Consumers feeling the pinch of drug copayments
Julie Appleby at USA Today has a story in today’s edition, “Drug costs rise as economy slides”. In it, she says:
People with health insurance are having more trouble paying for prescription drugs as higher out-of-pocket costs for medications and a slowing economy strain family budgets, according to surveys and health care analysts….
“Incomes aren’t going up, but co-payments are,” says Gary Claxton of the Kaiser Family Foundation, which studies health policy.
In some cases, the patient’s share of drug costs is no longer a flat dollar amount, but a proportion that can range from 20% to 70%.
What appears to be happening is that insurers are coming full circle on how they deal with drug costs. Up until the mid-90s, many patients had insurance that had them pay a percentage of the cost of their prescription drugs (often 20%). When “managed care” became the trend (which limited people to seeing only doctors in the insurer’s network, required referrals for specialists and is most famous for health plans denying coverage for various treatments), there was a move to the “fixed copayment.” Back then, most health plans had one fixed copayment for all drugs — brand-name or generic, new or old, expensive or cheap.
Direct-to-Consumer Advertising of prescription drugs took off after the FDA loosened the rules on drug advertising in 1997. Health insurers saw the costs of the drugs taken by their members skyrocket, and sought to discourage the use of expensive newer brand-name drugs, and encourage the use of older, less expensive generic drugs. So health plans moved to the “tiered” copayment, where cheaper generics had one copayment (say $5), the “preferred” brand-name (i.e. often the one that the insurer got the best deal on from the drug company) had another (say $10), and “non-preferred” brand-names had the highest (say $20).
Over time, as drug costs went up, and as promotions to doctors and consumers led many more people to use prescription drugs on a regular basis, copayments crept up too. Gone are the days of the $5 copayment. Many people now have copayments of $10-$15 for generics, $20-$25 for preferred brand-names and $40+ for nonpreferred brand-names. Plus, more people are facing separate and much higher copayments for “specialty” drugs (i.e. drugs to treat serious illnesses like cancers).
There’s also been something of a trend towards “high deductible” health plans, which make consumers responsible for all of their medical costs until a deductible (say $1500) is met. This was supposed to make people more “responsible” about the cost of their health care but can perversely have the opposite effect, by making people delay medical treatment until it’s an emergency, when of course the treatment is far more expensive.
Medicare Part D has resulted in millions of senior citizens now paying for a percentage of the cost of their drugs, rather than fixed copayments. Which means when the cost of their drugs goes up, so do their out of pocket payments.
The end result of this is that it’s no longer just patients without insurance who can’t afford their prescription drugs — more and more people with insurance can’t afford them either. Someone with a chronic illness who takes, say, 8 or 10 drugs everyday can face hundreds of dollars a month just in copayments. And more and more health plans are putting annual maximums on what they’ll pay for prescription drugs. After you hit the maximum, you’re on your own.
Many drug companies have patient assistance programs that can provide free or discounted drugs to people who can’t afford them. But as a recent post on this blog illustrates, many of those drug company programs are closed to people who have insurance — even if they still can’t afford even the copayments on their drugs, or if their health plan doesn’t even cover the drug in question. In Jessica’s story: No help from Cephalon for cost of Provigil, a young patient with Narcolepsy describes how she couldn’t get any help from Cephalon to get the Provigil she needs. She was ineligible for their program because she had insurance.
As long as drug prices continue to rise, and drug companies convince millions of doctors to prescribe and millions of patients to take expensive, newer brand-name drugs instead of equally effective and much less expensive generic drugs, we’re going to see more and more insured patients, not to mention the uninsured, face drug bills they can’t afford.