Expensive, life-saving medications will soon become more affordable to people who buy their health insurance through Covered California. The state insurance exchange's board voted unanimously Thursday to cap out-of-pocket monthly costs for specialty drugs, such as those that treat Hepatitis C and HIV/AIDS.
Beginning in 2016, people on most Silver, Gold and Platinum plans will pay up to $250 per specialty drug prescription per month. Those on some silver plans will be subject to a pharmacy deductible up to $250. Consumers enrolled in Bronze plans, which have lower premiums, will pay up to $500 per prescription per month after meeting a $500 pharmacy deductible.
The change only affects people who buy private health insurance through Covered California for 2016, not those who are insured through their employers.
The changes come in response to concerns that some specialty drugs are so expensive that patients could reach the annual out-of-pocket maximum set by the Affordable Care Act - $6,600 - in as little as a month. Consumer advocates expressed concerns that patients would not adhere to their medication regimens if they couldn't afford their drugs.
Covered California had proposed higher limits in April: Monthly caps of $200 for some Silver plans, $300 for some Platinum plans, and $500 for Bronze plans and some Silver and Gold plans. But the board postponed a vote on the measure, as state Insurance Commissioner Dave Jones and consumer groups argued the caps were still too high for low-income people.
Consumer groups are applauding Thursday's vote.
"We are pleased that Covered California took another look at the data and adjusted their proposal to make these out-of-pocket costs more manageable over the year," Anthony Wright, executive director of Health Access California, said in a statement.
Many patients with multiple sclerosis, Hepatitis C, or HIV/AIDS "will have very high out-of-pocket costs regardless, but the lower monthly cap prevents families from facing a financial shock at the beginning of the year," Wright said.
Liz Helms, CEO of the California Chronic Care Coalition, also praised the board's move, but called on its members to reexamine the $500 caps for people with Bronze plans. "As it stands now the Bronze plan will not meet the needs of Californians with chronic conditions," she said in a statement.
A bill moving through the state legislature would extend a similar drug price cap to people with employer-based plans, as well as those who buy through Covered California. AB 339, authored by Assemblyman Rich Gordon (D-Menlo Park), would cap out-of-pocket costs for specialty drugs at no more than $275 for a 30-day prescription.
The California Association of Health Plans believes that in general caps can lead to higher premiums, said spokeswoman Nicole Kasabian Evans. Still, the Association did not take a position on Covered California's move to cap specialty drug costs, she said, noting that the exchange agreed to conduct an annual reassessment that could lead to a change in the caps.
The Association does oppose AB 339, Evans added, pointing out that the bill would write the cap amount into statute. That could make it difficult to strike the right balance between premiums and out-of-pocket costs, she argued.