New report finds insurers continue to discriminate against HIV enrollees

By using benefit design, insurers dissuade costly members from purchasing plans

New evidence has surfaced that claims insurers continue to discriminate against costly, sick patients.

Out of the 48 plans examined in a new report from the New England Journal of Medicine, 12 were found to use adverse tiering. The report analyzed adverse tiering in 12 states that sell plans through the federal exchange and looked specifically at one of the most commonly prescribed HIV medications.

For adverse-tiering plans (ATP), enrollees paid an average of $4,892 annually, compared to $1,615 for those in non-ATPs.

Back in 2012, the Obama administration proposed a provision in the Affordable Care Act that would make it illegal for insurance companies to discriminate against people with pre-existing conditions.

How are insurers evading the provision? Based on the NEJM findings, it appears insurers may be using benefit design to discourage sicker consumers from choosing their plans. Meaning, insurers design their drug formularies to place all HIV drugs in the highest cost-sharing tier, forcing enrollees with HIV to pay more, regardless of which drug they take.

Adverse tiering is problematic for a number of reasons. First, enrollees may choose an ATP based on its low premium but still end up paying higher out-of-pocket costs, suggested the report. Second, this sort of tiering eventually will lead to adverse selection. Certain insurers who offer generous benefits may experience an increase in costlier enrollees switching to their plans, which means these insurers will end up paying more.  

This recent report backs a complaint filed last year by the AIDS Institute and the National Health Law Program that claimed Cigna, CoventryOne, Humana and Preferred Medical Plan placed all HIV medications sold in Florida, including generics, on top formulary tiers, as FierceHealthPayer previously reported.

"The study is more confirmation that this is happening, not only in Florida, but in other states as well," Carl Schmid, deputy executive director of the AIDS Institute, told the New York Times.

For more:
- here's the NEJM report
- check out the New York Times piece

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