Patients who have no private insurance pay far less out of pocket per year for biologics than patients who have private insurance. Here’s why:
The Trillium Drug Program and the EAP are supposed to step in when private insurance will not cover the cost of drugs. However, the way the system is set up now, it makes sense for many patients who are eligible for private drug coverage to avoid using it altogether if the plans available to them cover only a small proportion of their drug costs — as is often the case with biologics. In effect, EAP delays in processing claims end up passing thousands of extra dollars in insurance costs to the government, costs that could be covered by the private sector. Here’s how it works:
Many group insurance plans have a yearly maximum limit that is far lower than the cost of biologics. This means that, for many patients, even if they have insurance plans that cover biologics, once a patient’s medication costs exceed the maximum limit for their insurance company, he or she is not covered for that extra amount. The extra amount is often in the tens of thousands of dollars per year. For instance, if a patient has insurance that covers $5,000 of medication per year, and that patient’s medication costs $35,000 per year, the patient is still not covered for $30,000 of medication by private insurance and requires the EAP to cover that $30,000 of drug costs.
Now, if a patient does not have any private insurance, and he or she goes to the pharmacy to purchase a dose of medication (e.g. Remicade, which costs around $4,000 per dose), and EAP coverage is in effect, the patient pays all or part of his or her Trillium deductible for the quarter. (The deductible is calculated based on the patient’s household income, and is generally around 4% of the household income per year (see page 5)). However, if the patient has had coverage from a private insurer during the Trillium Drug Program’s fiscal year, the patient has to provide Trillium with a letter from the insurer stating that he or she has used up all his or her drug coverage from that insurer, and has no other insurer, before Trillium and the EAP will pick up the tab. Considering that it can take weeks for a private insurer to issue such a letter, and months for Trillium to process it, a biologics patient can easily be out of pocket around $8,000-$12,000 before any reimbursement arrives. (This is a typical scenario, with 1 dose of Remicade every 8 weeks and a delay in paperwork that takes 6 months). This scenario also assumes that Trillium and the EAP did not lose any paperwork. The best way to prevent the loss of paperwork and further delays in reimbursement is to send documentation by registered mail, which adds around $9 to each receipt sent to the EAP.
In other words, patients who have no private insurance pay far less out of pocket per year for biologics than patients who have private insurance, unless the private insurance plan covers 100% or almost 100% of the cost of the biologics.
Again, patients on biologics already are fighting serious disease, and often are not able to earn the same amount per year as their healthy counterparts. The requirement to have an extra $10,000 or so each year to loan interest-free to the government while it sorts out paperwork is a strong disincentive for patients on biologics to use a group insurance plan. Ultimately, this dysfunctional system costs both patients and other taxpayers more money (and causes more stress) a better-organized system would do. Streamlining the paperwork required for patients already on biologics to renew their EAP coverage would do a lot to allow them to make use of whatever private insurance coverage is available to them, reducing the costs passed on to taxpayers.