Drug Coverage Transparency Lacking in Insurance Marketplaces

Roxanne Nelson, BSN, RN

December 01, 2015

Cancer patients who obtain their healthcare coverage in the insurance marketplaces that were created by the Affordable Care Act (ACA) may find it difficult to figure out which of their drugs are covered by the plan and at what price, according to a new analysis by the American Cancer Society Cancer Action Network (ACS CAN).

In a 2014 report, the ACS CAN found that the transparency of coverage and cost-sharing requirements were insufficient and failed to allow cancer patients to choose the best plan for their needs. In a new, updated analysis, they report that although transparency has improved somewhat since last year, formidable barriers remain for cancer patients.

Coverage of newer oral chemotherapy medications, for example, continues to be limited in some states. Another barrier is that coverage for intravenous drugs remains unclear in most plans.

The investigators also found that the cost-sharing structures presented in plan formularies did not match those presented on marketplace websites almost half of the time, and plans continued to put most or all oral chemotherapy medications on the highest cost-sharing tier.

In addition, nearly half of plans placed a generic oral chemotherapy drug on the highest cost-sharing tier, which may constitute a discriminatory cost-sharing design, the report notes.

"This is still early in the life of the marketplace and exchanges, and each year we are finding that it is getting a little bit better," said Kirsten Sloan, senior director of policy for the ACS CAN.

"We did this same study last year and found that transparency was really bad," she told Medscape Medical News. "But we have seen improvements this year, which we think is a positive step. So we look at this effort as a way of examining what is happening in the marketplace, what challenges people are facing, and how can we suggest solutions to them."

Significant Gaps and Broken Links

The ACA requires that states or the US Department of Health and Human Resources (HHS) establish marketplaces that will allow the public to easily compare different healthcare plans. It also requires coverage of 10 essential healthcare benefits, including prescription drugs, and to categorize plans into "metal" tiers (bronze, silver, gold, and platinum) by actuarial value.

In 2014, the ACS CAN authors found that there were significant gaps in the transparency of prescription drug coverage in the insurance marketplaces or exchanges, as well as high cost sharing for cancer drugs. Because there were concerns about possible discrimination, as well as significant variation in prescription drug coverage, they decided to update the report and analyze transparency gaps, coverage, and cost of cancer drugs in the 2015 marketplace.

For the updated report, they examined prescription drug formularies for all "silver" plans in six states: California, Florida, Illinois, North Carolina, Texas, and Washington. Taken together, these six states accounted for almost half (46%) of enrollees in the marketplace as of June 30, 2015.

Using formulary links provided by the marketplaces, data were collected on transparency, coverage, and cost sharing for 22 cancer drugs from 66 silver plan formularies in these states. Overall, for 20 of the 22 drugs, these factors were the same as in the 2014 analysis.

All marketplaces provided links to prescription drug formularies, but not all were directly available on the plan comparison website. Among the links provided in all six states, 58% went directly to a prescription drug formulary. In addition, 7.6% of links were broken or blank; these were unevenly spread across states. California, Florida, and North Carolina had no broken or missing links. In Illinois, 9% of the links were broken or missing; in Texas, 11% were broken or missing, and in Washington, 20% were.

"One of the challenges is when patients want to do an 'apples to apples' comparison about the drugs that they are taking," Sloan explained. "Some plans would link directly to the formulary, but for others, it can be convoluted and involve a search.

"We think that HHS and state marketplaces can require insurers to provide those direct links," she said. "What the consumer sees on the website should be the same as their summary of benefits."

Virtually all of the formularies investigated were searchable, but nearly half (47%) had cost-sharing tiers that did not match the cost-sharing information provided on the marketplace website.

High Tiers and Coinsurance

Drug coverage was somewhat uneven. Of 18 oral chemotherapy drugs, 15 were covered by more than 85% of formularies, but three ― etoposide (multiple brands), afatinib (Gilotrif, Boehringer Ingelheim Pharmaceuticals, Inc), and trametinib (Mekinist, GlaxoSmithKline) were covered by significantly fewer plans. Afatinib had the lowest coverage rate of all the oral chemotherapy drugs; it was covered by only 59% of plans. There was significant variation by state in coverage of these three drugs, ranging from 30% of formularies for afatinib in Washington to 100% of formularies for etoposide in North Carolina.

As was the case in 2014, coverage for intravenous drugs was far less clear. Coverage ranged from 71% of all formularies for rituximab (Rituxan, Genentech, Inc) to 35% for bevacizumab (Avastin, Genentech, Inc). In general, most formularies did not systematically list physician-administered IV drugs. In addition, these drugs were often covered under the healthcare plan's medical benefits, rather than under the pharmacy benefits.

Most cancer drugs were placed on the highest cost-sharing tier, often with significant coinsurance requirements. Of the 18 oral cancer drugs, 17 were placed on the highest cost-sharing tier by more than 80% of formularies. Even etoposide, which is available as an oral generic, was placed on the highest cost-sharing tier in 47% of formularies. Placement on cost-sharing tiers was more variable for the intravenous drugs, primarily because few plans listed these drugs in formularies. Several indicated that they were covered under the medical benefit.

"We found that on Healthcare.gov, they only show four tiers, while in some plans, there are five tiers or more," Sloan pointed out. "We want to make sure that the consumer can see every tier, once they go into the actual plan."

In addition, most of the plans in all states (between 73% and 100%) use coinsurance on the highest cost-sharing tier. This means that cancer patients are required to pay a percentage of the drug cost rather than a flat copayment. For those shopping for insurance, coinsurance is not transparent, because no information on the negotiated drug price is available.

"This is another recommendation that is really important ― to standardize cost sharing away from coinsurance and back to copay," said Sloan. "You know exactly what you are going to pay in advance when you have a set copay."

Coinsurance can end up being very costly for the patient. For example, even after the deductible is met, a plan that has a 30% coinsurance policy on a cancer drug that costs $5000 per month would require the patient to spend $1500 out of pocket for each refill until the plan out-of-pocket maximum is reached.

"The secondary problem with coinsurance is that plans do not include information about how much the drug costs, and so the patient really has no idea what they will be paying for their prescription drug," she added.

The concept of the marketplace is still new, and Sloan emphasized that they are hoping to be able to conduct this type of analysis every year. "We would like to nip the problems in the bud and identify the best practices," she said.

"But we are seeing more information made available," she reiterated, "and we trying to make sure that these recommendations are achievable."

Policy Recommendations

On the basis of these findings, the ACS CAN has strongly recommended that states and the HHS make policy changes that would ensure adequate, timely, and more affordable access to cancer drugs. They recommend the following:

  • Discriminatory tiering: The HHS and individual states need to monitor prescription drug benefits closely for any evidence of discrimination against patients with "high-cost" conditions.

  • Copays, not coinsurance: The HHS and the states should encourage or require the elimination of the use of coinsurance and should use copayments instead. Coinsurance requirements are not transparent and prevent patients from adequately comparing plans.

  • Direct links to formularies: The HHS and state-based marketplaces should require insurers to provide direct links to searchable prescription drug formularies for each qualified healthcare plan.

  • Cost-sharing transparency: All drugs that are listed in formularies should be clearly labeled with a cost-sharing tier that matches those displayed on the marketplace and in the summary of benefits and coverage.

  • Complete tiering information on marketplaces and in the summary of benefits and coverage: The comparative information on healthcare.gov and state-based marketplaces, as well as the standard summary of benefits and coverage forms used nationwide, needs to be expanded to include cost-sharing information for plans with five or more tiers in their prescription drug benefit.

  • Standardized cost sharing: The states and the HHS should consider standardizing cost sharing to improve transparency and to make it difficult to design plans that discourage enrollment by high-cost consumers.

  • Exceptions process: The HHS and the states need to strengthen and enforce the exceptions policy that allows enrollees access to drugs that are not covered when those drugs are medically necessary.

  • Coverage limits: Quantity limits should be clearly described in formulary documents and should be consistent with clinically appropriate use.

  • Consumer tools: Marketplaces should develop tools that allow consumers to search for plans that cover their prescription drugs.

ACS CAN Examination of Cancer Drug Coverage and Transparency in the Health Insurance Marketplaces. Published online November 18, 2015. Full text

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