Commissioner Jones and patients urge Covered California to make life-saving drugs affordable for Californians with severe illness
News: 2015 Press Release
SACRAMENTO, Calif. -Insurance Commissioner Dave Jones, patients and consumers urged the Covered California board to amend its proposal to allow health insurers to require Californians to pay unaffordable out-of-pocket costs to obtain specialty drugs needed to treat chronic illness.
Covered California's prescription drug cost sharing plan is the standard that must be followed by all health insurers and health plans selling in the individual and small employer market. Under the Covered California plan, which staff has recommended the board adopt on Thursday, Californians will have to pay up to $500 per month per prescription for specialty drugs needed to treat chronic illness, in addition to their monthly insurance premium.
"Covered California's specialty drug proposal is a potentially discriminatory benefit plan design that would propel vital, life-sustaining drugs out of reach for many Californians," said Commissioner Jones. "This plan creates an insurmountable affordability barrier for the average consumer, particularly those who struggle with chronic and life-threatening conditions that require multiple prescriptions."
Californians with chronic illnesses often must take multiple drugs, which means they could have to pay a minimum of $1,000 a month out of pocket even though they have health insurance. Patients are forced to pay costs they cannot afford or forego taking drugs needed to address life threatening or other chronic illness.
Jones and consumer groups noted that Covered California's proposal to let health insurers charge up to $500 per prescription per month for specialty drugs will require many Californians with chronic illness such as MS, Rheumatoid Arthritis or HIV/AIDS to pay thousands of dollars in the first few months of their health insurance policy year in order to receive life-saving and life-sustaining drugs. The commissioner and consumer groups urged that Covered California adopt a much lower $200 monthly cap for these specialty drugs, as other states have done.
The commissioner was joined by consumer and patient advocates from California Chronic Care Coalition and Project Inform, who described the negative financial and health impact Covered California's plan will have on patients who need these drugs.
"Californians who are paying their premiums should not be penalized simply because they get sick," said Liz Helms, CEO of the California Chronic Care Coalition. "When people are unable to afford their treatments, they often scale back on treatment or forego the care they need altogether, which leads to worsening health and increased health care costs."
The commissioner noted that insurance code sections 10965.5(a)(3) and 10753.05(h)(3) prohibits practices or benefit designs that would have the effect of discouraging consumers with significant health needs or conditions from enrolling in health insurance products with Covered California's standard benefit design, which by law must be offered by all health insurers both inside and outside the health exchange.
Over the last two years, the Department of Insurance has rejected some plan designs with co-insurance requirements on specialty drugs because of their discriminatory impact on those with certain medical conditions.
"The caps being recommended by Covered California staff are welcome but they do not go far enough," said Anne Donnelly, Director of Health Care Policy at Project Inform. "$500 per prescription per month for most of those in Covered California plans will mean that many with chronic conditions will be forced to exhaust limited savings or forego necessary health care."
- Commissioner Jones' detailed objections to the Covered California drug plan were presented in a letter to the Covered California Board.
- Audio recording is available to the public.
The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $310 billion in premiums annually in California. Since 2011 the California Department of Insurance received more than 1,000,000 calls from consumers and helped recover over $469 million in claims and premiums. Please visit the Department of Insurance website at www.insurance.ca.gov. Non-media inquiries should be directed to the Consumer Hotline at 800.927.4357. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.