By Bethany Pray

It seems everyone knows someone who’s had to pay hundreds or thousands of dollars a month for expensive prescription drugs – whether it’s to treat a deadly cancer like leukemia or an autoimmune disease like MS.

Before the passage of the Affordable Care Act, it was difficult for many people with such chronic conditions to buy health insurance at all. Now, thanks to the ACA, insurers must take all comers, whether or not they have pre-existing conditions.

Bethany Pray

Beyond that, the ACA states that plans offered on state or federal exchanges must provide essential health benefits, and that non-discriminatory plan benefit design is an integral part of that requirement. This means that the way plan benefits are structured – with particular copays or coinsurance, deductibles, provider networks or pre-authorization requirements – must not discriminate against people on the basis of “age, disability, or expected length of life.” (45 CFR §156.125.)

Unfortunately, the way that many health insurers structure payments for specialty drugs is still discriminatory. Because these drugs, also known as specialty drugs, are so expensive, insurers wrangle with how to cover costs without hurting the bottom line or raising premiums. As a result, they’ve increasingly favored a coinsurance model for these drugs since the implementation of the ACA. I

n Colorado, the trend has been steep, with nearly all carriers utilizing coinsurance on the highest tier, and coinsurance rates as high as 50 percent.

For the uninitiated, coinsurance is a form of cost-sharing in which the consumer covers a percentage of a drug’s price after the deductible has been paid. (By contrast, co-payments are a fixed dollar amount paid by the patient for a prescription, and this form of cost-sharing is often in place before a deductible has been satisfied).

For someone who is prescribed cheap and generic medications, coinsurance payments may be negligible. But if you are paying up to 50 percent for specialty drugs that cost thousands of dollars a month, you may be in a position of having to choose between taking the medication you rely on and paying your mortgage.

Responding to an outcry among consumers over this phenomenon, advocates from the Colorado Center on Law and Policy, Colorado Consumer Health Initiatives and the Chronic Care Collaborative began preliminary discussions with Colorado’s Division of Insurance (DOI) last spring.

By summer, more stakeholders had joined the conversation, including the Colorado Association of Health Plans, individual carriers and pharmacy representatives. Others who came to the table included the Colorado-Wyoming Chapter of the National MS Society, the Colorado Chapter of the National Hemophilia Foundation and the American Cancer Society’s Cancer Action Network.

What became clear right away was that any fix to the problem (whether through legislation or regulation) was going to have to be in place almost a year in advance of the 2016 plan year, due to a series of federal and state deadlines.

While these groups did not reach a consensus on a solution, most (notably, the DOI) ultimately agreed that the financial burdens that coinsurance structures placed on people with chronic illness had to be addressed. After hours of thoughtful discussion (and on the heels of proposed rule-making by the federal government that touched on this issue) the DOI recognized that a plan benefit design that puts these kind of extreme costs on a particular population – specifically, people with disabilities – is discriminatory.

Although we believe that the DOI had authority under state and federal law to issue regulations, we recognize that the ACA has created a new legal landscape through which states are still finding their way. Instead, the agency took the more preliminary step of issuing a bulletin that would provide guidance on the matter. A bulletin aims to provide clarity to health plans and consumers about the DOI’s interpretation of existing law and how it applies to Colorado’s insurance market. Guidelines cited in bulletins are not binding but generally adhered to by insurers.

Despite some indications that the DOI was considering barring coinsurance overall, the DOI issued a final bulletin in January 2015, which suggested that plans utilizing coinsurance “may” constitute a prohibited practice under Colorado law, while nonetheless maintaining the coinsurance option.

In short, the DOI advised Colorado insurers to use the coinsurance model for prescription drugs in no more than 75 percent of their plans, meaning that consumers with chronic conditions would have the option of selecting co-payment plans. The DOI also established guidelines for co-payment plans, including limiting copayments on the highest tier to no more than 1/12^th of a plan’s annual out-of-pocket maximum.

While the guidance doesn’t go far enough to make specialty drugs more affordable for individuals, it took a vital first step in acknowledging that the current cost-sharing structure may be discriminatory. It also establishes that drugs for a particular condition can’t all be on the highest tier – a move that might allow people to access appropriate drugs on lower, less expensive tiers.

In a statement that CCLP authored with its coalition partners, we applauded the DOI for its efforts. The fact that the DOI took the step of identifying discriminatory plan benefit structures could signal the beginning of better protections nationwide for people with disabilities.

But we also anticipate that the DOI and others involved in these discussions recognize the need to revisit the issue in the near future. After all, while it’s reasonable for pharmaceutical companies, pharmacies and insurers to receive some kind of a payment for these potentially life-saving drugs, we must take measures to ensure that compensation is reasonable and individuals aren’t essentially being priced out of good health.

As recognized by the ACA, people deserve access to health care that is truly affordable. This basic concept seems like a tenet of fairness and human dignity – and one that everyone should get behind.

Bethany Pray is health care attorney for the Colorado Center on Law and Policy.