Issue:  Vol. 48 / No. 3 / 18 January 2018

Kaiser changes HIV drug coverage


Kaiser has changed some of its prescription coverage for HIV medications. Photo: Rick Gerharter
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People living with HIV/AIDS and advocates are concerned about increased costs for medications since Kaiser Permanente and other insurers have begun requiring people to pay a percentage of the cost of their drugs, rather than a copay amount.

Larry Hickey, chief financial officer for Steamworks, pointed to what's happening at his company as an example of the concerns caused by the change. Hickey filed a complaint with Kaiser earlier this month after learning of the practice.

In an interview, Hickey said an employee came to him after being "hit with a $900 bill for one month's supply" of HIV drugs.

Steamworks has one policy with Kaiser for its bathhouse in Berkeley and another for its office in San Francisco. In the Bay Area, the company has 36 employees, with 28 on the Kaiser policies. Kaiser is one of the Bay Area's largest health insurers.

In 2014, there was a $35 copay for generic drugs and a $50 copay for brand name drugs for both policies.

The company renewed the plans for 2015, effective January 1. The copays remain, but "Kaiser created a new category called 'specialty drugs,' and instead of a copay, they have a 20 percent co–insurance [rate], which means each time someone fills a prescription of a specialty drug, they must pay 20 percent of the cost of that drug," said Hickey.

He calculated that 80 percent of brand name HIV drugs have been moved to the new tier.

"This is huge for these guys that are HIV-positive," Hickey, who doesn't know how many employees are living with HIV, said of the workers.

"Most of our employees at our Berkeley club are hourly employees," he said. "There's no way they can afford those kind of co-insurance" rates.

"We put them on a gold plan so this kind of thing would not happen," said Hickey referring to a copay plan with no deductible.

In an email exchange with the Bay Area Reporter , John Nelson, a spokesman for Kaiser Foundation Health Plan, said Kaiser's coverage includes "a specialty tier drug benefit design" that became effective January 1. Kaiser notified employer groups and members of individual plans of the change "in early December, during open enrollment," said Nelson.

Every other health plan in the state "moved to this benefit design last year," with coverage that started in 2014, he said.

Kaiser made the change "in order to align more closely with the standard plan designs offered in California. He said this means that outpatient specialty drugs will be subject to a coinsurance payment," which is "a percentage of the total cost" paid after deductibles.

"Coinsurance amounts range from 10 percent to 40 percent of specialty drug costs, depending on a member's plan," said Nelson.

Courtney Mulhern-Pearson, director of state and local affairs for the San Francisco AIDS Foundation, said she and other advocates started hearing from Kaiser patients about the changes in the last month, particularly as it relates to people who are interested in using Truvada for pre-exposure prophylaxis, commonly referred to as PrEP.

The treatment involves taking Truvada, which is manufactured by Gilead and costs thousands of dollars, once a day. The regimen has been shown to be effective at reducing HIV infection rates if used as prescribed.

Mulhern-Pearson said it's an "increasingly common practice" for companies to move drugs, including HIV and hepatitis C medications, to the specialty tier.

Asked whether Steamworks would switch from Kaiser, Hickey said, "We certainly would evaluate that. We're going to have to do something for our guys." He added that it had only been a couple days since he'd learned of the change.

"My hope is that they will fix this problem and we won't have to," he added.

In response to a question about the chances of the change being dropped, so that HIV drugs and other medications are more affordable for patients, Nelson said, "It's a very good question, and one which many are looking into."

Covered California, the state health care exchange, "has convened a working group to look into the issue, with a report due to their board later this spring," he said.


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