Analysis: Exchange plan patients to bear the burden of specialty medicines

WASHINGTON — In most exchange plans, consumers will face paying a percentage of the costs — often called co-insurance — rather than fixed-dollar co-payments for many specialty medications used to treat rare and complex diseases. According to a new Avalere Health analysis, some plans require enrollees to pay 50% of the specialty drug’s cost. If exchange plans use coinsurance for specialty medications, patients may incur several thousands of dollars of cost-sharing for high-cost drugs before reaching the out-of-pocket maximum.

“This latest analysis further underscores that exchange enrollees could face high out-of-pocket costs, particularly for specialty medications,” stated Caroline Pearson, VP Avalere Health. “High prevalence of coinsurance also can make costs unpredictable for patients who struggle to translate cost-sharing percentages into actual dollars.”

Specifically, 59% of Silver plans on exchanges across the nation use co-insurance for consumer cost-sharing on the specialty tier. Among Silver plans, the analysis also found that 23% of plans have co-insurance rates of 30% or more on the highest formulary tier. As many as 60% of lower-premium Bronze plans apply specialty tier co-insurance greater than 30% of the drug price. 

By contrast, only 38% of Platinum plans require co-insurance.  

“Health plans operating in the exchanges are using significant cost-sharing to meet actuarial values set forth in the law and limit premium costs. However, these formulary designs often result in high costs for patients with chronic illness who need biologics and other products on the specialty tier,” said Dan Mendelson, CEO Avalere Health. “Tracking these patients to ensure that they are getting appropriate care is a critical quality need.”

Avalere Planscape examined 603 different plan designs across metal levels offered by 60 different carriers in 19 states, both federally facilitated marketplaces and state-based exchanges. The distribution of metal level and plan type of the plans included is similar to the distribution of plans offered on the FFM. High-deductible plans are not included in this analysis.

This analysis specifically focuses on drugs dispensed through the pharmacy benefit, which includes self-administered products. Many specialty drugs must be physician-administered and will be covered under the medical benefit, which will have separate cost-sharing requirements from the co-insurance rates described here.