One of the main points of the Affordable Care Act was to make sure that people with chronic conditions could not be discriminated against. For many, many years, people who had medical problems had difficulty getting insured, and if they could, policies could cost exorbitant amounts of money. This isn't because insurance companies were evil. It's because their business model forced them to individually rate plans. Someone who had a chronic condition would be much more expensive to care for, and a bad bet as a customer.
But the ACA forced plans to be sold with community ratings. No longer could insurance companies ask about your medical history before offering you a plan. They could only ask your age, if you smoke, where you live, and whether or not you wanted to insure just you, or your family.
As I've discussed before at the Incidental Economist, though, insurance companies are very, very good at what they do. These same rules apply to Medicare Advantage plans, and those plans have still sometimes managed to find ways to attract more healthy customers and dissuade less healthy ones.
A recent NEJM Perspective piece argues that this same thing might be going on under the ACA:
There is evidence, however, that insurers are resorting to other tactics to dissuade high-cost patients from enrolling. A formal complaint submitted to the Department of Health and Human Services (HHS) in May 2014 contended that Florida insurers offering plans through the new federal marketplace (exchange) had structured their drug formularies to discourage people with human immunodeficiency virus (HIV) infection from selecting their plans. These insurers categorized all HIV drugs, including generics, in the tier with the highest cost sharing.
The complaint alleges that insurance companies in some states are structuring their drug formularies in such a way as to discourage patients with HIV from signing up. There's no argument that patients with HIV can be expensive. Therefore, discouraging them as customers can be a financial plus. The authors of the NEJM piece performed a little experiment:
To explore the implications of this practice, we analyzed adverse tiering in 12 states using the federal marketplace: 6 states with insurers mentioned in the HHS complaint (Delaware, Florida, Louisiana, Michigan, South Carolina, and Utah) and the 6 most populous states without any of those insurers (Illinois, New Jersey, Ohio, Pennsylvania, Texas, and Virginia; for details, see the Supplementary Appendix, available with the full text of this article at NEJM.org). We examined the plans with the lowest, second-lowest, median, and highest premiums on the “silver” level in each state, analyzing formularies and benefit summaries to assess cost sharing for nucleoside reverse-transcriptase inhibitors (NRTIs), one of the most commonly prescribed classes of HIV medications. We chose this example because HIV is associated with high insurance costs, requires lifelong treatment, and is treated with an expensive and disease-specific class of medications. We defined adverse tiering as placement of all NRTIs in tiers with a coinsurance or copayment level of at least 30%. In estimating enrollees' average annual medication costs, we used the negotiated drug price paid by Humana, which makes its prices available online.
Basically, they looked at plans offered in the exchanges to see whether they made certain commonly used medications for HIV expensive for beneficiaries due to increased co-pays or co-insurance. They found that enrollees in adverse tiered plans had a yearly cost per drug that was almost $4900, versus about $1600 in non-adverse tiered plans. About half of the adverse tiered plans had a deductible that was drug specific, compared to fewer than 20% of other plans.
Bottom line, someone with HIV would pay more than $3000 a year in a adverse tiered plan versus another plan.
If you're an insurance company, it is good business to cover healthier people and have other companies cover sicker ones. If they can't individually rate, they may find other means try and preferentially attract and repel certain customers. Future regulations can help ensure this doesn't happen. Medicare D, for instance, designates some classes of drugs as "protected" and mandates that patients have access to them in all plans. Other options can be considered as well.
One of the most popular, and most successful, components of the ACA was to make health insurance and care more accessible to those with chronic conditions. We need to make sure that continues, policymakers may need to shore up holes that remain in the law.