Monday, December 9, 2013

No, You Can't Keep Your Drugs Either Under Obamacare

If you like your medicines, you may not be able to keep them under Obamacare. ...

Simply put, many drugs may not be covered at all, and the costs patients incur by buying them with cash wont count against out of pocket caps. ...

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. ...

But consider the even bigger problem lurking inside the law.

The out of pocket caps on consumer spending only apply to costs incurred on drugs that are included on a plan’s drug formulary. This is the list of medicines that the health plans have agreed to provide some coverage for.

If the drug isn’t on this formulary list, then the patient could be responsible for its full cost (with little or no co-insurance to help offset that cost). Moreover, 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).

These are the ways that Obamacare cheapens the health coverage in order to pay for all of its expensive mandates. ... 

There are some things we know about these formularies.

Under the law, the Obamacare plans benchmarked their drug formularies off of one of the health plans already operating in each state.

In selecting this benchmark, they could have to select from one of four options:

They could choose from: 1) One of the three largest small group plans in the state by enrollment; 2) one of the three largest state employee health plans by enrollment; 3) one of the three largest federal employee health plan options by enrollment; or 4) the largest HMO plan offered in the state’s commercial market by enrollment.

Because there’s a wide variation in the breadth of the drug formularies maintained by these four options, there is also wide variation in the Obamcare plans.

The formulary you’ll get depends most of all on which state you live in (and which benchmark was chosen by the state regulators). 

It also appears that the final regulation on all this, issued by the Department of Health and Human Services, gave states some latitude to nix drugs that might otherwise be listed on the benchmark formularies they selected. That regulatory wiggle room seems to undermine the whole idea of having a benchmark plan.

So can you find a good drug plan in Obamacare?

It’s difficult. ...

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.

One study by Avalere Health of 22 carriers in six states looked at the benchmark plans that the Obamacare plans would be tied to. It found that the numbers of drugs listed as available on formularies ranged from about 480 to nearly 1,110.

Even if your drug makes it onto the Obamcare plan’s formulary, getting access to a medicine can still be a costly affair for patients. ...

Many formularies are shaping up to be very restrictive even while meeting that minimum standard. The biggest challenge will be in getting new drugs onto existing formularies. The process is likely to be long, slow, and austere.

Health plans are cheapening their drug formularies – just like they cheapened their networks of doctors. That’s how their paying for the benefits that President Obama promised, everything from free contraception to a leveling of premiums between older (and typically costlier) beneficiaries, and younger consumers.

But the need to fund these promises will put drug formularies in play for the long run. New medicines will remain off formularies, or make it on after long delays. Patients will find that costlier specialty drugs are simply not covered.

Like a lot other parts of Obamacare, uncertainty around drug costs and coverage is becoming another one of the scheme’s unpleasant surprises.