Health Insurers Are Using Drug Coverage to Discriminate, Study Says

HIV positive? Don’t buy our plan.

That’s what some insurers are saying to those who need HIV medication, by discouraging them from selecting their plans in the federal marketplace, according to researchers from the Harvard T.H. Chan School of Public Health (HSPH).

The study found that some plans are charging $3,000 more per year for HIV medication than other plans. The researchers found that “these insurers are placing all HIV drugs in the highest cost-sharing category in their formularies [lists of the plans’ covered drugs and costs], which ends up costing people with HIV several thousand more dollars per year than those enrolled in other plans.”

The study appeared online January 28 in the New England Journal of Medicine.

“Eliminating discrimination on the basis of preexisting conditions is one of the central features of the Affordable Care Act [ACA],” said Doug Jacobs, MD/MPH candidate at the HSPH and lead author of the study, in a statement. “However, the use of formularies to increase costs and dissuade those with preexisting conditions such as HIV from enrolling in the plan threatens to at least partially undermine this goal of the ACA.”

According to the study:

Jacobs and the study’s senior author Benjamin Sommers, assistant professor of health policy and economics, analyzed what they call “adverse tiering”—in which all drugs for certain conditions are placed in the highest cost-sharing tiers—in 12 states in the federal marketplace. They compared plans in six states that had been mentioned in a complaint to the U.S. Department of Health and Human Services (HHS) about adverse tiering (Delaware, Florida, Louisiana, Michigan, South Carolina, and Utah), and in the six most populous states without insurers in the HHS complaint (Illinois, New Jersey, Ohio, Pennsylvania, Texas, and Virginia). They compared cost-sharing for a commonly prescribed class of HIV medication—nucleoside reverse-transcriptase inhibitors, or NRTIs.

The researchers found that 25% of the plans examined used discriminatory drug tiering for NRTIs. The differences in out-of-pocket HIV drug costs between adverse-tiering plans (ATPs) and other plans were stark. People in ATPs on average paid three times more for HIV medications than people in non-ATP plans, with a nearly $2,000 annual difference even for generic drugs. Even though annual premiums in the ATPs tended to be lower than other plans, the high cost of HIV drugs in the ATPs meant that, on average, a person with HIV would pay $3,000 more for treatment each year than if he or she had instead enrolled in a non-ATP plan.

“The ACA has made a major positive change for people with preexisting conditions—they can now purchase insurance without paying higher premiums or getting denied coverage,” Jacobs said. “But some insurance companies seem to be setting up formularies that continue to discriminate against people with chronic conditions, and policymakers should consider steps to prevent these discriminatory practices in the future.”

This kind of policy clearly undermines the one of the most important goals of the ACA, which forbids insurers to discriminate based on preexisting conditions. Hopefully, now that this “loophole” is exposed, legislators can take action to close it.