Understanding Patient Access in Health Insurance Exchanges August 2014 avalerehealth.net
Agenda Exchange Basics and Patient Protections Formulary Coverage Cost-Sharing Transparency 2
Exchange Basics and Patient Protections
What is an Exchange? People who do not have Medicare, Medicaid, VA/TRICARE, or insurance from an employer Online Shopping Experience Individual Marketplace Small Business Marketplace* Groups with 50 workers 4
The Affordable Care Act Reformed the Individual Insurance Market, Established Patient Protections Coverage of Pre-Existing Conditions Plans are applying more utilization management controls that limit access to patients medications Premiums No Longer Based on Health Status Premiums may only be rated by age, family size, region and tobacco use* Essential Health Benefits Plans must cover ten categories of services, including prescription drugs, rehabilitation services, and hospitalization Out-of-Pocket Limits Cost-sharing is limited to $6,350 for individuals & $12,700 for families in 2014 *Several states, including NY and VT, have no age rating for premium, and some do not rate base d on tobacco use 5
Financial Assistance Is Available to Patients Purchasing Exchange Coverage TYPES OF FINANCIAL ASSISTANCE IN EXCHANGES PREMIUM SUBSIDIES Available to those earning between 100% and 400% FPL, or about $12,000 to $48,000 for an individual (and $24,000 to $95,000 for a family of four) Based on the second-lowest cost silver plan in the patients region COST-SHARING SUBSIDIES Reduces out-of-pocket costs for those earning 100 to 250% FPL Cost-sharing is lower in special silver plans available only to people in this income bracket By the middle of 2014, over 8M people had signed up for exchange coverage and nearly 7M qualified for financial assistance FPL = Federal Poverty Level 6
Plans Must Keep Premiums Low to Encourage Enrollment, But Must Rely on Limited Tools to Do So New requirements on plans make it difficult to keep premiums low Essential Health Benefits.but plans have limited tactics for designing affordable benefits Network Design: Despite requirements that they must offer adequate networks, plans are designing high-value, narrow networks Metal Level (Actuarial Value) Guarantee Issue & Rating Rules Out-of- Pocket Limits Formulary Design: Tier placement and utilization management help plans manage drug use, but create patient access challenges Cost-Sharing Requirements: Cost-sharing for medicines and some kinds of care are particularly high 7
Most Enrollees Have Selected Silver Plans, Which Are Significantly Less Generous than Employer Coverage LEVELS OF PLAN GENEROSITY EMPLOYER 1 93% PLATINUM 90% GOLD 80% SILVER 70% BRONZE 60% CATASTROPHIC 50% Exchange plans are available at four metal levels that cover different percentages of medical costs. Platinum plans are the most generous and have the highest premiums; they cover 90% of average healthcare costs. Bronze plans have the lowest premiums but cover only about 60% of average costs. Silver plans are the minimum level of coverage that individuals qualifying for financial assistance may purchase. Catastrophic plans are only available to people under the age of 30 or those with special exemptions. The typical employer plan is more generous than the highest-value exchange plan. 1. Typical Employer HMO Source: Peterson, Chris. Setting and Valuing Health Insurance Benefits. Congressional Research Service. (2009) 8
In 2014 Many ADAP Patients Began Shifting into Other Sources of Coverage The ACA s coverage expansion will extend coverage to many individuals who are currently uninsured and enrolled in ADAPs Medicaid Exchange Coverage ADAP Patients Other (Remain Uninsured, Bridge Plan, etc.) Many ADAP enrollees will no longer rely on these programs primarily for medications, but may require cost-sharing support. ADAP policies for transitioning enrollees to new sources of insurance may vary dramatically. Source: National Alliance of State and Territorial AIDS Directors, Flow Chart Affordable Care Act Eligibility Systems. * Figures are rounded and reported by NASTAD, National ADAP Monitoring Project Annual Report, February 2014. Includes all individuals in these income brackets, such as undocumented immigrants and those receiving wrap-around coverage. 9
Formulary Coverage
Exchange Plans Must Meet Minimum Requirements for Prescription Drug Coverage Each state selected a benchmark plan* most often a small employer plan to serve as a reference for coverage of specific healthcare items and services in exchange plans Beginning in 2014, for prescription drugs, exchange plans must cover: The same number of prescription drugs in each category and class as the benchmark plan OR In classes not covered by the benchmark, one drug in every category and class Drug categories and classes are defined by the United States Pharmacopeia (USP) Model Guidelines developed for Medicare Part D The drug count is based on distinct chemical entities, which doesn t distinguish between brand and generic forms, or among dosage strength or extended release forms of a medicine Plans may still apply utilization management and use formulary tiers Plans must have procedures in place to ensure enrollees have access to medically necessary drugs that are not included on the plan s formulary * Called the Essential Health Benefits benchmark plan 11
Utilization Management Limits Access to Certain Medicines, and Is More Frequent in Exchange Plans RATE OF UM FOR HIV/AIDS MEDICINES EXCHANGE PLANS VS. EMPLOYER PROVIDED COVERAGE Common Types of Utilization Management (UM) Prior authorization requires that a physician get permission for the health plan to prescribe a particular medicine Step therapy requires that a patient fail on one or two medications prior to getting access to a particular medicine 10% 6% 84% Employer 19% 21% 60% Exchange No UM UM Not Covered Source: Avalere PlanScape, Updated November 1, 2013. Single-source branded drugs across 84 plans, bronze and silver; a small percentage of plans in the sample had no UM data ; HIV/AIDS includes 4 classes. 12
Single Tablet Regimens Are Excluded from Formularies in 39% of Plans, Compared to Only 10% of Other NRTIs PERCENT OF PLANS BY UTILIZATION MANAGEMENT TECHNIQUE FOR BRANDED DRUGS IN CLASS 1 Single Tablet Regimens Other Branded NRTIs 0% 20% 40% 60% 80% 100% No UM PA Only ST Only PA & ST Any Other UM No Data Not Covered Note: Data weighted by product, not utilization. PA = Prior Authorization; ST = Step Therapy; UM = Utilization Management; Note other UM includes any type but PA and ST, including, but not limited to: quantity limits and age/gender limits. 1. UM data is across all plans analyzed, regardless of formulary structure; only includes branded drugs in class. Source: Avalere Health PlanScape, a proprietary analysis of exchange plan features. Data as of October 18, 2013. 13
PERCENT OF PLANS Exchange Formulary Structure More Similar to Part D Than Employer Coverage DISTRIBUTION OF FORMULARIES BY NUMBER OF TIERS, BY MARKET SEGMENT 23% 91% 94% 59% 19% 9% 3% 3% Exchange (2014) Medicare Part D (2014) Employer (2013)* Two or Fewer Tiers Three Tiers Four or More Tiers Most individuals in exchanges will face formularies with four or five cost-sharing tiers that commonly use coinsurance techniques for top-tier medications *Employer data represented distribution of covered workers whereas exchange and Part D data represent distribution of plans. Source for Exchange Data: Avalere PlanScape, Updated November 2013. Avalere collected plan information from both federally-facilitated and state-based exchanges and captured a sample of over 600 plans for the analysis. Source for Employer Data: Kaiser Family Foundation and Health Research & Educational Trust, Employer Health Benefits 2013 Annual Survey. Source for Part D Data: Avalere Health analysis using DataFrame, a proprietary database of Medicare Part D plan features, Updated October 2013. 14
Points to Consider Plans must meet minimum coverage requirements However, these requirements don t guarantee that multiple drugs for specific conditions will be on a plan s formulary, and plans do not necessarily have to cover drugs that are new to the market Patients should carefully review a plan s list of covered drugs before enrolling to ensure needed medicines will be available, especially if the patient needs a specific medicine or a newer therapy When getting a prescription for a new medicine, patients should check their formulary to ensure it is covered and review cost-sharing Exchange plans frequently restrict access to select medicines Before enrolling in an exchange plan, patients should check the formulary and other materials to understand if the medicines they take are subject to restrictions, like utilization management 15
Cost-Sharing
Understanding the Cost of Care in Exchange Plans DEDUCTIBLES Amount you must pay out-of - pocket for care BEFORE your plan contributes to the cost of services May be separate for medical services and for prescription drugs Plans may exempt certain care from the deductible COPAYMENTS AND COINSURANCE Copayments are fixed amounts you must pay for care or medicines, such as a $20 copay for a doctor visit Copayment/Coinsura nce Coinsurance is a percentage of price of the care you need and may be difficult to estimate in advance OUT-OF-POCKET MAXIMUM for an individual is $6,350 and $12,700 for a family This includes only covered, in-network care (2014) Plans may have LOWER out-of-pocket maximums 17
On Average Silver Deductibles Are More Than $2,500, But ADAPs Providing Wrap Around Support Ease Financial Burden $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $- $4,959 AVERAGE MEDICAL DEDUCTIBLES BY METAL LEVEL $3,132 $1,713 Employer: $1,135* $1,000 Bronze Silver Gold Platinum Deductibles for silver plans are more than twice the average deductible in employersponsored coverage. After the deductible, many patients will face coinsurance levels greater than 30% for HIV medications. But for HIV/AIDS patients, ADAPs providing wraparound support help with affordability concerns. *Average deductible for individual coverage;: Kaiser Family Foundation/ HRET 2013 Employer Health Benefits Survey. Source: Avalere PlanScape, Updated November 1, 2013. Avalere collected plan information from both federally-facilitated and statebased exchanges and captured a sample of over 600 plans for the analysis. 18
Medicines on High Tiers May Be Unaffordable Plans divide formularies into tiers of drugs; each tier has a different price for cost-sharing The formulary also may show whether each medicine has prior authorization or other utilization management Nearly three-quarters of exchange plans have four or more tiers and require coinsurance on the top tier* High rates of coinsurance often result in high out-of-pocket costs at the pharmacy HIV/AIDS medicines are subject to coinsurance in about 55% of plans, with an average coinsurance of 35% for all medications and 37% for combination medicines. $1,100 to $6,350 annual outof-pocket cost for HIV / AIDS medicines and care (assuming 35% coinsurance) Cost-sharing calculated for single-source medicines covered under the pharmacy benefit at a rate of 40% coinsurance *Based on 84 plans analyzed ** Targeted therapies (molecular target inhibitors and antiangiogenic agents) listed on the plan s formulary Source: Avalere Health PlanScape 19
Special Silver Plans with Reduced Cost-Sharing May Still Leave Patients with High Out-of-Pocket Costs Most cost-sharing reduction plans reduce medical deductibles Variation among these reduced deductibles remains; among the most generous* silver plans analyzed, the highest deductible ($700) is three times greater than the average ($220) Silver plans for people with limited income also have lower the maximum out-ofpocket limits, which are even lower than required on average However, medicines may be unaffordable as many plans do not lower cost-sharing medications on higher drug tiers: A patient taking a specialty drug could pay coinsurance of up to $2,250 for a single fill Most individuals at this income level (between 100% and 150% FPL) have only $671 of liquid assets, so this level of cost-sharing is a serious barrier to access ADAPs providing wrap around support may ease the financial burden of lower-income HIV/AIDS patients transitioning to exchange coverage and struggling to finance costs of necessary medications and care. *94% actuarial value FPL = Federal Poverty Level For the purpose of this analysis, Avalere used the coinsurance and copayment amounts that applied after the deductible was met. Plans that noted that there was no charge after the deductible was met were excluded. Data in the Landscape file is structured into four formulary tiers. For plans that have fewer or more than four formulary tiers, the data in this file may be inaccurate. For the purpose of this analysis, medical deductibles include combined deductibles as well as separate medical-only deductibles. Source: K Brantley et al, Analysis of Benefit Design in Silver Plan Variations, Avalere Health, June 2014, available at: http://avalerehealth.com/expertise/managed-care/insights/avalere-analysis-cost-sharing-reductions-unevenly-applied-across-services-i 20
Points to Consider Coverage does not guarantee affordability Many of the most innovative medicines are on specialty tiers or tiers with high cost-sharing Coinsurance for medicines and services may be hard to predict or compare The out-of-pocket cost for a single fill of medicine could be too expensive, especially before a patient has met the deductible Even patients with financial assistance may face high costsharing for certain services, including medicines Patients with chronic diseases may not be able to afford the cost of services and medicines, even with premium subsidies and cost-sharing assistance ADAPs providing support help to ensure stable access to care and medicines ADAP wrap around support varies widely by state, but several programs proactively transitioned patients throughout the 2014 open enrollment cycle and offered wrap around programs to ensure steady access to care and medicines 21
Transparency
Patients Need Detailed Information on Benefits to Select the Best Plan for Their Needs Making an informed decision requires accurate information on the following: Deductibles, including separate medical and drug deductibles, and services exempt from the deductible Formularies, including coverage, restrictions on access, and cost-sharing information Provider networks, including physicians and facilities Additional services or notable restrictions 23
Information on Exchange Plan Networks, Formularies May be Difficult to Find When Shopping for Coverage DRUG FORMULARY ACCESSIBILITY, BY PLAN* PROVIDER DIRECTORY ACCESSIBILITY, BY PLAN* Formulary Not Available, Very Accessible, 31% Very Difficult, 5% Directory Not Available, 16% 38% Difficult, Very 2% Accessible, 41% Very Difficult, 4% Difficult, 7% Moderately Accessible, 21% Moderately Accessible, 35% *Numbers may not sum to 100% due to rounding. Source: Avalere Analysis: Exchange Consumer Experience, April 28, 2014 24
Points to Consider Consumer tools to shop for exchange coverage are limited If patients have trouble locating a provider lists or formulary online when shopping for coverage, they can call the health plan to get the information to make the right choice for their needs Flag issues to government officials and advocacy partners Call or write HHS, State Insurance Commissioners, or work with advocacy partners to flag issues in which patients can t access necessary information With high deductibles and coinsurance, its important to ask for information on health care prices Once patients are enrolled in their selected plans, they should check with providers before seeking care. It s also a good idea to check with the plan or pharmacist when filling prescription to avoid any surprise out-of-pocket costs 25
Questions? Kelly Brantley Senior Manager Kbrantley@avalere.com Hillary Bray Senior Associate Hbray@avalere.com 26