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Despite Health Law’s Protections, Many Consumers May Be 'Underinsured'

WebMD News from Kaiser Health News

By Michelle Andrews

Tue, Dec 24 2013

People with chronic conditions will be better protected from crippling medical bills starting in January as the health law’s coverage requirements and spending limits take effect. But a recent analysis by Avalere Health found that many may still find themselves “underinsured,” spending more than 10 percent of their income on medical care, not including premiums, even if they qualify for cost-sharing subsidies on the health insurance marketplaces.

“You have some great protections in place, but these out-of-pocket costs and how plans are structured are going to create some serious problems,” says Marc Boutin, executive vice president at the National Health Council, an advocacy group for people with chronic health conditions.

Potential trouble spots include prescription drugs; specialist care, including that provided by academic medical centers; and services such as physical therapy that typically require a course of treatment over weeks or months, say experts.

The health law prohibits insurers from turning down sick people for coverage and generally eliminates lifetime and annual dollar limits on benefits, including hospitalization and prescription drugs.

It also caps the amount people spend out-of-pocket in 2014 at $6,350 for individuals and $12,700 for families that buy a plan on the individual and small group markets, including the health insurance exchanges. People with incomes below 250 percent of the federal poverty level ($28,725 for an individual or $58,875 for a family of four in 2013) may qualify for cost-sharing subsidies on the marketplaces that reduce those caps as well as their deductibles and copayments.

The Avalere analysis found that many chronically ill people, especially those in Bronze or Silver plans that offer less generous coverage, will likely reach their out-of-pocket maximum every year.

John Earley worries he may be one of them. Earley, 60, has severe plaque psoriasis, a condition that causes painful, itchy red patches on his skin.

After he was diagnosed more than 30 years ago, topical creams and ultraviolet light treatments that slow the growth of skin cells worked for a while. But eventually their effectiveness waned. He finally found relief with Humira, a biologic drug that blocks the production of an immune system protein that causes inflammation. The twice monthly injections cost more than $2,200, but the Texas high-risk pool through which Earley and his wife are insured covers the drug with a $100 copayment. The drug’s manufacturer, AbbVie, covers all but $5 of that amount through its patient assistance program. Their insurance premium is $1,460 per month.

With the Texas high-risk pool set to close early next year, Earley, who works on contract as an architect in Arlington, is checking into plans on the health insurance marketplace. The plan with the best Humira coverage—a $150 copay per refill—is a gold plan with a $1,718 monthly premium for the two of them, says Earley. Plans with lower premiums would require 40 to 50 percent coinsurance for the drug, which is in a high-cost specialty tier.

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