Last summer, in one of my favorite posts, I talked about how insurance companies are still trying to be evil bastards and the need for state regulators to step in and compel them to be grudgingly unwilling not as evil bastards:
Insurers are required to accept and cover HIV patients. They don’t want to. So they are trying to avoid them by being fugly.
Insurance companies still want to tilt their risk pools to be as healthy as possible while letting their competitors eat the costs of covering the known sick….
This incentive structure creates an adverse selection mechanism collective action problem. We are seeing this problem emerge with AIDS/HIV drugs in Florida….
The simplest legal way to target unattractiveness to HIV patients is to make the drugs as expensive as possible.
This anti-social but rationally based business model should make the plan very unnattractive to individuals with HIV. They will logically look at the market and look for a plan that does not completely fuck them over.
The same logic applies to diabetics, cancer survivors, transplant recipients and other high cost individuals…Once one plan in a market decides to make themselves as unattractive as possible, every other plan has to either follow suit in making themselves unattractive or be willing to take on massive health costs as they become the preferred plan for HIV positive individuals.
What are the policy solutions?
A… much more plausible solution is to take a regulation from Medicare Part D, “protected classes” and require all insurers to offer at least all chemical/bio-equivilant compounds for HIV, diabetes etc at a “reasonable” formulary tier. If there is a brand and a generic chemical available, the insurer could offer the generic at the “protected class” rate and the brand at a worse tier. The goal would be to force all insurers to not compete on avoiding the sickest people by forcing them to offer the same formulary at roughly the same rates of attractiveness for identified high cost diseases.
California is effectively taking a twist on this policy solution. The Sacramento Bee reports that Covered California is mandating that there is a seperate monthly out of pocket limit for prescriptions as well as mandating reasonable teiring of drugs.
The four board members unanimously agreed to impose $250 monthly limits on out-of-pocket prescription costs for most patients, creating a precedent that other government health exchanges could follow….
The board also adopted changes for 2016 that include prohibiting health insurers from placing all drugs to treat certain conditions, such as HIV, in their highest price category.
Some plans have placed all treatments for HIV and hepatitis C into a category that requires patients to pay up to 20 percent of the drug’s cost rather than a copay of $10 or $20.
Covered California is mandating an even playing field where the health insurance companies no longer have an easy route to make themselves as ugly as possible to people who have high cost conditions.