Health Insurance Costs Increases in 2016

Patients Struggle with High Drug Prices (WSJ). There is a 10.1% Average Increase in Monthly Silver Premiums in Health Insurance starting January 2016 (The Kaiser Family Foundation)

Highlights

Out-of-pocket costs for pricey new drugs leave even some insured and relatively affluent patients with hard choices on how to afford them

The pharmaceutical industry, after a long drought, has begun to produce more innovative treatments for serious diseases that can extend life and often have fewer side effects than older treatments. Last year, the Food and Drug Administration approved 41 new drugs, the most in nearly two decades.

The catch is their cost. Recent treatments for hepatitis C, cancer and multiple sclerosis that cost from $50,000 annually to well over $100,000 helped drive up total U.S. prescription-drug spending 12.2%

For those in the middle class, it is a different story. Though many patients can get their out-of-pocket costs paid by drug companies or drug-company-funded foundations, some patients make too much money to qualify for assistance. Others are unaware the programs exist. Medicare patients, who represent nearly a third of U.S. retail drug spending, can’t receive direct aid from drug companies.

The upshot is even patients with insurance and comfortable incomes are sometimes forced to make hard choices—tapping savings, taking on new debt or even forgoing treatment.

The aid programs can come with income limits and other restrictions. In the case of Ms. Racener in Belleville, a suburb of St. Louis, a hospital social worker looked into help from nonprofit foundations funded by drug companies. Her income was too high to qualify.

She earned about $80,000 between her job and Social Security. Her car payments, credit-card debt and a $600 monthly mortgage on her ranch house made the drug prescribed for her leukemia in February unaffordable.

Ms. Racener’s doctor, John DiPersio, chief of oncology at Washington University School of Medicine, says the expense of new cancer drugs is burdensome for growing numbers of patients whose insurance entails substantial copays. “The financial destitution that modern therapies bring on patients and their families is enormous,” he says.

Johnson & Johnson, says new drugs are helping turn some cancers from life-threatening to manageable, but “more costs are being shifted to patients, making it hard for some to get the medicines they need.”

Health insurers say patients pay more for their care because costs continue to climb. Drug prices are one of the main drivers of insurance-premium increases, says Clare Krusing, a spokeswoman for America’s Health Insurance Plans, an industry group. Lowering patients’ share of expensive drugs’ cost would mean even higher premiums, she says.

Drug companies point to aid they provide. J&J says it helps patients manage costs both through its own programs and by donating to charities.

Pharmaceutical companies can’t provide copay aid directly to Medicare recipients. Doing so could be construed as a violation of the U.S. anti-kickback statute, which prohibits companies from using financial incentives to encourage the sale of their products to federal health-care programs. Companies can, however, point the patients to nonprofit organizations they finance, which cover copays for patients who meet income tests.

Patients on Medicare are starting to feel some relief from out-of-pocket expenses through a provision in the Affordable Care Act that requires a gradual lowering of patient contributions. When the reduction is complete in 2020, the median out-of-pocket cost for Medicare patients taking oral cancer drugs will be $5,660 a year, according to a study in the Journal of Clinical Oncology. Even that is more than the average beneficiary’s household spends on food in a year, the study said.

References
Wall Street Journal (http://www.wsj.com/…/patients-struggle-with-high-drug-price…)
Kaiser Family Foundation (http://kff.org/…/analysis-of-2016-premium-changes-in-the-a…/)

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