sen. Linda Evans Parlette, a pharmacist, recently wrote.
Funny - I seem to know a lot of Republican policymakers who are eager to have the state "limit access to health care and consumer choice" when it comes to reproductive health, including family planning services and birth control.
Posted Tue, Jul 3, 9:06 a.m. Inappropriate
Are people really so stupid that they need the government to tell them how to plan a family? And are lawmakers really limiting their access to birth control by asking them to foot the roughly $10/month cost of birth control pills? If this brave new world of universal health care insurance is going to have a chance of working, people are going to have to take responsibility for some of their own expenses. Otherwise it will be impossible to raise taxes high enough to cover everything. History has shown that when the government starts consuming more than about 20% of GDP, people start finding very inventive ways to avoid paying taxes.
Posted Tue, Jul 3, 8 a.m. Inappropriate
What are the 10 generic versions of the 10 Glaxo Smith Kline drugs that got them into so much legal trouble and are the generic drug suppliers being similarly charged for criminal and civil penalties? Are there even generic options for the GSK drugs? And, who is the national insurance commissioner? We have 50 state insurance commissioners but I dare say that Kathleen Sebelius is not constitutionally sanctioned to interfere in any state insurance manners so Mike Kreidler must have the final say regardless of the now court approved 'Affordable Health Care Act'.
Posted Tue, Jul 3, 9:27 a.m. Inappropriate
From reading this article it sounds like some insurance companies at their hearts want to kill their customers rather than continuing to take their money. If they discontinue drug coverage, some people WILL surely die. There are some conditions for which there are no generics, ie, insulin-dependent diabetes. Insulin is no longer generic so each vial--long-acting and short-acting--costs somewhere around $90 plus. And depending on how much a person uses, that could cost at least $300+ per month. Add in syringes/insulin pens and the blood-sugar testing supplies...well, you get the point. I was just thinking too about those folks who can't eat;normally and get their nutrition through some form of liquid formulation; they will die without provision of basic nutrition. And as the author says, what about the other folks for whom there ARE no generic forms of their medications? What about them? The folks whose life-saving medications cost thousands of dollars per month? Even though billing departments and other white-collar medically-related jobs create employment, the US still needs single-payer plans with, I hope, fewer bean-counters to block access to needed medical care and medications. (And study the weak points of such countries as Canada, the UK, and others to avoid some equivalent bureaucratic logjams.)
Posted Tue, Jul 3, 9:36 a.m. Inappropriate
Here's an important paragraph that was cut for space in the original version posted on Kaiser Health News, which Crosscut readers may find interesting:
After Aug. 1, Earling said, Lifewise catastrophic plan members who get sick and need drug coverage can apply for a standard Lifewise plan with drug coverage. If they don’t pass the medical screening, they can seek coverage in the state high-risk pool, though that has very high premiums.
Posted Tue, Jul 3, 11:59 a.m. Inappropriate
http://www.nydailynews.com/life-style/health/glaxosmithkline-pay-3-billion-fines-largest-health-care-fraud-settlement-u-s-history-article-1.1106795
Posted Mon, Jul 9, 8:31 p.m. Inappropriate
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