Many Insurers Changing Prescription Categories So Customers Pay More For Already Expensive Meds

Patients across the country who rely on drugs that are already expensive to treat complicated conditions like cancer and rheumatoid arthritis are in for an unwelcome uptick in costs for those meds, as many insurers are changing things up in order to charge customers more.

The Los Angeles Times says insurers like Anthem Blue Cross, Aetna and others are moving many prescriptions to a new category, which will require patients to absorb more of the cost of the drugs.

That means pharmacy bills rising by hundreds of dollars per month, on top of already pricey insurance premiums. For example: One man who was previously paying $80 for three HIV drugs is now paying $450 per month on a new plan from Anthem Blue Cross.

Says the L.A. Times:

Anthem, the state’s largest for-profit insurer and a unit of WellPoint Inc., adjusted its prescription drug coverage early this year. It said it shifted more medications to the most expensive tier for many of its employer plans to keep premiums more affordable.

“Because high-cost pharmaceuticals reduce the affordability of health insurance, Anthem moved some of these drugs from a co-pay tier to a cost-sharing tier,” said company spokesman Darrel Ng. “We continue to evaluate and refine the drug classifications in our four-tier plans to enhance value and affordability.”

Aetna says the company is responding to the concerns of employers who are seeing specialty drug costs rise, so they’re adding new drugs to the highest cost tiers.

Some consumer advocates worry that this will cause workers to stop taking the medications they need, which could result in costly medical care in the future. About 20 states have proposed legislation to cap out-of-the-pocket expenses for prescriptions, but of course, the insurance industry doesn’t want that to happen. Insurers claim those caps would drive up premiums across the board for all customers.

“Capping out-of-pocket costs doesn’t make healthcare less expensive. It just shifts costs into premiums,” said Charles Bacchi, executive vice president of the California Assn. of Health Plans, an industry group fighting such legislation.

Insurers forcing patients to pay more for costly specialty drugs [Los Angeles Times]

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  1. AtlantaCPA says:

    Isn’t “shifting costs into premiums” kind of the main point of insurance to begin with?

    • FatLynn says:

      I think you should read it as “shifting costs from employees to employers”.

      • AtlantaCPA says:

        I think you’re right. It’s so shady. If an employer has decided they will cover 80% of the cost (of premiums) then when premiums go up they either see 80% of that increase or reevaluate their 80% number. Playing games like this not only shifts some expenses to the employee, but to certain employees with chronic conditions. Those are the very people who are supposed to be helped most by insurance and the whole “pooling of risk/costs” idea.

        • StarKillerX says:

          Actually I’ve never seen an employer reduce the percentage, instead they simply switch to a plan with reduced coverage.

          Although most companies have dropped the “we cover X%” and instead simply point out what the employee part of the payment is so without knowing the full cost cost there is no way to know what percentage the company pays.

          • Nigerian prince looking for business partner says:

            My employer is pretty open about what the subsidy is.

            They’ll pay the equivalent of 75% of an individual premium towards any of the selected policies. It works out to be around $300/month.

    • mikesanerd says:

      My thoughts exactly. Isn’t the whole point of any kind of insurance that people who end up not needing it absorb the costs of people who do? If your expenses are determined by your own personal medication situation, then it really isn’t “insurance” insofar as it will not insure your losses when you get sick, nor will it guarantee that you can afford treatment…

    • doc-rch says:

      Insurance was developed to cover people from extreme costs (or lack of income) for a rare event (eg, death). It has never worked very well for health care, and is particularly bad for prescription drugs. Most people take prescription drugs. It is NOT a rare event. Most insurance is just a prepaying for prescriptions. Employers determine how much they are willing to prepay. These really expensive drugs are the rare events that we should be insured against. The high % copays is just a way of spreading out the pain of these expensive drugs and limit them to patients who have failed less expensive options. Unfortunately, low fixed copays encourage “overuse.”

  2. SBacklin says:

    Again…this is what we all get for having for-profit medical care and for-profit medical insurance.

    • StarKillerX says:

      Yeah because we all know the government wouldn’t do anything to inconvenience you and/or driving up your costs for anything.

      • AtlantaCPA says:

        There is another possibility – that hospitals and insurers be non-profit entities, not necessarily governments. Some hospitals are already non-profits. I’ve always thought that insurers should be too. The whole idea is “let’s pool our costs together and divvy them up between us” not “let’s pool our costs and then see how much we can get away with billing everyone over those costs to line our pockets.” Obviously you have to cover some admin costs on top of the pooling but Non-profits can do that.

        • FatLynn says:

          “Non-profit” is applied pretty liberally. In Illinois, there are some pending cases against hospitals using that term (and taking the associated tax breaks), but not operating as such.

          • AtlantaCPA says:

            I wish the plaintiffs the best of luck (and legal aid).

          • jimbo831 says:

            Definitely an issue here in Pittsburgh, PA as well. Our two largest health care companies (UPMC Hospitals/Doctors and Highmark Insurance) are both “non profit”. Neither does anything particularly useful for the community and both make tons of profit. They just save it to buy everything and continue building their monopolies instead of paying out to shareholders.

            In addition to the tax breaks they receive, as non profits, they are immune from monopoly rules. It is quite a joke and our healthcare costs are no better than areas with for profit companies. In short, I don’t trust the idea of letting companies just be non profit. They will still maximize income and just use it to do something (buy more companies, pay their leadership more, etc).

            • Nigerian prince looking for business partner says:

              When it comes down to it, for profit or non-profit, really doesn’t make much of a difference. The only difference is the tax status; otherwise, both need to bring in more revenue than they spend, and both have executives earning 7-figures.

              • jimbo831 says:

                Not true that they need to bring in more than they spend. The point of a nonprofit is that it doesn’t make a profit. It should bring in the same as it spends.

            • Jawaka says:

              Non profits have shareholders?

              There’s your problem.

      • RvLeshrac says:

        We know that it works well in other countries, most notably our neighbour to the north.

        You might notice that their lower brackets don’t pay as much in taxes, to boot, so you can raise a family on less money and not be forced to watch them die slowly from preventable and treatable illnesses.

      • nugatory says:

        my objection is that someones profit comes before my health. I don’t care who controls its, but profit should not come before peoples health.

      • Jawaka says:

        At this point I’m willing to take my chances.

    • Slade1411 says:

      I would argue the reverse – that this is what happens in an over-regulated insurance market (versus one in which you can, e.g., buy insurance across state lines). Because of government-imposed artificial scarcity, for any particular state or region, there’s one or two big insurance groups that control the market. So when they do something awful like this, informed consumers can’t take their business elsewhere.
      – Just my opinion.

      • PunditGuy says:

        Insurance across state lines wouldn’t guarantee that you could move to another insurer. My employer offers different plans by a single insurance company. That insurance company is particularly evil. My only other choice would be to go to the individual market, which is a awful lot like having no other choice at all.

        We need to get employers out of the loop entirely. Unsubsidized, the market will find some kind of equilibrium. Or, government can be the sole insurer. I’m really okay with it either way.

    • DabNabIt says:

      No, this is what happens when ignorant bureaucrats meddle in an industry about which they know nothing and couldn’t care less.

      The idea that government can create thousands of pages of regulations and not affect the industry is bureaucratic arrogance at its best.

  3. mattyb says:

    Canada FTW!

  4. incident_man says:

    Well, now, my decision to continue to get my prescriptions from Canadian pharmacies continues to be reinforced, even though I have insurance. F__k the American insurance and pharma companies!

  5. Nigerian prince looking for business partner says:

    There are two types of insurance in the world:

    1) High premiums with low deductibles/copays/etc.
    2) Low premiums with high deductibles/copays/etc.

    You can either pay for medical care on the front end through high premiums or on the back end with deductibles. By virtually every metric, you’re better off paying lower premiums and having higher deductibles, because premiums:deductibles don’t scale proportionately.

    We switched insurers back in January and our Rx benefit, as well as everything else doesn’t kick in until we spend $10,000 (it’s a HDHP). On the upside, by switching insurance, we were able to lower our premiums by close to $800/month, while our deductible only went up by $5,000. We also benefit because HSA contributions are pre-tax, while insurance premiums (non-group) are paid for with after-tax dollars.

    • trimetrov says:

      This is the beginning of the new, third option (to slowly replace the other two options):

      High premium, high co-pay, high deductible.

      • Nigerian prince looking for business partner says:

        That sounds like our old insurance –

        2012 rates: $1,500/month for a $5,000 deductible.

        Supposedly, the national average for health insurance (family PPO) just broke $20,000/year for the first time this year. Ouch.

  6. MaxH42 thinks RecordStoreToughGuy got a raw deal says:

    I hope that non-life-saving medications like ED meds and sleeping pills are already in that “cost-sharing tier”.

    I’m not saying there aren’t important reasons to take those…I’m just saying that making people pay more to stay alive but not to have a better quality of life is a dick move.

    • Nigerian prince looking for business partner says:

      Outside of Cadillac plans, coverage for ED drugs is pretty rare. It kind of sucks for guys who have to have their prostates out.

      • MrEvil says:

        Part of the reason for that though is most patients needing ED treatment either already have children or are beyond their fertile years. At which point sex is something just for fun.

        • Nigerian prince looking for business partner says:

          I think the biggest reason is that the drugs are typically expensive and coverage can be omitted without too much protest. Both my current policy (Highmark) and my previous policy (Anthem) explicitly excluded ED drugs from being covered, along with other seemingly random things like foot fungus medication.

          I’ve always thought that there should be an exception for those recovering from prostate surgery, since the ED drugs essentially return the consumer to his state prior to surgery. Kind of like how insurance wont pay for breast implants but will pay for it for a woman who had a mastectomy.

      • Dagny Taggart says:

        Not to be a jerk, but if you really wanted to have sex, wouldn’t you be willing to pay for ED medication?

    • nugatory says:

      I couldn’t agree more.

    • DJ Charlie says:

      Saw a neurosurgeon a few months ago about removing the damaged nerve cluster in back of my head. He wanted to go in and cut way more than is needed, to “make sure we get it all.”

      The drawback: Doing so would leave me deaf and blind.

      When I told him no, that I’d rather enjoy what time I have left, he replied “But it’s the QUANTITY of life that’s important, not the QUALITY!”

      Needless to say I found myself a different neurosurgeon. And I’m doing just fine, thank you very much. No balance, but I can still see and hear.

    • StarKillerX says:

      Okay, I’ll through some gas on the fire you’ve started:

      Would you include birth control in that tier as well?

      /me runs to get some popcorn. lol!

      • Nigerian prince looking for business partner says:

        With the new legislation, birth control is in a tier by itself. It’s the only medication required by law to be purchased with no-cost share. It doesn’t matter if it’s a $100/month name brand or a $5/month generic.

        • Derigiberble says:

          That’s not true. All immunizations, low dose aspirin regimens for older/at risk adults, and tobacco cessation medications are all covered with no co-pay.

      • RvLeshrac says:

        The most frequently prescribed birth-control medication has multiple on-label uses which don’t involve birth control.

        Additionally, birth control medicine has one major advantage: A lifetime of birth control meds are less expensive for an insurer than a pregnancy and child’s healthcare.

  7. DJ Charlie says:

    Reminds me of the prescription coverage I had last year.

    Every time my doctor would put me on a new medication, about a week later I’d get a letter from the insurance company saying “Effective immediately, we no longer cover [name of drug] in our prescription plans.” EVERY time.

    Soon as the renew period came up, I changed insurance companies.

    • who? says:

      You can change insurance companies? How? I have to use the horrendous plan my company provides, or else go without. I also can’t quit my job, because I’m between 40 and 65, so nobody wants to insure me.

      • DJ Charlie says:

        This is prescription-only insurance. Renew/drop is every November.

      • Nigerian prince looking for business partner says:

        You should talk to a broker. A good one should have a pretty good idea which providers will cover you at your age and with your pre-existing conditions.

        I just recently dumped the plan through work (my employer only covered $300/month towards our $1,500/month premium) and switched to a policy with Highmark. We were able to reduce our premiums by about $800/month. My wife and I are both over 40 and have pre-existing conditions.

  8. catastrophegirl chooses not to fly says:

    check with the manufacturer of the medication. i work for a manufacturer of a medication that falls into this category and we’ve been enrolling a bunch of these patients into financial assistance programs where we pick up part of the copay cost. it’s often the only way they can keep getting their medication.
    there are also not for profit organizations like Patient Access Network Foundation or National Organization for Rare Disorders that can sometimes help cover costs related to medication

    • Cor Aquilonis says:

      I, for one, am proud that we’ve managed to reduce our sickliest, poorest citizens to beggars. Progress!

    • doc-rch says:

      Just don’t be in a Medicare Part D plan…because the “coupons” that lower the copay are illegal. The reason they are illegal is because they still cost the healthplan the full price of their share. The government [ie, the provider for Medicare Part D] rightly thinks that is a rip-off that removes the incentive to promote appropriate use of these expensive products.

      • catastrophegirl chooses not to fly says:

        yeah, we have to handle medicare patients in a separate category and help them get funding from a non for profit organization. and since we cannot influence/talk to those organizations, mostly we are just giving out their contact info to medicare patients

  9. HomerSimpson says:

    Just that “invisible hand” picking your pocket and emptying your wallet again. Nuthin to see here….

    • TuxthePenguin says:

      So you are upset that the purchasers of a product/service were able to change the behavior of the seller of that product/service? The purchasers wanted a lower price and the seller accommodated them by shifting around the price structure.

      Employer-provided health insurance is typically a benefit of employer. Or it was. Its going to be the downfall of the healthcare system now that the employers and government are making deals… just remember, you are the consumer, not the customer. No one wants to let you even think of being the customer.

  10. TuxthePenguin says:

    Just remember, you are not your insurance company’s customer. You are the consumer. The customer is your employer. And the employer wanted lower premiums…

  11. rmorin says:

    If PPACA continues to be enacted expect higher drug pricing. The PPACA is an absolute joke, republicans don’t like it just because Obama signed off on it, and Democrats point to good parts (coverage till 26, can’t deny for pre-existing conditions) as if to distract from the monstrosity that it is.

    What you have is a system that literally legislates benefits to two major industries; drug manufacturers and insurance companies. It is NOT better (financially, or delivery of care) as a system than what we have now, despite having certain protections that are better than now.

    It is roughly equivalent to trading in your 2008 Honda Civic that works but has some significant problems that do need fixing, for a 1995 Chevy Beretta. The Chevy Beretta has a better sound system, but is overall less efficient and costs more to own. But BETTER SOUND SYSTEM GUYS! Neither one of these solutions is a long term option, but both options suck and should not be lauded.

    • Nigerian prince looking for business partner says:

      To be fair, those who work for large companies or the government are likely to benefit immensely from the legislation because their employers will absorb the premium increases.

      Those who work for small-to-medium companies, or are self-insured, will just have to pay for the extra benefits through higher premiums.

      • reknight says:

        “To be fair, those who work for large companies or the government are likely to benefit immensely from the legislation because their employers will absorb the premium increases.”

        HAHAHAHAHAHAHAHAHAHHAHAHAHAHAHAHHAHA!!!!!!!!!!!!!!!!!!!!

        I work for a VERY large multinational corp that the CEO is on some board or other that Pres. Obama setup about health care costs and we just took it in the shorts with our insurance this year.

        It was very much like how PPACA was “sold”… the first thing they let us know was that the premium we were paying in 2011 would be the same in 2012. Coverage… not so much.

        We went from a “OK” PPO to a 10K/Family High Deductible with HSA. Yippie! I don’t pay anymore out of my paycheck, I just get to pay more if I get sick… or oh I don’t know… have a baby.. you know… like my daughter that was born 2 weeks ago and we were already pregnant with when this was announced.

        We were luck that the VERY large corp. my wife’s works for offered other plans. We actually choose a High Deductible with HSA Plan as it seem to offer the best bang for our buck. We are able pay the premium and fund the HSA to cover the $6000 deductible for $80/month less then my employer wanted for JUST the premium.

        Or to put it another way my employer just cut my pay this year.

        So yeah… most large companies are NOT going to absorb the premium increases… to think so is just silly.

  12. sirwired says:

    There Ain’t No Such Thing As A Free Lunch.

    Yes, the state is more than welcome to pass a law capping drug costs. But the price of those drugs has to come from SOMEWHERE, and that somewhere won’t be the insurance company’s profit margin.

    • whatsfair says:

      please explain Why the Exact Same Prescription for certain med in US = $325.00 and in Canada = $72.00, and in Europe = $68.00

      the Only reason the High Prices of Med in US continue is —

      2012 Lobbying – Pharmaceuticals/Health Products $67,602,011
      2011 Lobbying – Pharmaceuticals/Health Products $240,836,544
      1998 – 2012 Lobbying — Pharmaceuticals/Health Products $2,391,621,180

      http://www.opensecrets.org/lobby/top.php?indexType=i

      $2.4 BILLION would have paid for a lot of cheaper medication for many people.

      Pfizer contributions to congress – 66% to Republicans, 32% to Democrats
      Glaxo – 69% to Republicans, 30% to Democrats

      get information about $$$$ in Politics — and VOTE for the better candidate.

  13. GirlWithGloves says:

    Research the manufacturer of your medicines to see if they have a prescription assistance program. As an example, my humira is $1800 for two monthly injections without insurance, but with copay it is $60. Abbott’s perscription program reduces that copay to $5 monthly. I found out our insurance is moving Humira to tier 4, but according to the copay assistance people, my copay will still be $5 as long as the copay amount is under $500 monthly.

    Prescription assistance programs: http://www.needymeds.org and http://www.pparx.org

  14. Radiating says:

    The decision of what your premium covers and what the benefits are should be left up to the consumer not be tweaked by the companies as things move along. What the companies did was decided to lower the amount of payout people can have and then promise to lower their payment.

    In the end I saw a zero dollar reduction in my premiums as a result. So yeah how about that value these companies were lying about? Maybe employer premiums were reduced but it’s more likley that the companies will just pocket the difference and claim that through some magic it will reduce costs, when the actual value is increased profits.

    • Nigerian prince looking for business partner says:

      In these situations, it’s pretty rare for premiums to actually go down. At renewal, instead of going up 18%, they just go up 15% instead.

    • NeverLetMeDown says:

      “Maybe employer premiums were reduced but it’s more likley that the companies will just pocket the difference”

      Yes, because corporate buyers of health insurance are idiots.

  15. HogwartsProfessor says:

    The only thing I absolutely need is thyroid medication. Without insurance it is still only $4 at my pharmacy (Dillon’s, not Walmart). I guess I’m lucky.

  16. Willow16 says:

    I recently went to pick up a prescription for zithromax (generic) for my son. When I got there, they said that my insurance did not cover that drug. I was amazed that they wouldn’t cover a generic antibiotic. I paid the $40 for the full cost of the prescription.

    • Nigerian prince looking for business partner says:

      After getting sticker shock a few times, I’ve started talking to my doctor about cost prior to writing the prescription. She actually keeps the $4-list on file. It may be a little out of date but it’s a good starting point and avoids any nasty surprises.

      • catastrophegirl chooses not to fly says:

        i keep the $4 list in my purse when i go to the vet. my dog’s meds were over $200 a month but with a little creative prescribing and me being willing to cut pills, we got it down to $91 a month. i still have to get his thyroid meds at the vet and his gallbladder meds at a compounding pharmacy but the rest comes from target. it’s not that hard to cut his enalapril into 1/4s and give him 3/4 and overprescribing his prednisone, then cutting in half, makes a $9 for 90 day prescription last half a year.
        i’m glad the vet is willing to work with me on that but i am soooo glad i have great insurance and only have a set copay…. of $50 per each everything.

    • rmorin says:

      40$ for zithromax?!?! What kind of pharmacy was this!?

  17. dush says:

    The point of modern medicine is to keep us alive longer. Now the longer we live the greater the medical costs will be. Yet we still don’t understand why medical costs over all are going higher and higher.
    We spend so much money keeping people alive who would otherwise be dead already. Not that keeping people alive is bad but let’s get real and stop complaining about it.

    • who? says:

      Why, then, is it so much more expensive to keep people alive here than in other industrialized countries with similar life expectancies?

      I wish I could find the article now, but there was an article in the Washington post 4 or 5 years ago about why are health care costs are so much higher than everyone else. Basically it was 3 things…

      1) Doctors here (especially specialists) make about twice as much as doctors in other countries
      2) Hospitals, since they’re competing with each other instead of cooperating, all have to have the latest and greatest buildings, equipment, and such, which means that hospital costs are considerably higher than in other countries.
      3) Drug companies charge more here than anywhere else in the world. There were some complicated explanations for why, but basically it was because they could get people to pay.

      • dush says:

        I’m not saying there aren’t inefficiencies or that other places don’t pay less per patient over all. But look at our goal: getting people to live longer and longer no matter the means. Yet people complain about how expensive it is getting to keep people alive beyond what their body would naturally live.
        We need a different goal: people living healthier rather than just dumping money into extending life when something goes wrong.

  18. oldwiz65 says:

    And at the same time the health insurance executives bonuses are getting huge increases. The insurance companies are there to make money for the stockholders and to pay huge bonuses to the executives. Helping people is not high on their list of priorities.

    I had to give up a couple of medications since the cost was simply too high.

  19. elephant says:

    I use one of the priciest specialty drugs and my copay is 20% – I meet my annual out of pocket max of $2,500 with my first infusion each year – and the manufacturer subsidizes my copay, so for some patients who can’t afford it that may be an option.

  20. whatsfair says:

    Insurance has less to do with prices of Medications. Can anyone please explain Why the Exact Same Prescription for certain med in US = $325.00 and in Canada = $72.00, and in Europe = $68.00 ?????

    the Only reason the High Prices of Med in US continue is —

    2012 Lobbying – Pharmaceuticals/Health Products $67,602,011
    2011 Lobbying – Pharmaceuticals/Health Products $240,836,544
    1998 – 2012 Lobbying — Pharmaceuticals/Health Products $2,391,621,180

    http://www.opensecrets.org/lobby/top.php?indexType=i

    ******* $2.4 BILLION would have paid for a lot of cheaper medication for many people.

    Pfizer contributions to congress – 66% to Republicans, 32% to Democrats
    Glaxo – 69% to Republicans, 30% to Democrats

    get information about $$$$ in Politics — and VOTE for the better candidate.

  21. whatsfair says:

    VA beneficiaries enjoy some of the best prices on prescription drugs negotiated by the federal government, other federal departments also receive significant discounts on prescription drugs through price negotiation. For example,

    CBO found that drug prices negotiated through the Federal Supply Schedule (FSS) are 53% of the Average Wholesale Price (AWP).

    Take the “For-Profit” out of health care — so we can all afford needed medications.

  22. yossi says:

    People think this is the “evil insurance” company, but most of the time, they shift drugs to the higher tier, if there are cheaper alternatives available

    EXAMPLE – I use an acne cream called benzaclin. It was a middle tier drug, so my copay was only $30. Then, they upgraded the bottle to include a special pump something the generic version does not have. The pump makes it a bit easier to dispense the cream, but its not critical. So, the insurance moved the Benzaclic to the highest tier, which I understand. Benzaclin with the pump cost around $180. The generic version, with no pump (so you have to use your finger to get the cream) costs arond $27