SHELBY LIVINGSTON February 19, 2020
New York-based Oscar Health is the latest
insurer to cap some plan members' out-of-pocket costs for life-saving insulin
and other medications, a move several insurance companies have made in the last
year amid pressure to reduce prescription drug costs.
Oscar announced Wednesday that its individual
insurance plan members will now pay $3 for a month's supply of 100 commonly
used drugs. In addition to insulin, a high-cost drug is used to treat Type 1
diabetes, the list includes drugs to treat Type 2 diabetes, migraines, nausea,
allergies and high blood pressure, among other medical conditions.
Lowering patients' copays makes it more likely
they will take their medications, which means fewer costly visits to the doctor's
office and emergency department, Oscar said in a blog post explaining its
motivation.
"Solving this problem is good for business,
but making sure people have access to medication at a reasonable price isn't a
matter of economics, it's a matter of ethics," Oscar CEO Mario Schlosser
said.
Other health insurers and pharmacy benefit
managers have taken similar steps to help patients afford their medications,
particularly insulin. The rising cost of insulin has come under scrutiny from policymakers, who have grilled drug manufacturers over their list prices and
introduced legislation to reduce the cost of the essential drug. Some states,
including Colorado and most recently, Illinois, have enacted laws capping insulin copayments for
patients, as well. Other states are mulling such legislation.
Capping co-payments for insulin and other
expensive medications is helpful to the limited number of patients covered by
those participating insurers and employers. But copay caps do not address the
underlying price of the drug and offer no help to patients who are covered by
other health plans or who are uninsured.
"It doesn't bring down high list prices,
which are paid by people without insurance and those who are in the deductible
phase of their health plan and are not in a state or health plan that has
enacted a cap on monthly out-of-pocket spending," said Jeannie Fuglesten
Biniek, a senior researcher at the Health Care Cost Institute.
"Additionally, it does nothing to improve the opacity of drug pricing or
increase competition in the insulin market."
Insurers' programs reducing the cost of insulin
and other drugs typically affect only a narrow slice of their membership. In
Oscar's case, the $3 drug formulary will benefit about half of the insurer's
420,000 members with individual coverage. It won't be available to members in
New York, New Jersey or California because of state regulations, a company
spokeswoman explained, and it won't affect patients enrolled in individual
catastrophic plans, Medicare or small business plans.
The much larger Cigna and CVS Health also
introduced programs to cap or eliminate copayments for diabetes medications,
but in both cases patients will benefit only if their employers opt in. Cigna,
along with its pharmacy benefit manager Express Scripts, this year allows
employers the option to offer members a 30-day supply of insulin for $25, which is about 40%
less than what most Cigna members paid previously. The discount could affect up
to 700,000 people, a company spokeswoman said at the time of the announcement.
CVS Health, owner of insurer Aetna, plans to
eliminate out-of-pocket costs for all prescription diabetes medications for
members whose pharmacy benefits are managed by the company's PBM, starting in
2021. A CVS spokesman did not say how many patients would be affected, as the
company is still in active discussions with clients.
Minnetonka, Minn.-based not-for-profit insurer
Medica capped a month's worth of insulin at a $25 copayment for 7,500 fully
insured individual and employer group members in Minnesota, North Dakota, South
Dakota and Wisconsin.
Meanwhile, in the absence of any federal relief,
states have stepped up to protect patients from high drug prices. Starting Jan.
1, Colorado became the first state to cap commercially insured patients' copays
for insulin at $100 per month regardless of how much they need. Insurers must
absorb the rest of the cost. An Illinois bill signed into law in January limits
insulin copays at $100 per month for people covered by commercial health plans.
Bills being debated in California and Minnesota would implement similar copay
caps.
According to the Health Care Cost Institute, the cost to manage
Type 1 diabetes, which affects more than 1.2 million people, rose from $12,467
per person in 2012 to $18,494 in 2016. Spending on insulin drove that increase.
Average annual out-of-pocket spending for insulin grew from $2,864 to $5,705
per person over that period, according to HCCI.
Unlike the majority of patients with Type 2
diabetes who can improve the effects of the disease and lessen their dependence
on insulin through healthier diet and exercise, Type 1 patients do not make
insulin and require several doses a day.
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