How health insurance companies still cheat customers under Obamacare

One of the things that the Affordable Care Act (aka ACA, aka Obamacare) was meant to do was make sure that people with pre-existing medical problems could get health insurance.

And that their insurance was affordable. 

But that may not be the case with some insurance companies.

What these insurance companies seem to be doing is targeting prospective patients who have medical illnesses that require a lot of treatment and placing obstacles in their way to getting insured with the offending companies.

These are patients who may require expensive medications, very frequent doctor visits, costly therapies and other treatments that the insurance company is loathe to pay for.  And these discriminatory actions are occurring nationwide, and to such an extent that a large number (~300) of groups (consumer, patient advocacy, medical support and others) have signed and directed a letter to Sylvia Burwell, the Secretary of the Department of Health and Human services to ask her to investigate and redress the situation.

The health insurance companies seem to be using one, or more, of the following approaches to blocking undesirable potential customers:

1.  Not putting expensive medications on their formularies, or charging prohibitively expensive copays (formularies are lists of the drugs that the health insurance company has agreed to pay for, but a copay may be required.)

Insurance companies negotiate with pharmacies and set the prices that they will pay for a specific amount and dosage of a given medication.  If you had to pay out-of-pocket for a specific prescribed blood pressure medication the cost might be $120 for a month’s supply.  The insurance company might agree to pay the pharmacy $9.97 and you pay a copay of $20 for that same antihypertensive medication on formulary.

However, some drugs are much more expensive than $120 for a 30 day supply. John has written before about his asthma drugs, Advair or Symbicort, which can run from $200 to $500 per month, depending on the dose.

Even more expensive is the injectable anticoagulant enoxaparin cost about $2800 per month a few years ago.  And some chemotherapy drugs are hugely expensive, as is one of the newer medications to treat hepatitis C, Sovaldi.  Sovaldi costs about $85,000 for the supply for the full treatment period.  Drugs to treat multiple sclerosis can also be very expensive.  As are many antiretroviral drugs used to treat HIV/AIDS.

Some patients may be on these high-priced drugs for years or a lifetime.  So how does an insurance company that wants to spend as little as possible deal with this (and manage to allow those highly expensive patient groups to go elsewhere)?  They’ve tried a number of options.

First, they can keep the drug off formulary.  That means that they don’t cover the drug at all, and the patient must pay full price out of pocket for each refill.  You don’t have $2,800 per month to pay for just one of your medications?  And a similar medication (if available) hasn’t worked for you?  Too bad.

Or the insurance company can put the medication on formulary, but then require a huge copay.  Some insurances might require that you pay 30% to 50% of the total cost of the medication.  So now you don’t need to pay $2,00 per month for that single medication.  Now you only have to pay about $1,400 per month.

For many people stuck in this situation the choice might be between buying the medication or paying the rent. So those who have diseases that require expensive medications will opt to not select those insurance plans that make them pay such a high cost.  That is, if they thought to look at the insurance company’s formulary and checked what the  copays might be before signing up for that particular plan.  If they didn’t, they may be stuck in this kind of a predicament until that can get out of the plan and into one that is more suitable.  Until that happens, they may not be able to get their medication(s).

Even for those who did check formularies and copays, there is more bad news.  Not only can insurance companies change the prescription copay rates after you sign up for the plan (i.e., your copay formerly was $20, now it is $50), they can also drop medications from the formulary at any time (as long as they continue to meet individual state regulations.)  So that lifesaving medication that you were covered for just last month, is now going to cost you full price.

2.  Another way that insurance companies can try to decrease costs to those expensive patient groups is to limit access to specialists.

Multiple sclerosis patients often see neurologists for their care.  Neurologists get reimbursed at a higher rate than primary care physicians.  The insurance company may just have a few neurologists “in network (meaning, they’re the only doctors the insurance company will cover, or you’re required to pay an absurdly high co-pay if you see someone not “in network”).

So the patient may have to wait a inordinate amount of time to get an appointment.  Or he may not get a neurologist with whom he feels comfortable.  So that high-cost multiple sclerosis patient will probably leave the plan to find a more expensive plan with a larger selection of neurologists.

One insurance company that I’m familiar with operates in a county that has just under 1,000,000 people.  This health insurance company has about 23% of the market, or roughly 250,000 patients.  For those quarter million patients they have 8 psychiatrists, 1 child psychiatrist, 0 pulmonologists that are currently accepting patients, 0 dermatologists and very limited numbers of other many specialists (line ophthalmologists.)  So if your doctor wants you to see a pulmonologist, he has to call and demand that the insurance company send you to an out of network pulmonologist.  He then has to document your need to see this specialist.  There follows a series of phone calls, data entry, faxes, conferences, etc. that can easily take a month, before the insurance company may grant you a single visit with a pulmonologist.  That is if you can find a pulmonologist who is willing to accept the low reimbursement rate that the insurance company will pay.  If you do successfully find one and you need to be seen by him again, the whole process starts over.  So people with this insurance who need to see dermatologists, psychiatrists, pulmonologists and other specialists will probably look for another insurance carrier.  Thus, the insurance company steers high cost patients away from itself in this way, too.

Again, as with the medication predicament discussed above, the insurance companies can drop doctors from their networks after their contracts expire, and may or may not replace them.  So even patients who have checked on providers before signing on with an insurance company may find themselves in a jam at a later date if the company drops the doctors they need.

What sometimes also happens is that the insurance companies may not update their lists of in-network physicians frequently.  So a prospective patient looks online and sees that yes, his HIV specialist, Dr. Brown, is in network.  He joins the plan and then finds out that Dr. Brown quit that plan several months previously — sorry, the Web site wasn’t updated yet.  Now the patient is trapped again and stuck, unable to see his HIV doctor unless he pays cash.

The insurance companies say that they are not trying to exclude certain patient groups from getting their insurance policies.  They say that if a drug isn’t on formulary, or the copay is too high, the patient may be able to upgrade to a gold or platinum plan where the medication is covered.  Of course, this upgrade might be so expensive (on the order of several thousand dollars per year) that the patient couldn’t afford the higher monthly rates, making this a no-win option for many.  And even with the “upgrade,” you might go from paying $1,400 per month to paying $1,400 per year for your medication, which is certainly an improvement, but still awfully expensive for a lot of people (especially if you’re on multiple medications for multiple conditions). The insurance companies maintain that this is just good business from a cost containment standpoint they need to control outlay to function optimally.

Secretary Burwell is looking at the letter and will make a formal reply.

In the meantime, what can you do to protect yourself if you’re thinking of switching, or getting health insurance?  Right now the options are limited since insurers can change formulary drugs, physicians, hospitals, etc. virtually at any time.  But a few things that may help, at least in the short-term.

If the insurance company’s website is not easy to navigate and doesn’t explain things clearly, ask to speak to someone in customer service.  Get that person’s name and write it down along with the date and time of the call.  Take notes.

Have the agent explain what the copays for medications and doctor’s visits are.   Ask him to give you the URL for the formulary  See if your medications are listed on the formulary.  (NOTE: Formularies can vary based on the particular plan that you select.  Not all patients with XYZ Health Insurance company will have access to all of the same covered drugs.  Make sure that all of your medications are available in the formulary for your plan.) If there is a copay, find out how much it is currently for each medication that you need. Ten dollars, twenty dollars or thirty percent?   Add the copays up to see what your monthly outlay will be.  Find out which pharmacies you can use.

(John tells the story of calling Carefirst Blue Cross Blue Shield in DC repeatedly, trying to find out what the copay was, under their various ACA plans, for his allergy shots. No one could tell him. Though one woman helpfully suggested that he sign up for the plan anyway, then submit his bill, and that way he’d find out for sure what his copay was.)

Ask how to access the list of physicians who are in network.  Go there and check that all of your physicians are participating.  Browse the list of specialists, hospitals, imaging centers, labs, etc. that accept your coverage.  If you don’t see a reasonable selection, you might want to try some other insurance plan.  Remember, you may not need a rheumatologist right now, but if you do in the future, are there any available in your prospective plan?  Don’t stop there.  Call the physicians’ offices and verify that they are still taking your particular plan.   Ask if they have any plans to drop your insurance company in the future.

If you find that you are stuck with an insurance company that has dropped one of your needed medications, has given you inaccurate information, has a difficult to navigate/confusing website or some other major problem, start off with the insurance company.  See if they can do something to correct the issue or otherwise help you.  If that doesn’t work, you can get in touch with your state’s insurance commissioner and see if you can file a complaint there.  Or you may want to contact your states health insurance exchange and see if they have any suggestions.  If you find can’t afford a necessary medication through your insurance company, look at the big box pharmacies’ $4 list and see if your medication is available there.  If not, try contacting the drug manufacturer.  Almost all of them have patient assistance programs that can sometimes help with getting free or lower-cost drugs for some people.

Even if you’re not looking to get or change health insurance it might be a good idea just to take a look at your insurance’s website and see if there have been any changes.  Especially if you see a specialist only rarely.  For example, if you only see an ophthalmologist once a year.  In the intervening months since your last visit the insurance company may have dropped him or vice versa.

Mark Thoma, MD, is a physician who did his residency in internal medicine. Mark has a long history of social activism, and was an early technogeek, and science junkie, after evolving through his nerd phase. Favorite quote: “The most exciting phrase to hear in science... is not 'Eureka!' (I found it!) but 'That's funny.'” - Isaac Asimov

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