Specialty Drug Out-Of-Pocket Costs Compared Among 2015 ACA Plans
This article was originally published in The Pink Sheet Daily
Executive Summary
Analysis by HealthPocket finds platinum plans offer the best coverage option for specialty drugs, even though they may charge much higher premiums.
Average annual out-of-pocket costs for five widely used specialty drugs ranged from about $1,400 to $6,380 in a sample of health plans to be offered inside and outside of state-based exchanges in 2015, according to the health care research firm HealthPocket.
Based on insurance rate filings in nine states for next year’s offering of plans under the Affordable Care Act, the researchers analyzed average out-of-pocket costs for plan members – including annual deductibles and copays or coinsurance – for Novartis AG’s cancer drug Gleevec (imatinib), Teva Pharmaceutical Industries Ltd.’s multiple sclerosis treatment Copaxone (glatiramer acetate), AbbVie Inc.’s inflammation treatment Humira (adalimumab),Gilead Sciences Inc.’s combination HIV treatment Atripla (efavirenz/emtricitabine/tenofovir) and Novo Nordisk AS’ growth hormone Norditropin.
HealthPocket’s analysis compared costs among the four types of qualified health plans, designated as bronze, silver, gold and platinum depending on the percentage of health costs the plan pays for a typical enrollee. Under ACA rules, a bronze plan will generally pay 60% of covered medical expenses, leaving the consumer responsible for 30% and at the other end of the spectrum, a platinum plan will pay 90% of covered expenses, leaving 10% to enrollees. However, platinum plans generally charge the highest monthly premiums versus the other types of plans.
Open enrollment in the plans for the 2015 plan year will begin Nov. 15.
Platinum Plans Offer Best Deal
The study found that out-of-pocket costs for the drugs studied are likely to be significantly lower in the platinum plans versus the other types of plans available next year. The average out-of-pocket cost in the platinum plans for each of the five drugs studied was about $1,400.
Among the other types of plans, the average annual out-of-pocket costs for each drug were in the range of $3,700-$4,000 for gold plans, $5,370-$5,490 for silver plans and $6,385 for bronze plans.
The cost-sharing totals were basically the same among the different drugs because they equaled or nearly equaled each type of plan’s average out-of-pocket cap. The average out-of-pocket caps were: $1,416 for platinum plans, $4,229 for gold plans, $5,745 for silver plans and $6,385 for bronze plans, the study reports.
In 2015, the out-of-pocket cap for individual medical and prescription drug benefits combined can be no higher than $6,600, according to regulations. Specialty drugs are so expensive they quickly push plan members through their plan’s maximum out-of-pocket spending limit, as is reflected in the analysis.
Platinum plans appear to offer the best coverage option for expensive specialty drugs even though they may charge much higher premiums.
For example, the analysis found a 50-year old taking Gleevec who is enrolled in a platinum plan would incur an average total annual cost of $9,700 (including $8,270 in premium payments) compared with a total cost of $11,686 (including $6,117 in premiums) if the individual was enrolled in a silver plan or a total cost of $11,400 (including $5,014 in premiums) in a bronze plan.
Those totals indicate that members in ACA plans who are taking specialty drugs will continue to face significant out-of-pocket costs in 2015, an ongoing concern among members of the biopharmaceutical industry (Also see "High Specialty Drug Copays In Exchange Plans Spark Worry Among Stakeholders" - Pink Sheet, 21 Apr, 2014.). The industry has expressed concern that high cost-sharing levels could deter patient compliance with treatment regimens.
The study does not take into account cost-sharing subsidies that are available under the ACA for low-income individuals purchasing silver plans. The subsidies, which are calculated on a sliding scale based on different income levels, can reduce cost sharing and also lower out-of-pocket spending caps.
Data analyzed for the study were gathered from Arizona, Connecticut, Indiana, Maine, Michigan, North Carolina, Rhode Island, Tennessee and Virginia. Prescription costs were estimated using CVS Pharmacy price quotes and data from the goodrx.com price comparison website. HealthPocket also operates a consumer-facing insurance comparison website called healthpocket.com.