If you like your medication…too bad, because you probably won’t be able to keep it – at least, not without paying a fortune for it.
Prescription drug coverage – or the lack thereof – is the latest unpleasant surprise consumers will face courtesy of Obamacare.
Here’s how prescription drug coverage “works” under Obamacare.
Under the ACA, prescription drug coverage is one of 10 “essential benefits.” This means that all plans are required to cover at least one drug in every category and class in the U.S. Pharmacopeia, the official list of approved medicines. Many drugs will not be covered at all, and if a consumer needs a certain medication and pays cash for it, the cost won’t count against out-of-pocket caps. Lists of drugs that plans agree to provide some coverage for under Obamacare are called “formularies.”
Dr. Scott Gottlieb explained how this works in an article for Forbes:
Drugs on your health plan’s formulary will typically have fixed co-pays. These costs usually count toward your deductible and the out of pocket and lifetime limits on the total amount of money that your health plan can ask you to spend.
As the Wall Street Journal recently reported, these co-pays can already be substantial, pushing people quickly to their annual out-of-pocket limits — $6,350 for individuals and $12,700 for families (after which insurers pay the full tab).
People whose annual income is at or below 250% of the Federal Poverty Level will qualify for cost-sharing reductions. (That comes out to families of four earning less than about $60,000, or individuals earning less than $30,000). But people qualify for these cost-sharing subsidies only if they enroll in a higher cost, “silver” Obamacare plan.
Take, for example, the drug Copaxone for multiple sclerosis.
Someone on a bronze plan would be responsible for paying about 40% of the drug’s costs out of pocket, on average. That comes out to about $1,980 a month.
If you buy the highest cost platinum plan, the out of pocket costs drop to $792 a month. But you’re probably better off with the cheaper bronze plan anyway.
Since you’re going to hit your out of pocket cap regardless of your plan, you might as well save money on the premium (which doesn’t count against your deductible or out of pocket limits) and race to the $12,700 spending cap as quickly as your family can.
After all, the provider networks (and formularies) used by low cost “bronze” and high cost “platinum” plans are often the same. The only thing that varies between different “metal” plans is typically the co-pay structure. Why pay higher premiums just to lower your co-pays when you’re going to hit the out of pocket caps anyway.
By purchasing a costlier, gold or platinum plan, you typically can’t “buy up” to a higher benefit. What you’re really doing is just prepaying the cost sharing.
In Dr. Gottlieb’s example, the drug Copaxone was partially covered under the plan’s formulary.
But what if a medication is not covered under a plan’s formulary?
The out-of-pocket caps only apply to medications that are covered on a plan’s formulary. This means that if a patient needs a drug that is not listed in their plan’s formulary, they may have to pay for the full cost of the medication. To add insult to injury, the money they spend won’t count against their deductibles or out of pocket limits ($12,700 for a family, $6,350 for an individual).
So, how does one find out if the medications they are currently taking are covered under Obamacare plans?
It isn’t easy – in many cases, the Obamacare exchanges don’t make their formularies accessible by a simple click on the website. In some cases, the information doesn’t seem to be available at all.
The Washington Post explains:
You should request a copy of the plan’s drug formulary, or preferred-drug list, which tells you what’s covered. On the federal exchange, you may be able to find this when you click on the “details” button for a specific plan. Your co-pay or co-insurance — the amount that you’re responsible for — could vary enormously. Some plans may ask you to pay $30 for a medicine while others could charge you $1,000 for the exact same thing, so be sure to check the name of the drug and the specific dosage you need. Don’t forget to find out whether the plan covers the number of monthly doses needed. If you are taking medication for a chronic condition or something that has a high retail price, you may want to ask whether your plan maintains a separate list of specialty pharmaceuticals that are covered. You should keep in mind that the formularies are constantly in flux, and right now more than usual. For some plans on the exchange, the drug formularies are a work in progress as medical and patient advocacy groups continue to press insurers to add certain medications they think are important to cover.
In other words: good luck finding accurate information.
If a drug you take is not on your plan’s formulary, your doctor can ask the insurer to make an exception and cover it, and if that request is denied, you can use your state’s appeals process to seek coverage. If those routes don’t work, well…you’ll have to pay out-of-pocket or change medications.
Finding a good drug plan under Obamacare will prove difficult, as Dr. Gottlieb explains:
So can you find a good drug plan in Obamacare?
Generally speaking, the benchmark plans that are part of the Federal Employees Health Benefits Program have the best drug formularies, some of the large HMOs, the worst. In many cases, states benchmarked their Obamacare plans to state employee health programs, which usually fall in the middle.
But there is a lot of variability.
For example, when it comes to costly, molecularly targeted cancer drugs, some benchmark plans cover 11 drugs, but other plans cover as few as seven. I found one plan in North Carolina that doesn’t cover Actonel for osteoporosis, Aubagio for multiple sclerosis, or Xeljanz for severe rheumatoid arthritis, among other “non formulary” drugs.
In California, a state that Obamacare’s architects are holding up as the model of success, some of the major exchange players—including Anthem, Blue Shield of California and Health Net—have posted their exchange formularies on their websites. Unfortunately, they’re not easy to find — and incomplete.
As another excellent analysis finds, a lack of standardization and on-line tools makes it hard for consumers to compare between plans.
Some of the published lists do not show all of the covered drugs. For instance in California, Blue Shield’s document states that only the most commonly prescribed drugs are shown in its published formulary. Anthem’s published list is also not comprehensive.
Some analysts have tried to look across the plans, but comparisons are as hard for experts to make as they are for consumers.
If your medications are listed on a plan’s formulary, you still may have to pay dearly for them:
Researchers found that 90% of the lowest-cost bronze plans require patients to pay 40% (on average) for drugs in tiers 3 and 4, compared with 29% co-pays in current commercial plans. Most of the Obamacare silver plans also require patients to pay 40% for the highest-tier drugs.
Nancy Pelosi infamously said, “We have to pass the bill to find out what’s in it” when referring to the ACA. Apparently, that applies to the plans themselves as well as the law: consumers won’t know if their doctors, hospitals, and now – their prescription medications – will be covered on plans offered through the exchange.
Contributed by Lily Dane of The Daily Sheeple.
Lily Dane is a staff writer for The Daily Sheeple. Her goal is to help people to “Wake the Flock Up!”