Bill to cap co-payments for drugs is backed by emotional testimony, but opposed by health insurers and employer groups

By Melissa Patrick
Kentucky Health News

FRANKFORT, Ky. -- People with chronic conditions are often denied the best medication for their condition because it is not on their insurance plan's preferred formulary, which makes the co-payment more for that medication than they can afford.

Sen. Tom Buford

Senate Bill 31, sponsored by Tom Buford, R-Nicholasville, would put a $100-per-month cap on co-payments for a 30-day supply of a medication for drugs subject to a tiered formulary, and not to exceed $200 per month total for all medications. House Bill 146, sponsored by Rep. James Kay, D-Versailles, has a similar bill that is currently in the House Banking and Insurance committee.

The Senate Health and Welfare Committee heard discussion on this bill Feb. 25, which opened with an impassioned plea from Buford to pass it. He said 18 states have passed or are in the process of passing similar bills. But they face strong opposition from the insurance industry and employers, and the bill has been on the committee agenda "for discussion only."

Buford said insurance companies have avoided big increases in premiums by raising co-payments, "which have gone over 54 percent and some 80 percent." Saying the average salary of Kentuckians is $23,700, he said many have to chose between living expenses and paying for medicine. "You may have insurance, but you may not have health care," he said.

The state Department of Insurance estimates that the bill would increase premiums by $3.20 to $4 per month and, because of greater utilization of services, raise the ultimate health-care costs of all insured Kentuckians (except those on state plans) by $2.58 to 3.23 per month.

Buford disputed the estimate, saying it essentially comes from the insurance industry. He acknowledged that capping co-pays would raise costs, but said the increase could be modest. He said that after Vermont passed a cap, the cost averaged only 32 cents per month per member for large-group plans and 74 cents per month for small-group plans.

Tom Underwood, state director of the National Federation of Independent Business, said the bill would primarily affect small-group employers, partly because small businesses have no power to negotiate with insurance companies.

Julie Davis of Glasgow, who has epilepsy, told the committee that she was forced to switch insurance this year, and a $60-per-month medication that she had been taking for seizures now cost $1,200 per month. She said they made her switched to a generic medicine, against the advice of her neurologist, and since has had her first breakthrough seizure in two and one-half years.

Getting emotional, Davis said that when she has such seizures, "I am out of commission for almost a month" and this has forced her to give up a job that she loved, move in order to be closer to a support group, and only allows her to work from home. She also said that at times she "fears for her life," and her insurance company has denied her appeals.

Deb McGrath of the Epilepsy Foundation said it had found that the most commonly prescribed and effective epilepsy drugs are on the non-preferred list of the "silver" plans on the state health-insurance exchange, the most common type of plan. A patient must pay a 40 percent co-insurance or a high deductible plus a co-pay to get a preferred drug on these plans.

She said the U.S. Department of Health and Human Services has called the practice of limiting coverage and imposing high cost-sharing for drugs that treat certain conditions "discriminatory."

McGrath said, "These barriers make it impossible, near impossible, for individuals, for those living with chronic health conditions like epilepsy, like arthritis, Alzheimers, crones disease, diabetes, and AIDS access to care that they desperately need."

Carl Breeding, a lobbyist for American Health Insurance Plans, gave the committee a letter from the Insurance Commissioner Sharon Clark, which he summarized as saying this bill would "prevent the state from being able to work" under federal health reform because of the way deductibles work and would "eliminate the bronze plan," the lowest-cost plan.
But Mark Guimond, a lobbyist for the Arthritis Foundation, said the lack of co-pay caps can increase costs because the resulting lack of medication can lead to hospitalizations, surgeries and time off work. "These are extremely expensive medications: $1000, $2000, $3000 a month," Guimond said, and patients "are being stuck with co-pays or co-insurance that may be 30-40-50 percent of these amounts."

The Kentucky Association of Manufacturers, which opposes the bill, wrote in the Lexington Herald-Leader that "These increased costs take away capital that state manufacturers could otherwise deploy to reinvest in their plants and more importantly remain competitive globally, so that we can continue to employ hard-working Kentuckians."

In animated remarks to the committee, Buford replied, "I hate to say this, but I could care less if we beat Japan in making toys if it depends on someone's life and health and the ability for them to live. It's more important apparently for some to deny the insurance than it is to make that profit on the bottom line of their company."

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