For exchange goers who need specialty medications, navigating their options before committing to a plan can be confusing, a problem insurers need to address if they want to cultivate brand loyalty.
While figuring out costs for speciality drugs has often been complicated for patients, new benefits designs in public insurance exchange plans are making the task even more complex, according to an analysis by Avalere Health.
Among silver plans being sold on exchanges for this year, the research and consulting firm found that 17 percent use multiple specialty tiers in their formularies, designating generic, preferred and non-preferred levels for different drugs across a range of complex conditions, from arthritis to multiple sclerosis.
Avalere researchers combed through plan documents for Silver exchange plans after findng some inaccuracies on HealthCare.gov and associated data sets.
"Notably," they wrote, "HealthCare.gov reports formulary cost sharing for all plans in a four-tier structure (including only one specialty tier); however, about 35 percent of Silver plans do not use four-tier formularies. Because of this discrepancy, consumer costs appearing on HealthCare.gov may misstate actual enrollee financial responsibility."
Of the 1,000-plus exchange plans studied, 81 percent have one speciality tier, 14 percent have two speciality tiers, 3 percent have three speciality tiers, and only 2 percent have no speciality tiers. (Avalere did not include health plans where there is no cost sharing across service categories or where deductibles are equal to the out-of-pocket maximum.)
By some estimates, specialty medications account for only one percent of all U.S. prescriptions but 25 percent of national drug spending, a figure that's expected to grow.
As insurers try to control costs through tiers, prior authorization, step therapy and increased cost-sharing, more states are stepping in with regulations. Five states have enacted laws limiting copays and two -- New York and Alaska -- have expressly prohibited the use of tiered formularies for specialty medications. Another 11 states, including California, Illinois and Virginia, have legislation up for consideration that would limit copays.
"The trend toward increased reliance on specialty pharmaceuticals would not raise such an important concern if specialty drugs did not represent the most expensive segment of pharmaceuticals not only for insurers, but also for consumers through cost-sharing measures," Chad Brooker, a health policy analyst at Connecticut's insurance exchange, Access Health, wrote in Health Law and Policy Brief last year.
While speciality tiers can work as part of pharmaceutical benefits management strategies, information about what is and isn't covered and under what kind of cost-sharing needs to be more transparent and easily accessible for consumers before they purchase a plan -- to prevent HIX drug benefit horror stories.
"Consumers purchasing these plans need to understand what's in their benefit plan and be ready for substantial out-of-pocket costs if specialty products are needed," said Avalere CEO Dan Mendelson.