A practiced called "adverse tiering" may be driving away patients with preexisting conditions.
A practiced called "adverse tiering" may be driving away patients with preexisting conditions. - 
Listen To The Story
Marketplace

The Department of Health and Human Services is currently in the initial review period for health care plans to be sold on exchanges for the 2016 open enrollment period. They’re making sure plans comply with the complex regulations in the Affordable Care Act, or ACA. But this time around, some groups are objecting to minute details in plans. Advocates and patients say some insurers are designing their benefits to drive away people with preexisting conditions.

One such patient is Sarah Truman, of Portland, Oregon. Truman wakes up every day and sorts through her stockpile of pills. “I take 17 pills a day—on a good day,” she explains.

Truman has psoriasis, the autoimmune disorder that causes flaky and scaly skin. She also has psoriatic arthritis, a related condition that causes painful joint swelling.

Even under her Obamacare plan, she still spends hundreds of dollars each month on co-payments. That's actually an improvement. But one crucial intravenous medication — a type of chemotherapy — costs more than a copay.

“That right now is $15,000 a month, and that’s treated as a co-insurance, not a co-pay,” Truman says.

Since Truman has 20 percent co-insurance rate, she pays 20 percent of the cost: $3,000 a month. Even though she has a well paying job, she still has to go to food banks to afford her kids’ food. Advocates say plans like hers force patients to either pay very high costs or find a different plan, thus undermining the purpose of the affordable care act.

Douglas Jacobs, a masters student in Public health at Harvard University, surveyed how plans priced their drugs

“We found a full one in four plans were practicing what we called 'adverse tiering,'” he says, meaning that the drugs a person needs for a condition are prohibitively expensive under that plan.

“The whole purpose of the Affordable Care Act was to distribute risk in a way that made healthcare affordable to individuals who couldn't get to it before Affordable Care Act was passed,” Jacobs says.

And advocates say the clearest-cut example of adverse tiering was found in Florida by the AIDS Institute.

“There are discrimination protections in the ACA, and they are trying to get around those,” explains Carl Schmid, the AIDS Institute’s vice president of policy.

The AIDS Institute says it's discrimination because some Florida plans put all HIV medications into the highest tier—even generics. Schmid says it’s a tiny nudge to keep expensive groups of people away from those plans. The AIDS Institute objected and sent a letter to the Obama administration.

“The administration has said that this is discrimination,” Schmid says. “Now we need them to enforce the law.”

They also complained to Florida’s insurance regulator, and eventually insurers placed some HIV medications into cheaper tiers. The insurers declined to comment on pending legal matters.

The Department of Health and Human Services is reviewing whether this kind of drug pricing is discrimination on the basis of preexisting conditions. Their ruling should apply by next year’s open enrollment.

As a nonprofit news organization, Marketplace is on a mission that drives what we do every day: to increase economic intelligence across the country. But we can’t do it alone. Become a Marketplace Investor today, in whatever amount you choose, and your donation will go twice as far, thanks to a dollar-for-dollar match from The Kendeda Fund.

Become a Marketplace Investor today – in whatever amount is right for you – and keep public service journalism strong. We’re grateful for your support.

Follow Tim Fitzsimons at @@tfitzsimons