Health Insurance Premium & Co-Pay Assistance

Transcription

1 Health Insurance Premium & Co-Pay Assistance Pg Service Category Definition Part B/DSHS State Services 1 Service Category Definition Part A 4 Feasibility of a Pilot Project Using Ryan White Health Insurance Funding to Assist Consumers Below 100% FPL with Purchasing Health Insurance RWPC, February 2015 Pilot Project Addendum: Impact of Co-Pay Assistance Programs (CAPs) on Pilot Project Cost 7 18 Pilot Project Addendum: Cost of Care for Hepatitis C 19 Health Insurance Assistance Satellite Program The Resource Group, October 2014 Interim Guidance to Texas Administrative Agents on Health Insurance Assistance Services DSHS, December Houston EMA Health Insurance Assistance & Advance Premium Tax Credit (APTC) Reconciliation RWGA, March % of Health Law Enrollees Receive Subsidies, White House Says NY Times, March The High Price Of Affordable Medicine Forbes, March J:\Committees\Quality Assurance\FY16 How To Best\Workgroups\Workgroup 2\TOC - WG2.doc

2 Page 1 of 59 Local Service Category: Amount Available: Budget Requirements or Restrictions (TRG Only): Local Service Category Definition: Target Population (age, gender, geographic, race, ethnicity, etc.): Services to be Provided: Service Unit Definition (TRG Only): Financial Eligibility: Client Eligibility: Agency Requirements (TRG Only): Health Insurance Premium and Cost Sharing Assistance To be determined Contractor must spend no more than 20% of funds on disbursement transactions. The remaining 80% of funds must be expended on the actual cost of the payment(s) disbursed. ADAP dispensing fees are not allowable under this service category. Health Insurance Premium and Cost Sharing Assistance: The Health Insurance Premium and Cost Sharing Assistance service category is intended to help HIV positive individuals continue medical care without gaps in health insurance coverage or discretion of treatment. A program of financial assistance for the payment of health insurance premiums and copays, co-insurance and deductibles to enable eligible individuals with HIV disease to utilize their existing third party or public assistance (e.g. Medicare) medical insurance. Agency may provide help with client copayments, co-insurance, deductibles, and Medicare Part D premiums in amounts up to $ per month. Co-Payment: A cost-sharing requirement that requires the insured to pay a specific dollar amount for each unit of service. Co-Insurance: A cost-sharing requirement that requires the insured to pay a percentage of costs for covered services/prescription Deductible: A cost-sharing requirement that requires the insured pay a certain amount for health care or prescription, before the prescription drug plan or other insurance begins to pay. Premium: The amount paid by the insured to an insurance company to obtain or maintain and insurance policy. All Ryan White eligible clients with 3 rd party insurance coverage (COBRA, private policies, Qualified Health Plans, CHIP, Medicaid, and Medicare) within the Houston HSDA. Contractor may provide assistance with: Insurance premiums up to the DSHS annual cap (HIV/STD Policy ), And deductibles, co-insurance and/or co-payments up to $ per month. A unit of service will consist of payment of health insurance premiums, copayments, co-insurance, deductible, or a combination. At or below 500% of federal poverty guidelines. HIV positive resident of HSDA, and have insurance or be eligible to purchase a Qualified Health Plan through the Marketplace. Agency must: Provide a comprehensive financial intake/application to determine

3 Page 2 of 59 Special Requirements (TRG Only): client eligibility for this program to insure that these funds are used as a last resort in order for the client to utilize his/her existing insurance or be eligible to purchase a qualified health plan through the Marketplace. Must comply with DSHS policy including tracking of annual caps. This policy states that, for Premium Assistance, an individual cannot receive assistance greater than the annualized Texas Health Insurance Risk Pool Monthly premium total. Please refer to the table at Clients will not be put on wait lists nor will Health Insurance Premium and Cost Sharing Assistance services be postponed or denied due to funding without notifying the Administrative Agency. Conduct marketing in-services with Houston area HIV/AIDS service providers to inform them of this program and how the client referral and enrollment processes function. Establish formal written agreements with all Houston HSDA Ryan White-funded (Part A, B, C, D) primary care, mental health and substance abuse provider agencies to enable clients of these agencies to enroll in Health Insurance assistance at his/her primary care, mental health or substance abuse provider site. (i.e. No need for client to physically present to Health Insurance provider.) Utilizes the RW Planning Council-approved prioritization of cost sharing assistance when limited funds warrant it. o Priority Ranking of Requests (in descending order): HIV medication co-pays and deductibles (medications on the Texas ADAP formulary) Non-HIV medication co-pays and deductibles Co-payments for provider visits (eg. physician visit and/or lab copayments) Medicare Part D (Rx) premiums Utilizes the RW Planning council approved consumer out-ofpocket methodology. Must comply with the Houston EMA/HSDA Standards of Care and, pending the most current DSHS guidance, client must: Purchase Silver Level Plan with formulary equivalency Take advance premium credit No assistance for Out of Network Out of Pocket expenses without prior approval of the Administrative Agent. Must comply with DSHS Interim Guidance. Must comply with updated guidance from DSHS.

4 Page 3 of 59 FY 2016 RWPC How to Best Meet the Need Decision Process Step in Process: Council Recommendations: Approved: Y: No: Approved With Changes: Date: 06/11/2015 If approved with changes list changes below: Step in Process: Steering Committee Recommendations: 1. Approved: Y: No: Approved With Changes: Date: 06/07/2015 If approved with changes list changes below: Step in Process: Quality Assurance Committee Recommendations: 1. Approved: Y: No: Approved With Changes: Date: 05/21/2015 If approved with changes list changes below: Step in Process: HTBMTN Workgroup #2 Recommendations: Financial Eligibility: Date: 04/14/

5 Page 4 of 59 FY 2015 Houston EMA/HSDA Ryan White Part A/MAI Service Definition Health Insurance Co-Payments and Co-Insurance Assistance (Revision Date: 03/27/15) HRSA Service Category Health Insurance Premium and Cost Sharing Assistance Title: Local Service Category Health Insurance Co-Payments and Co-Insurance Title: Budget Type: Hybrid Fee for Service Budget Requirements or Restrictions: Agency must spend no more than 20% of funds on disbursement transactions. The remaining 80% of funds must be expended on the actual cost of the payment(s) disbursed. HRSA Service Category Definition: Local Service Category Definition: Health Insurance Premium & Cost Sharing Assistance is the provision of financial assistance for eligible individuals living with HIV to maintain a continuity of health insurance or to receive medical benefits under a health insurance program. This includes premium payments, risk pools, co-payments, and deductibles. A program of financial assistance for the payment of health insurance premiums, deductibles, co-insurance and co-payments to enable eligible individuals with HIV disease to utilize their existing third party or public assistance (e.g. Medicare) medical insurance. Agency may provide help with client premium, co-payments, coinsurance and deductibles in amounts up to $ per month. Co-Payment: A cost-sharing requirement that requires the insured to pay a specific dollar amount for each unit of service. Co-Insurance: A cost-sharing requirement that requires the insured to pay a percentage of costs for covered services/prescription Deductible: A cost-sharing requirement that requires the insured to pay a certain amount for health care or prescription, before the prescription drug plan or other insurance begins to pay. Premium: The amount paid by the insured to an insurance company to obtain or maintain and insurance policy. Target Population (age, gender, geographic, race, ethnicity, etc.): Services to be Provided: Service Unit Definition(s): (RWGA only) Financial Eligibility: Client Eligibility: All Ryan White eligible clients with 3 rd party insurance coverage (COBRA, private policies, Qualified Health Plans, CHIP, Medicaid and Medicare) within the Houston EMA. Provision of financial assistance with co-payments, co-insurance and deductibles up to $ per month per client. 1 unit of service = A payment of a premium, co-payment or deductible for an HIV-infected person with insurance coverage. Refer to the RWPC s approved Financial Eligibility for Houston EMA Services. HIV-infected individuals residing in the Houston EMA meeting financial eligibility requirements and have insurance or be eligible to purchase a Qualified Health Plan through the Marketplace.

6 Page 5 of 59 Agency Requirements: Staff Requirements: Special Requirements: Agency must: Currently administer a HIV/AIDS insurance assistance program utilizing Ryan White Program funding in the Houston EMA/HSDA. Provide a comprehensive financial intake/application to determine client eligibility for this program to insure that these funds are used as a last resort in order for the client to utilize his/her existing insurance or be eligible to purchase a qualified health plan through the Marketplace. Ensure that assistance provided to clients does not duplicate services already being provided through Ryan White Part B or State Services. The process for ensuring this requirement must be fully documented. Have mechanisms to vigorously pursue any excess premium tax credit a client receives from the IRS upon submission of the client s tax return for those clients that receive financial assistance for eligible out of pocket costs associated with the purchase and use of Qualified Health Plans obtained through the Marketplace. Conduct marketing with Houston area HIV/AIDS service providers to inform such entities of this program and how the client referral and enrollment processes function. Marketing efforts must be documented and are subject to review by RWGA. Clients will not be put on wait lists nor will Health Insurance Premium and Cost Sharing Assistance services be postponed or denied without notifying the Administrative Agency. Establish formal written agreements with all Houston HSDA Ryan White-funded (Part A, B, C, D) primary care, mental health and substance abuse provider agencies to enable clients of these agencies to enroll in Health Insurance assistance at his/her primary care, mental health or substance abuse provider site. (i.e. No need for client to physically present to Health Insurance provider.) Utilize RWGA approved prioritization of cost sharing assistance, when limited funds warrant it. Utilize consumer out-of-pocket methodology approved by RWGA. None Agency must: Comply with the Houston EMA/HSDA Standards of Care

7 Page 6 of 59 FY 2016 RWPC How to Best Meet the Need Decision Process Step in Process: Council Recommendations: 1. Approved: Y: No: Approved With Changes: Date: 06/11/2015 If approved with changes list changes below: Step in Process: Steering Committee Recommendations: 1. Approved: Y: No: Approved With Changes: Date: 06/07/2015 If approved with changes list changes below: Step in Process: Quality Assurance Committee Recommendations: 1. Approved: Y: No: Approved With Changes: Date: 05/21/2015 If approved with changes list changes below: Step in Process: HTBMTN Workgroup Recommendations: Financial Eligibility: Date: 04/14/

8 Page 7 of 59 Approved Feasibility of a Pilot Project Using Ryan White Health Insurance Funding to Assist Consumers Below 100% FPL with Purchasing Health Insurance A Special Study of the Houston Area Ryan White Planning Council Approved February 12, 2015

9 Page 8 of 59 Approved Acknowledgments The Houston Area HIV Services Ryan White Planning Council would like to thank the following individuals and agencies for their contribution to this Special Study. Comprehensive HIV Planning Committee Members Ted Artiaga Patient Navigator, Legacy Community Health Services Curtis Bellard Former Security Operations Manager, Omni Hotels David Benson Director of Programs & Special Programs, Harris County Precinct One Evelio Salinas Escamilla Research Administrator University of Houston School of Social Work; and Co-Chair, Comprehensive HIV Planning Committee Herman Finley Health Education Risk Reduction Coordinator, St. Hope Foundation, Inc.; and Vice-Chair, Houston Area HIV Services Ryan White Planning Council Morenike Giwa Founder, Advocacy without Borders Tam Kiehnhoff Former Case Management Coordinator, Triangle Area Network John Lazo Producer, Standing Room Only Productions Osaro Mgbere, PhD Epidemiologist, Houston Department of Health and Human Services Nancy Miertschin HIV Projects Manager, Thomas Street Health Center; and Co-Chair, Comprehensive HIV Planning Committee Allen Murray External Member, Comprehensive HIV Planning Committee Shital Patel, MD Assistant Professor, Baylor College of Medicine L. Bunny Woods Counseling, Testing, and Referral Coordinator, St. Hope Foundation Amana Turner Program Coordinator, Change Happens Staff Ryan White Planning Council Office of Support Tori Williams Amber Alvarez Diane Beck Georgette L. Monaghan Key Informants Katy Caldwell Executive Director, Legacy Community Health Services Orlando Dawson Nurse, St. Hope Foundation Joseph Fuentes, Jr. CEO, Houston Area Community Services, Inc. Melisa Garcia Vice President of Clinical Business Services, Legacy Community Health Services Sandra Longoria Director of Financial Services, Legacy Community Health Services Kenneth Malone HIV Project Analyst, HIV Services Administration, Thomas Street Health Center Jack Parker Vice President of Pharmacy Operations, Legacy Community Health Services Ann Robbins, PhD Senior Public Health Advisor, TB/ HIV/STD Unit, Texas Department of State Health Services Shannon Schrader, MD Concierge Physician, MDVIP; and Volunteer Physician, Legacy Community Health Services Janina Vazquez Manager, HIV Care Services Group, Texas Department of State Health Services Funding acknowledgment: The development of this document was made possible by funding from the Ryan White HIV/AIDS Treatment Extension Act of No incentives were provided for this study.

10 Page 9 of 59 Approved Background The Houston Area Ryan White Planning Council (RWPC) is a volunteer planning group comprised of 38 appointed community members charged with planning, designing, and allocating funding for HIV medical care and support services for people living with HIV/AIDS in the six-county Houston Eligible Metropolitan Area (EMA). To inform these processes, the RWPC conducts a community needs assessment every three years that measures and describes the HIV medical care and support service needs of the local HIV-positive community. In addition to capturing data related to service needs and barriers, the 2014 Houston Area HIV/AIDS Needs Assessment serves as a tool to evaluate consumer knowledge about services, engagement along the HIV Care Continuum (including a profile of those with unmet need), and co-occurring medical conditions and social determinants of health. The RWPC s Comprehensive HIV Planning Committee commissions Special Studies to complement and contextualize the wealth of information gathered through the community needs assessment process, and to bridge the gap in data between community needs assessments. Past Special Studies have examined service needs among special demographic populations such as people living with HIV/AIDS in the Houston EMA who are transgender/gender non-conforming, youth, or incarcerated/recently released. Following the first Affordable Care Act Health Insurance Marketplace Open Enrollment period, the Comprehensive HIV Planning Committee directed the RWPC Office of Support to conduct two Special Studies in 2014 pertaining to health insurance. This report details the key findings from the Special Study Feasibility of a Pilot Project Using Ryan White Health Insurance Funding to Assist Consumers Below 100% FPL with Purchasing Health Insurance. Introduction The Patient Protection and Affordable Care Act (ACA) brought about extensive changes for uninsured and under-insured people living with HIV/AIDS (PLWHA). Guaranteed issue prevented insurers from denying coverage for people with a pre-existing condition like HIV. Community rating prohibited insurers from charging people with pre-existing conditions more for health coverage. The ACA also eliminated lifetime and annual coverage limits on essential health benefits. More recent changes like the Health Insurance Marketplace and Medicaid expansion have altered the PLWHA in many states access health care. State health insurance exchanges and the federal Health Insurance Marketplace provide locations for people to shop for qualified health plans (QHPs) that meet their needs and budgets. People with annual incomes between 100% and 400% of the Federal Poverty Level (FPL) who have no existing coverage can qualify for an advance premium tax credit (subsidy) to help cover their monthly insurance premium payments. In states that have chosen to expand their Medicaid programs, people with annual incomes at 133% and below are now eligible to apply for Medicaid coverage. However, in states that have not expanded their Medicaid programs, uninsured individuals with incomes too low to qualify for subsidies to purchase Health Insurance Marketplace QHPs and who do not meet other eligibility requirements for Medicaid have limited options for obtaining health coverage. In Texas, an estimated 948,000 individuals (including PLWHA) fall into this Medicaid coverage gap, and Ryan White programs throughout the state Page 3 of 11

11 Page 10 of 59 Approved often provide care and support services to PLWHA in the Medicaid coverage gap as the payer of last resort. 1 Between March 2013 and February 2014, nearly 70% of Ryan White consumers in the Houston Area had annual incomes below 100% FPL. 2 Of these consumers, only 32% had health coverage. This means that 5,562 local Ryan White consumers (48% of all local Ryan White consumers) were uninsured, and not eligible for a Health Insurance Marketplace subsidy due to low income. In addition to relying on Ryan White funded care and support services to treat their HIV, these consumers have limited access to medical care for other co-occurring conditions. Amid questions of whether the Texas HIV Medication Program (THMP), the AIDS Drug Assistance Program (ADAP) for the state of Texas, would offer reimbursement to local programs for purchasing QHPs for uninsured consumers below 100% FPL, this Special Study was commissioned to evaluate whether a pilot project to purchase Health Insurance Marketplace QHPs and cover cost-sharing expenses such as co-pays, co-insurance and deductibles for 100 uninsured consumers below 100% FPL for one year would be feasible and cost-effective. Methodology Unlike past studies, this Special Study did not include client-level data collection. The feasibility of the proposed pilot project was evaluated using a brief literature review, semistructured key informant interviews with 10 stakeholders conducted in October 2014, and cost analyses using unsubsidized 2015 Marketplace Silver plans accessed through the federal Health Insurance Marketplace website to populate a feasibility framework. 3 The TELOS feasibility framework was used to develop key informant interview questions, and to categorize findings into specific domains. The acronym TELOS describes Technical/Technological, Economic, Legal, Operational, and Schedule considerations for project feasibility. To determine likelihood that the proposed pilot project will result in cost-neutrality or cost-savings, greater emphasis has been placed on assessing economic feasibility. Limitations In general, feasibility studies are not intended to determine whether a particular program or project should be implemented, or forecast program or project outputs and outcomes. The function of feasibility studies is to inform the decision-making and planning processes through describing the components that must be present to initiate and complete a proposed program or project. As such, this Special Study is only one of many tools to be used in determining whether and how the proposed pilot project should be implemented. Though the cost analyses presented in this report were conducted across four distinct QHPs, the cost variability between plans and consumers is another limitation of this Study. For example, premium and cost-sharing assistance within the same QHP can vary greatly depending on the formulary tiers of the consumer s medications. The actual cost of the pilot could vary considerably, which accounts for the wide cumulative estimated cost range for the pilot provided in the findings of this report. Page 4 of 11

12 Page 11 of 59 Approved Finally, the impact of ADAP was not included in the calculations of the local Ryan White program costs for covered service categories, the estimated cost of the pilot per consumer, and for the project as a whole. In the event that ADAP offers reimbursement to local programs for premium and cost-sharing assistance for unsubsidized Health Insurance Marketplace QHPs future, the total cost of the pilot project would be substantially reduced. At the time of this report was created, ADAP has not offered reimbursement to local programs for premium and cost-sharing assistance for Health Insurance Marketplace QHPs. Findings Technical/Technological Feasibility No technical/technological barriers to pilot project implementation were found in the Study. A benefit to the current activities of Ryan White-funded providers to assist subsidy-eligible consumers with purchasing and sustaining health insurance is that no additional technical/technological infrastructure or resources would be required to implement the proposed pilot project. Computers with reliable internet access and phone lines are already available and used to assist consumers with the enrollment process. Moreover, current software used for billing and statement processing can be applied to premium and cost-sharing assistance for consumers with unsubsidized Health Insurance Marketplace QHPs. Economic Feasibility Many factors were considered in evaluating the economic feasibility of the pilot project, including current costs to the local Ryan White program for covered services, premium and costsharing assistance estimates for individual participants across a variety of QHPs, estimated cumulative premium and cost-sharing assistance for the pilot, considerations for funding the administrative processes of the pilot project, and project sustainability. Under the ACA, all Health Insurance Marketplace QHPs must provide coverage for essential health benefits, which include ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care. 4 To evaluate the potential for costneutrality or cost-savings as a result of the pilot project, the average cost per unduplicated client (UDC) for covered services in the local Ryan White program were calculated in Table 1. These costs include services funded under Ryan White Parts A and B, MAI, and State Services, and exclude ADAP (See Limitations). Page 5 of 11

13 Page 12 of 59 Approved Table 1: Ryan White Program Average Costs per UDC by Covered Service Category in Primary Care $1,176 Local Pharmacy Assistance Program (LPAP) $722 Medical Nutrition Therapy (supplements) $582 Mental Health Therapy and Counseling $803 Substance Abuse Treatment (outpatient) $2,179 Total average cost per UDC for all covered services $5,462 The total average cost per UDC to the local Ryan White program in 2013 for services that would be covered as essential health benefits under Health Insurance Marketplace QHPs was $5,462. It is important to note that actual cost and service utilization for individual consumers varied in relation to the needs of the consumer. Two key informants interviewed for this Study estimated the total premium and cost-sharing assistance for a consumer below 100% FPL to range between $10,000 and $11,000 annually for unsubsidized 2014 Health Insurance Marketplace QHPs. To assess estimated costs using 2015 QHPs available locally, cost analyses were conducted for four unsubsidized QHPs available in the Houston area. According to the Texas Department of State Health Services, the greatest proportion of PLWHA in the Houston EMA in 2013 were male and between the ages of 45 and 54, and it is estimated that between 50% and 70% of PLWHA smoke. 5, 6 For these reasons, premium and cost-sharing assistance estimates for the QHPs evaluated in this Study were calculated using cases in which the pilot participant was a 54 year-old male smoker who required either a low tier or a high tier medication. Unsubsidized Health Insurance Marketplace QHPs compared in this Study were categorized as High/Low Premium and High/Low Medication Co- Pay or Co-insurance. (For the full comparison of unsubsidized Health Insurance Marketplace QHPs evaluated in this Study, see Appendix.) The total annual premium and cost-sharing assistance amount per participant was calculated for: 12 months of premium payments, four infectious disease specialist visits, 4 lab tests, and 12 months of medications. Comparisons were also made for high and low tier medications according to each plan s formulary. Excluding multiple medications and non-hiv related care, the estimated total annual premium and cost-sharing amount per participant ranged between $6,636 and $15,134. Health Insurance Marketplace health maintenance organization (HMO) QHPs tended to have lower premiums and lower total annual costs, even for cases in which the participant required a higher tier medication. The formularies for these QHPs listed most commonly prescribed antiretroviral (ARV) medications, including single-tab regimens, as mid-tier or low tier. However, the HMO QHPs examined greatly restricted the number of in-network infectious disease specialists that would be accessible to the pilot participants. For example, participants receiving assistance with purchasing the lower cost HMO QHPs would not be able to access providers through Harris Health System, including providers at Thomas Street Health Center. Page 6 of 11

14 Page 13 of 59 Approved Plans with higher premiums with both low and high medication co-pays/co-insurance were also examined. These QHPS tended to be preferred provider organization (PPO) plans, which would allow the pilot participant to access a larger network of infectious disease specialists. However, the PPO plans examined also had much higher premium payments, and one listed most commonly prescribed ARV medications as specialty tier, which require a very high coinsurance of 40%. The PPO QHP with the highest premium examined also had the lowest out-ofpocket limit, which included the prescription drug out-of-pocket limit. Based on the estimated total annual premium and cost-sharing assistance cost per participant, the cumulative estimated cost for the pilot to provide premium and cost-sharing assistance to 100 consumers by purchasing and sustaining unsubsidized Health Insurance Marketplace QHPs could range between $663,600 and $1,513,400 for one year. Excluding ADAP, the cumulative cost to the local Ryan White program to provide similar services covered under the plans would be $546,200 or lower, depending on service utilization. It is important to note that participants with unsubsidized Health Insurance Marketplace QHPs could access care for medical concerns beyond HIV care. Considering the cost of uncompensated care and avoidable hospitalization, there may be cost-neutrality or cost-savings outside the local Ryan White program for pilot participants. Further study is necessary to determine whether local partnerships with facilities that would benefit from reduced uncompensated care and avoidable hospitalization costs, including partnerships with facilities receiving funding through the 1115 Waiver Texas Healthcare Transformation and Quality Improvement Program, would result in lower costs for the pilot project through cost-sharing. In addition to the estimated cumulative annual premium and cost-sharing assistance cost for the pilot project, funding for administrative processes may be required. In the event that the pilot is scheduled to begin during an Open Enrollment period, additional personnel may be required to assist the 100 pilot participants with Health Insurance Marketplace enrollment. Funding for personnel to communicate with participants, process statements, and issue payments would also be needed to carry out the pilot project may be difficult to obtain, as restrictions may prevent the use of Ryan White funds for any administrative costs outside of the premium payment of the health plans. 7 The final consideration for economic feasibility is project sustainability. The function of the proposed pilot project is to determine whether providing premium and cost-sharing assistance for unsubsidized Health Insurance Marketplace plans to consumers below 100% FPL provides enough cost-neutrality or cost-savings and benefit to the consumers to warrant program-wide implementation. Should the outcomes of the pilot project indicate that program-wide implementation is not beneficial, pilot participants would experience a loss of health coverage at the conclusion of the project (see Legal Feasibility). If project outcomes indicate program-wide implementation would be beneficial, the present level of funding is unlikely to accommodate premium and cost-sharing assistance to the over 5,500 local consumers who potentially fall in the Medicaid gap. Page 7 of 11

15 Page 14 of 59 Approved Legal Feasibility The Study found no legal or policy barriers to implementation of the pilot project. Policy guidance from Health Resource Service Administration s (HRSA) HIV/AIDS Bureau (HAB) supports the use of Ryan White funding for premium and cost-sharing assistance for individuals who are ineligible for subsidy when doing so would be cost-effective. According to a HAB Policy Clarification Notice released in 2013 and revised in 2014: If resources are available, [Ryan White HIV/AIDS Program (RWHAP)] grantees and subgrantees are strongly encouraged to use RWHAP funds for premium and cost-sharing assistance for [clients not eligible for premium tax credits and cost-sharing reductions in a Health Insurance Marketplace] when it is cost-effective, as appropriate. The grantee and subgrantee must ensure that use of RWHAP funds for premium and cost-sharing assistance for these clients is cost-effective. 7 Though there are no legal or policy barriers to implementation of the pilot project, consideration must be made to ensure informed consent is obtained from participants before acceptance into the pilot. In the event that the pilot project is not cost-effective, pilot participants would lose health coverage at the conclusion of the project. While this may have a minimal impact for participants HIV care among participants that retain their providers when beginning their Health Insurance Marketplace QHPs, loss of coverage may present a substantial barrier to accessing providers for non-hiv related medical conditions. Operational Feasibility Certified Application Counselors at Ryan White funded sites currently assist subsidy-eligible consumers with enrollment in the Health Insurance Marketplace. While the process of assisting 100 consumers below 100% FPL with enrollment would not differ from the current method, an additional Certified Application Counselor could be required to assist with enrollment if the pilot project takes place during an Open Enrollment period (see Schedule Feasibility). Additional administrative needs for premium and cost-sharing assistance processing may present a challenge to implementing the pilot project. Personnel would be needed for communication with pilot participants, receiving and processing statements, and issuing payments to insurers. One key informant that currently issues premium payments to insurers noted that the current process entails issuing individual payments for each consumer because most insurers will not accept mass third-party payments. Funding may not be available to provide additional administrative personnel (see Economic Feasibility). Schedule Feasibility While this Study yielded no barriers to schedule feasibility, there were certain aspects of scheduling the pilot project s implementation and funding that require consideration. As purchase of Health Insurance Marketplace QHPs can only occur during an Open Enrollment period, the pilot project would need to be scheduled to begin during an Open Enrollment period, or be limited to consumers with life-changing events that qualify the participants for a Special Enrollment Period, such as loss of health coverage, marriage or divorce, birth or adoption, a Page 8 of 11

16 Page 15 of 59 Approved death in the household, change in income, moving outside the current plan s coverage area, gaining citizenship, or release from incarceration. If the pilot is scheduled to begin during an Open Enrollment period, funding for the project could span multiple fiscal years, and the earliest opportunity to begin the pilot project would be the Health Insurance Marketplace Open Enrollment period for coverage beginning in The pilot would also require sufficient funding to cover high deductible cost-sharing assistance during the first quarter of the calendar year. Alternate Pilot Project Though barriers to technical/technological, legal, operational, and schedule feasibility discovered in the course of this Study are minimal, substantial barriers to the economic feasibility of the pilot project may prevent implementation of the pilot project unless some amount of cost-sharing is obtained through a partnership or ADAP reimbursement. However, an unanticipated finding of this Study is that purchasing add-on dental plans for consumers already enrolled in subsidized Health Insurance Marketplace QHPs may result in cost-savings for the local Ryan White program in Oral Health services, clear system capacity, and expand consumer accessibility to a larger network of dental providers. In 2013, the local Ryan White program average cost per UDC for Oral Health services was $604. A query of subsidized Health Insurance Marketplace plans for a 54 year-old male who smokes yielded 30 available add-on dental plans with monthly premiums ranging from $9 to $51. A brief cost analysis was conducted for a high coverage dental HMO with a $15 monthly premium. Plan: Alpha Dental Individual & Family DeltaCare USA Preferred Plan for Families Dental HMO Monthly Premium: $15 x 12 payments $180 Deductible: $0 Out of Pocket Maximum: None for adults age 19 and over 2 annual cleanings ($5 Office Visit Co-Pay; $5 Prophylaxis (Cleaning) Co-Pay): $10 x 2 cleanings $20 Annual X-rays ($5 Panoramic X-ray (Every 2-5 Years); No Cost for Bitewing X-rays): $5 x 1 X-ray $5 3 Amalgam Fillings: $25/1 Surface; $30/2 Surface; $40/3 Surface x 3 Fillings + $5 Office Visit $80-$125 1 Extraction ($18): $18 + $5 Office Visit $23 Total Cost: $308 -$353 Though the proposed alternate pilot project would not address access to health coverage for consumers in the Medicaid gap, purchasing add-on dental plans for consumers enrolled in subsidized Health Insurance Marketplace QHPs could provide cost-savings and added benefits for consumers. Further study is needed to develop a more detailed estimate of potential costsavings, identify plans that cover commonly utilized dental services within the Oral Health service category and have Ryan White-funded providers in-network, and assess whether providers in the community that are not funded through the local Ryan White program could adequately address the unique dental care needs of PLWHA. Page 9 of 11

17 Page 16 of 59 Approved References 1. Garfield, R et al., The Coverage Gap: Uninsured Poor Adults in States that Do Not Expand Medicaid An Update, The Henry J. Kaiser Family Foundation, (November 12, 2014) 2. Ryan White Grant Administration and The HIV Resource Group, FY15 How to Best Meet the Need Service Utilization Presentation, (Presented April 7, 2014) Texas Department of State Health Services HIV/STD Prevention and Care Branch, Planning and Program Evaluation Group Data Team, HIV Prevalence , (Received July 31, 2014) 6. U.S. Department of Health and Human Services, Health Resources and Services Administration, Guide for HIV/AIDS Clinical Care 2014 Edition. Rockville, MD: U.S. Department of Health and Human Services, (2014) 7. HRSA/HAB, Clarifications Regarding Use of Ryan White HIV/AIDS Program Funds for Premium and Cost-Sharing Assistance for Private Health Insurance Policy Clarification Notice (PCN) #13-05, (Revised June 6, 2014) Page 10 of 11

18 Page 17 of 59 Approved Appendix Plan 1: Molina Marketplace Molina Marketplace Silver 250 Plan HMO Low premium, high medication copay/co-insurance Annual Total Premium and Cost-Sharing Assistance Estimate Plan 2: Blue Cross and Blue Shield of Texas Blue Advantage Silver HMO 004 Low premium, low medication copay/ co-insurance Plan 3: Cigna Healthcare mycigna Copay Assure Silver Plan High premium, high medication copay/co-insurance Plan 4: Assurant Health Assurant Health Silver Plan 001 High premium, low medication copay/co-insurance Monthly Premium: $453 x 12 payments $5,436 Monthly Premium: $575 x 12 payments $6,900 Monthly Premium: $732 x 12 payments $8,784 Monthly Premium: $866 x 12 payments $10,392 Deductible: $0 Deductible: $3,000 Deductible: $0 Deductible: $3,500 OOP * Maximum: $6,600 OOP * Maximum: $6,350 OOP * Maximum: $6,350 OOP * Maximum: $3,500 4 ID Specialist Co-Pays: $75 x 4 visits 4 ID Specialist Co-Pays: $50 x 4 visits 4 ID Specialist Co-Pays: $75 x 4 visits 4 ID Specialist Co-Pays: N/A $300 $200 $300 4 Lab Co-Pays ($30): $30 x 4 labs 4 Lab Co-Insurance (20%): $200 x 4 4 Lab Co-Insurance (40%): $200 x 4 4 Lab Co-Pays: N/A $120 labs at 20% $160 labs at 40% $320 Low Tier Medication High Tier Medication: Low Tier Medication High Tier Medication Low Tier Medication High Tier Medication Low Tier Medication: N/A High Tier Medication: N/A (Atripla) ($65): $65 x 12 months $780 (Intelence)(40%): $1,020 x 12 months at 40% $4,896 (Stribild) ($50): $50 x 12 months $600 (Fuzeon)($150): $150 x 12 months $1,800 ($25): N/A (Atripla)(40%): $1,800 x 12 months at 50% $8,640 Total Cost: $6,636 Total Cost: $10,752 Total Cost: $7,860 Total Cost: $9,060 Total Cost: N/A Total Cost: $15,134 Total Cost: $13,892 Total Cost: $13,892 Notes: Prescription drug OOP maximum included in OOP maximum; limited provider network with HMO (ex: participant would not be able to see a provider at Thomas Street Health Center); most commonly prescribed ARVs are mid-tier or lower Prescription drug OOP maximum included in OOP maximum; limited provider network with HMO (ex: participant would not be able to see a provider at Thomas Street Health Center); most commonly prescribed ARVs are mid-tier or lower Prescription drug OOP maximum included in OOP maximum; all commonly prescribed ARVs specialty tier medications according to plan formulary No charge on medications, PCP/Specialist visits, or labs after deductible is met; prescription drug OOP maximum included in OOP maximum; formulary covers most ARVs. * Annual Out of Pocket Maximum Page 11 of 11

19 Page 18 of 59 Addendum: Impact of Co-Pay Assistance Programs (CAPs) on Pilot Project Cost Plan 1: Molina Marketplace Molina Marketplace Silver 250 Plan HMO Low premium, high medication co-pay/coinsurance Plan 2: Blue Cross and Blue Shield of Texas Blue Advantage Silver HMO 004 Low premium, low medication co-pay/ coinsurance Plan 3: Cigna Healthcare mycigna Copay Assure Silver Plan High premium, high medication co-pay/coinsurance Plan 4: Assurant Health Assurant Health Silver Plan 001 High premium, low medication co-pay/coinsurance Total Cost without CAPs: $6,636 - $10,752 $7,860- $9,060 $15,134 $13,892 Total Cost with CAPs: $5,856-$6,030 $7,260-$8,460 All HIV medications are specialty tier (40% coinsurance). Though unlikely, CAPs could bring the annual cost as low as $6,494. No charge for medication met, which could bring the once $3,500 deductible is annual cost as low as $10,392 with CAPs. Plan does not cover: Tybost; Edurant; Combivir; Retrovir; Tivicay; Triumeq Plan Pros: Most commonly prescribed HIV medications are mid-tier or lower Plan Cons: Limited provider network with HMO (ex: participant would not be able to see a provider at Thomas Street Health Center) N/A Tybost; Combivir; Tivicay; Trizivir; Triumeq; Ziagen Most commonly prescribed HIV medications are mid-tier or lower Limited provider network with HMO (ex: participant would not be able to see a provider at Thomas Street Health Center) Trizivir; Triumeq; Ziagen N/A No charge on medications, PCP/Specialist visits, or labs after deductible is met; formulary covers most commonly prescribed HIV All commonly prescribed HIV medications are specialty tier medications according to plan formulary medications High premium may make plan cost-prohibitive J:\Committees\Comprehensive HIV Planning\old files\2014 Files\2014 Special Studies\Addendum - Impact of CAPs docx

20 Genotype 5: 12 weeks 1. Sovaldi daily ($84,000) 2. Ribavirin daily ($550-$850) 3. Peginterferon alfa weekly ($8,400) Page 19 of 59 Total Cost of HIV Care without CAPs**: Total Cost of HIV Care with CAPs: Regimens Covered Under Plan Formulary? Cost for Genotypes 1, 4, & 6 Cost for Genotype 2 $1,284-$5,400 to meet Cost for Genotype 3 $1,284-$5,400 to meet Cost for Genotype 5 $1,284-$5,400 to meet Deductible / OOP* met through HIV meds? Combination therapy regimens: Plan 1: Molina Marketplace Molina Marketplace Silver 250 Plan HMO Low premium, high medication co-pay/coinsurance Addendum: Cost of Care for Hepatitis C Plan 2: Blue Cross and Blue Shield of Texas Blue Advantage Silver HMO 004 Low premium, low medication co-pay/ coinsurance Plan 3: Cigna Healthcare mycigna Copay Assure Silver Plan High premium, high medication co-pay/coinsurance Plan 4: Assurant Health Assurant Health Silver Plan 001 High premium, low medication co-pay/coinsurance Deductible: $0 Deductible: $3,000 Deductible: $0 Deductible: $3,500 OOP * Maximum: $6,600 OOP * Maximum: $6,350 OOP * Maximum: $6,350 OOP * Maximum: $3,500 $6,636 - $10,752 $7,860- $9,060 $15,134 $13,892 $5,856-$6,030 $7,260-$8,460 All HIV medications are specialty tier (40% coinsurance). Though unlikely, CAPs could bring the annual cost as low as $6,494, depending on medication. No charge for medication once $3,500 deductible is met, which could bring the annual cost as low as $10,392 with CAPs. Harvoni Specialty (40% Co-Ins.) Sovaldi Specialty (40% Co-Ins.) Ribavirin Specialty (40% Co-Ins.) Peginterferon alfa Specialty (40% Co-Ins.) Harvoni- Specialty ($150 Co-Pay) Sovaldi Specialty ($150 Co-Pay) Ribavirin Specialty ($150 Co-Pay) Peginterferon alfa Specialty ($150 Co-Pay) Harvoni Specialty (40% Co-Ins.) Sovaldi Specialty (40% Co-Ins.) Ribavirin Non-preferred Generic ($25 Co-Pay) Peginterferon alfa Specialty (40% Co-Ins.) Without hep C CAPs With hep C CAPs Without hep C CAPs With hep C CAPs Without hep C CAPs With hep C CAPS: Without hep C CAPs With hep C CAPs $1,284-$5,400 to meet $15 $600 $20 $0 (OOP Max. met (OOP Max. met N/A N/A OOP Max. through HIV med.) through HIV med.) $154 $1,200 $475 $0 (OOP Max. met (OOP Max. met N/A N/A OOP Max. through HIV med.) through HIV med.) $1,284-$5,400 to meet $2,400 $1,095 $0 (OOP Max. met (OOP Max. met N/A N/A OOP Max. OOP Max. through HIV med.) through HIV med.) $1114 $1,800 $620 $0 (OOP Max. met (OOP Max. met N/A N/A OOP Max. through HIV med.) through HIV med.) Yes / No Yes / No Yes / Yes Yes / Yes Genotypes 1, 4, 6: 12 weeks 1. Harvoni daily ($94,500) Genotype 2: 12 weeks 1. Sovaldi daily ($84,000) 2. Ribavirin daily ($550-$850) Genotype 3: 24 weeks 1. Sovaldi daily ($168,000) 2. Ribavirin daily ($1,100-$1,700) Harvoni CAP: Pays up to 25% of catalog price (or $23, 625) up to 6 months; Client must pay $5 co-pay per fill Sovaldi CAP: Pays up to 25% of catalog price (or $21,000) up to 6 months; Client must pay $5 co-pay per fill Ribasphere (ribavirin): Pays up to $150; Client must pay $5 co-pay per fill Pegasys (peginterferon alfa): Pays 80% of co-pay up to $2,400; Client must pay the first $25 and 20% of co-pay *Out of Pocket Maximum **Co-pay Assistance Programs J:\Committees\Comprehensive HIV Planning\old files\2014 Files\2014 Special Studies\2014 Feasibility\Addendum - Hep C Cost of Care docx

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40 Page 39 of 59 Interim Guidance to Texas Administrative Agents on Health Insurance Assistance Services December 2014 Table of Contents Purpose... 2 Health Insurance Assistance in the ACA Era... 2 Understanding local insurance and clinical services costs... 2 Calculating the per client allocations for clinical services at an HSDA or Service Area... 2 Understanding local insurance costs... 2 Comparing the per client costs for covered clinical services to the costs for insurance... 3 Making Decisions about Health Insurance Assistance Services at the Client Level... 3 Special Enrollment Periods and COBRA... 3 Supporting Marketplace Plans... 3 Making Allocating and Budgeting Decisions for Insurance Assistance Services... 4 Components of Insurance Costs... 4 Ryan White Health Insurance Assistance Best Practice Recommendations... 5 Appendix A: Recommended Method for Calculating per Client Expected Direct Costs of Covered Clinical Services... 6 Appendix B: Average Health Insurance Costs in Texas, 2015 Plan Year... 8 Keep in Mind... 8 Reading the Tables... 8 Rating Area: Austin... 9 Rating Area: Dallas and Fort Worth... 9 Rating Area: El Paso Rating Area: Houston Rating Area: San Antonio Rating Area: Rest of Texas Comparisons of Rating Areas within Income Levels

41 Page 40 of 59 Purpose This interim guidance is provided while comprehensive DSHS policy and guidance on health insurance assistance, including guidance on allocations and budgeting for this category, is being prepared. This guidance applies to use of Ryan White Program(RWP) Part B funds and State Services (SS) funds contracted by the Department of State Health Services (DSHS). Health Insurance Assistance in the ACA Era Federal law and policy and state policy require that RWP Part B and SS funds be used as payment of last resort for eligible HIV-related services. Care standards currently require that each client be carefully assessed for eligibility for other health-related programs, including eligibility for Medicaid, Medicare, employer-based health insurance, and commercial insurance. This last group includes health plans available on through the Texas Marketplace. HRSA policy requires that enrollment in health insurance be vigorously pursued. This includes strong consideration of paying some or all of the costs of health insurance (including payment of premiums and/or copays and coinsurance) as an alternative to using RWP funds to pay directly for client service. Health insurance can offer a cost advantage for some clients, but it is not automatically the best alternative for every client. The changes in the availability of affordable insurance has implications for both allocations/budgeting for health insurance assistance services, and whether or not insurance is the best choice for an individual client. The information in this guidance should be considered when making allocations and budgeting for health insurance assistance at an administrative level. At the client level, when considering a client request for health insurance continuation services, staff must carefully consider the information in this guidance to help decide if paying health insurance costs though the RWP is an affordable and feasible alternative. Understanding local insurance and clinical services costs Insurance is preferred when it provides a cost advantage to delivering direct services. Understanding your expenditures for clinical services typically covered by insurance is critical for making allocations and for decisions about individual client coverage. You should not support requests for health insurance assistance if providing the assistance would result in a greater expenditure for the clinical services needed by the client. Calculating the per client allocations for clinical services at an HSDA or Service Area Health insurance will cover some but not all of the eligible RWP/SS services. It is a best practice to develop a local figure of the per client expected expenditures for covered clinical services. This gives an idea of the clinical costs that would be avoided by providing insurance assistance. We have attached a workbook to help with this calculation. You can calculate these costs for each HSDA or for your service area as whole. Instructions for the worksheet are in Attachment A. Understanding local insurance costs We have pulled information from the Texas Marketplace plans, and it is attached for your use. It provides the average premiums and maximum out of pocket costs for primarily Silver plans in the five health insurance rating areas where 85% of the persons with HIV live. We also include averages that can be used to estimate insurance 2

42 Page 41 of 59 costs for persons outside those areas - labeled "Area 26" in the attached materials. These average costs are adjusted for age and smoking status (which can increase premiums), and are shown for five different household income levels. These figures are explained in more detail in Appendix B. Comparing the per client costs for covered clinical services to the costs for insurance The workbook with your direct cost estimates also provides a format to compare the average costs for clinical services to the average insurance costs for an area. The worksheet for this comparison integrates ADAP costs with your local costs, and also provides a option to include an estimate of uncompensated care costs in your area. In state fiscal year 2014, the average ADAP expenditure on dispensed drugs was $5, Your local hospital district or agency that coordinates indigent care may have estimates of uncompensated care costs associated with HIV. Making Decisions about Health Insurance Assistance Services at the Client Level Until last year, our insurance assistance funds supported premiums and co-payments primarily for employerbased plans, which includes COBRA. Before extending assistance for employer-based insurance, please continue to consider not only the level of premium, but the cost-sharing and copayment requirements. Many employerbased plans have very high caps on out of pocket expenditures, meaning that even after the client fulfills her deductible, office visits and prescriptions will continue to require co-payments from the client. Understanding the requirements for co-payments and how those fit with local policies on caps and the client's ability to pay will help assure that there is an appropriate amount of money budgeted for that client. Special Enrollment Periods and COBRA The loss of employer-based insurance triggers a special enrollment period for the Marketplace, and your client will have 90 from the loss of her employer-based insurance to enroll on a Marketplace plan as an alternative to COBRA. When assistance is requested for a COBRA plan, a comparison must be made to available Marketplace coverage before making a commitment to support the costs of the COBRA plan. Supporting Marketplace Plans There are many resources available to help clients select plans that are appropriate for their needs. This guidance considers only the financial and policy aspects of health insurance assistance decisions. Creating the cost comparisons described above can give you an idea when insurance assistances looks like the best alternative for a client. There are some special features of Marketplace plans that will help decide if insurance is the best choice for a client, and will help predict the total costs of assisting a client with a Marketplace plan. Persons between 100 and 200% FPL qualify for premium reductions and reduced cost sharing that can make Marketplace insurance costs comparable to or lower than direct service costs, especially when ADAP costs are considered. Unlike some employer-based plans, plans sold on the Marketplace caps on out of pocket costs such as co-pays and prescription co-insurance payments. Persons with household incomes between 100% and 250% FPL are eligible for reduced out of pocket maximums (OOP) when they buy Silver plans. The average out of pocket maximums for plans in the different rating areas of Texas are shown in the attachments. This helps estimate the maximum charges that you could expect for a client's insurance coverage. 3

43 Page 42 of 59 Persons under 100% FPL do not qualify for reduced insurance costs on the Marketplace. Please carefully consider the possible maximum expenditure on insurance (1 year of premiums plus the maximum out of pocket costs) before making a commitment to assist with insurance costs for clients under 100%. You can decline to provide insurance assistance if plan costs greatly exceed costs of directly delivered care. If a client is under 100% FPL or over 250% FPL, Gold or Platinum plans may actually provide a cost advantage for clients with high clinical costs such as co-morbidities or complex treatments. Silver is not always the best choice in this situation. The average insurance costs for this group are shown in Attachment B. If you will provide insurance assistance for a Marketplace plan, you must comply with the following: the client must take the advance premium credit. if client is between 100 and 250% FPL, the client must select a Silver Plan. Clients must report changes in income, family size, tobacco use or residence promptly through Healthcare.gov. You should have processes in place to review financial eligibility information on a regular basis (i.e. no less often than every 6 months). Making Allocating and Budgeting Decisions for Insurance Assistance Services The information Appendix B shows the average premiums and out of pocket maximums for single member households with varying levels of income. This information is from Healthcare.gov. Please keep the following in mind. Components of Insurance Costs Insurance costs have two basic components: the premium and the out of pocket maximum. Premiums The cost of Marketplace premiums depend on the age and income of clients, and whether or not they smoke. Premiums are higher for older people and smokers compared to younger people and those who do not use tobacco. The average premiums in the tables are adjusted for age. The effect of smoking on premiums is also shown in the averages; the weighted average column will give you an overall average of the total costs you should expect without knowing the smoking status of your clients. Use this figure to estimate overall insurance costs. People with household incomes between 100% and 400% of FPL are eligible for tax credits that lower the cost of premiums. Clients that are income-eligible for tax credits must take them as advance premium tax credits. This means the federal government pays the insurance company and not the client. Premiums have to be paid every month, and will not vary in cost as long as client income does not change. Out of Pocket Maximums The ACA Marketplace plans have caps on the amount of money that a person must pay out of their pocket. Out of pocket costs include co-pays and co-insurance fees for drugs and medical services. Once someone reaches an out of pocket limit, the insurance pays for 100% of the medical service costs. Out of pocket maximums are much lower for persons between 100% and 200% of FPL who purchase Silver level plans compared to costs for other plans for people at this income level. 4

44 Page 43 of 59 When a coverage period starts, your insured clients may have very high copayments/co insurance charges, especially for HIV treatment drugs or other "4th tier" or "specialty drugs". Please remember that copayment/coinsurance charges will stop once the client reaches the OOP maximum for the plan. If a plan has a $2,500 out of pocket maximum, once the out of pocket payments total that amount, there are no more copayments/co-insurance charges. It may be shocking for a client to be told that they owe $500 or more for prescription, but these high copayments mean that out of pocket maximums are reached very quickly, and then the co-pays or coinsurance charges stop. This means that OOP charges are "front loaded" - they are much higher at the beginning of a coverage year than at the end. Don't give up on insurance due to high initial copayment charges - they will decrease as clients hit their out of pocket maximums. The out of pocket maximums do not include premium payments. Copayments/Co-insurance payments made for out of network services do not count - if the doctors and pharmacies used by your clients are not in the health plan's network, and the client continues to see doctors and use pharmacies outside the network, the client will continue to pay high levels of co-pay throughout the year. If your area uses a monthly cap to control costs for Health Insurance Assistance services, these policies must be re-considered in light of the Marketplace provisions that cap OOP expenses for persons between 100% and 250% FPL. Your policy may make a Marketplace plan unaffordable if it caps maximum monthly payments for a client. Since OOP payments are front loaded, you should expect much higher requests for co-payment assistance at the beginning of a plan year, but these payments will stop completely once the maximum is reached. For example, your current policy may limit co-payment support to no more than $500 a month. A client on a Marketplace plan with a $2000 OOP maximum may have initial monthly co-payments totaling much more than this, but the annual total will not exceed $2000. While this may create complications related to budgeting and cash flow, the overall cost of the insurance is still reasonable. Monthly caps may still make sense for employer based plans with continuing co-payments, but these policies may put affordable Marketplace coverage out of reach for clients. Please examine your cost-containment policies to assure that they will work for Marketplace plans. Ryan White Health Insurance Assistance Best Practice Recommendations 1. Implement local Health Insurance Assistance Program (HIAP) policies that encourage uninsured RWeligible clients transition to Qualified Health Plans (QHP) offered through the Marketplace. a. Local HIAP policy must be consistent with RWHAP and DSHS requirements b. Ensure cost effectiveness compared to direct (traditional) funding of providers of 3 rd party eligible services (e.g. primary medical care, pharmacy, behavioral health services) c. Ensure consistency with HIAP policies in other Texas Part A/B jurisdictions to enable HIAP recipients to maintain coverage when relocating to other areas in the State d. Ensure HIAP sustainability and maintenance of care for PLWHA enrolled in QHPs i. Ensure funding allocations are sufficient to sustain HIAP program costs on an ongoing basis 5

45 Page 44 of 59 ii. Ensure all RW-funded providers of 3 rd party eligible services participate in a broad cross section of eligible QHPs available in the jurisdiction iii. Implement efficient contracting and reimbursement systems to ensure premiums and out of pocket (OOP) charges are paid in a timely manner iv. Implement ongoing financial and program eligibility certifications/re-certifications to ensure changes in HIAP eligibility (income, age, family size, geographic area of residence & tobacco use) are identified in a timely manner 2. Create a shared understanding of basic HIAP eligibility and cost effectiveness with your providers When to say yes and when to say no to a request for assistance with Marketplace plans a. Eligible uninsured PLWHA meet the following basic criteria i. citizenship status that makes them eligible Uninsured/Underinsured PLWHA with a Modified Adjusted Gross Income (MAGI) between 100% to 250% of the federal poverty level (FPL) ii. Under 65 years of age if Medicare eligible iii. Agree to take the Advance Premium Tax Credit in order to minimize OOP at point of service iv. Agree to choose a Silver Level Plan with ADAP equivalency 3. Create comparisons of the costs of direct service delivery with assistance with health insurance costs i. Include the jurisdiction s average funding allocations (planned) or actual expenditures for primary medical care, pharmacy, behavioral health services and other 3 rd party reimbursable services. ii. Include the average ADAP expenditures. iii. If available, include expenditures by other non RW-funded providers (e.g. indigent care systems) related to 3 rd party eligible services iv. May be done on a jurisdictional level (e.g. all clients within the cohort are deemed HIAP eligible) or on a client by client basis v. Jurisdiction may adopt a policy that declines to provide HIAP support for consumers who purchase health insurance coverage that is not cost effective and/or does not meet the area s approved HIAP eligibility requirements At minimum the cost effectiveness amount must include the local HSDA ADAP and RW expenditures. Appendix A: Recommended Method for Calculating per Client Expected Direct Costs of Covered Clinical Services The first worksheet in the attached workbook helps calculate the expected per client expenditures on covered clinical services. The table at the top (shaded in blue) will calculate the overall expected per client cost across the HSDAs in your service area. You do not need to enter information directly in this table. Below this are tables you can use to input your expenditures or allocations for the covered clinical services for each HSDA. The areas for data input are shaded in gray. You can enter information for only Part B and SS, or for 6

46 Page 45 of 59 other funding streams as well. The sheet will total across funding streams for a service, and then across services to give you a total area expenditure/allocation for covered clinical services. This creates an estimate that shows how much expenditure on clinical services would be avoided if a client had insurance This total is divided by your count of the unique clients that received services through the funding streams shown in the table. For example, you may have 4,000 unique clients in an HSDA, but only 2,000 received a covered clinical service. You should divide the total amount allocated/expended to covered clinical services by 2,000. As you fill in information for your HSDAs, the top table will create a consolidated table showing the allocations across HSDA and will create an estimated expenditure for covered clinical services. The second worksheet in the attached workbook gives you a place to compare the costs of providing direct clinical services through the RWP and SS and average costs of insurance for your area, which are provided in Appendix B. The average cost for an ADAP client is pre-loaded in this sheet, and the overall per client direct cost of covered clinical services should be transferred from the first worksheet to the appropriate space in the second worksheet. If you have a figure available that represents uncompensated HIV care costs within your community you can also enter this information. The worksheet will total the ADAP cost + per client direct cost of covered services+ per person uncompensated care costs into one figure, which you can compare to insurance costs. Please note that because insurance costs vary so much by income, that we provided average maximum insurance costs for several different household income levels. You can use the same ADAP figures, direct covered services cost, and uncompensated care costs for each income level- there is no need to calculate these figures for each income level. We did not include expenditures for dental, medical case management, and health insurance continuation services in the cost calculations total; dental services are not usually included in the core cost of health insurance on the Marketplace, and reimbursement for RW-style MCM is also unlikely to be a covered service. There is a place for you to enter allocations/expenditures for these three categories if you desire to enter them; these entries will not change the per client expected direct cost. 7

47 Page 46 of 59 Appendix B: Average Health Insurance Costs in Texas, 2015 Plan Year Keep in Mind 1. Costs for persons under 100% FPL are very high. Please consider carefully if before providing insurance assistance for these clients. We do not encourage it unless the client has very high expected medical costs due to hospitalizations or co-morbidities that require lots of specialist support and expensive drugs. If insurance coverage for persons below 100% FPL is the best route given high medical costs, please strongly consider a Platinum plan (or a Gold plan if there are no Platinum plans in your area). These plans have higher premiums but lower OOP maximums, and overall are a better deal for these clients than Silver plans. These average costs are shown in the tables. 2. All these costs are based on household income. If your client has big fluctuations in income, keep in mind that these changes will affect the cost of premiums and perhaps the maximum out of pocket amount your client's plan will charge. 3. The costs show premiums and OOP maximum levels. They are averages, and the cost to an individual client will differ. The amounts will help you make allocation decisions, and think about how average insurance costs may compare to the direct costs to ADAP and your local clinical services. Reading the Tables There are tables for the areas with highest HIV prevalence: Houston, Dallas + Fort Worth (one area), San Antonio, Austin, and El Paso. All other rating areas made up less than 3% each of HIV prevalence. These areas are pulled together in one table. The estimates are drawn from data on Rating Area 26. If you would rather create your own estimate for your area than use the "rest of Texas" estimates, we will give you instructions on how to do this. If you are considering this, take into account that creating these estimates is very time consuming and the modeling can be complex. Rating area shows the health insurance rating area name, and the counties covered are listed in the table. The average costs are shown for five household income levels. The costs are for single member households. Tables show the average annual premium for non-smokers and smokers, the average OOP maximums, and then the total insurance costs for smokers and non-smokers (premium + OOP maximum). The weighted average shows the average total costs if we assume that about 41% of your clients smoke/use tobacco -- this figure is based on national studies. If you have better data locally we can tell you how to create your own local adjustment. Since these tables list the maximum these estimates will show the maximum average costs. 8

48 Page 47 of 59 Rating Area: Austin Counties Covered: Bastrop, Caldwell, Hays, Travis, Williamson Costs for Silver level plans for single member household; Gold/Platinum Costs for <100% FPL only Table 1: Average Marketplace Insurance Costs, Austin 2015 Household Income as % FPL Average Premium for Nonsmoker Average Premium for Smoker Average OOP Total Cost for Non Smokers Total Cost for Smoker Weighted Cost <100% FPL Silver $4, $5, $6, $10, $11, $10, <100% FPL Platinum $6, $6, $1, $7, $8, $8, % -132% $1, $1, $1, $2, $3, $2, % $1, $2, $1, $2, $3, $2, % $1, $2, $1, $3, $4, $3, % $2, $3, $1, $4, $5, $4, Rating Area: Dallas and Fort Worth Counties Covered: Rockwall, Collin, Dallas, Delta, Denton, Ellis, Hunt, Johnson, Kaufman, Parker, Tarrant, Wise Costs for Silver level plans for single member household and Platinum for <100% FPL Table 2: Average Marketplace Insurance Costs, Dallas + Fort Worth 2015 Household Income as % FPL Average Premium for Nonsmoker Average Premium for Smoker Average OOP Total Cost for Non Smokers Total Cost for Smoker Weighted Cost <100% FPL Silver $5, $6, $6, $11, $12, $11, <100% FPL Platinum $7, $8, $1, $9, $10, $9, % -132% $1, $2, $ $2, $3, $2, % $1, $2, $ $2, $3, $2, % $1, $2, $1, $3, $4, $4, % $2, $3, $1, $4, $5, $4,

49 Page 48 of 59 Rating Area: El Paso Counties Covered: El Paso Costs for Silver level plans for single member household and Platinum for <100% FPL only Table 3: Average Marketplace Insurance Costs, El Paso 2015 Household Income as % FPL Average Premium for Nonsmoker Average Premium for Smoker Average OOP Total Cost for Non Smokers Total Cost for Smoker Weighted Cost <100% FPL Silver $4, $4, $6, $10, $10, $10, <100% FPL Platinum $6, $7, $1, $8, $9, $8, % -132% $ $1, $1, $2, $2, $2, % $1, $1, $1, $2, $3, $2, % $1, $2, $1, $3, $4, $3, % $2, $3, $1, $4, $5, $4, Rating Area: Houston Counties Covered: Austin, Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery, San Jacinto, Waller Costs for Silver level plans for single member household and Platinum for <100% FPL only Table 4: Average Marketplace Insurance Costs, Houston 2015 Household Income as % FPL Average Premium for Nonsmoker Average Premium for Smoker Average OOP Total Cost for Non Smokers Total Cost for Smoker Weighted Cost <100% FPL Silver $4, $5, $6, $10, $11, $11, <100% FPL Platinum $7, $7, $1, $8, $9, $9, % -132% $1, $2, $ $2, $2, $2, % $1, $2, $ $2, $3, $2, % $1, $2, $1, $3, $4, $3, % $2, $3, $1, $4, $5, $4,

50 Page 49 of 59 Rating Area: San Antonio Counties Covered: Atascosa, Wilson, Kendall, Bexar, Bandera, Comal, Guadalupe, Medina Costs for Silver level plans for single member household and Platinum for <100% FPL only Table 5: Average Marketplace Insurance Costs, San Antonio 2015 Household Income as % FPL Average Premium for Nonsmoker Average Premium for Smoker Average OOP Total Cost for Non Smokers Total Cost for Smoker Weighted Cost <100% FPL Silver $3, $4, $6, $10, $10, $10, <100% FPL Platinum $5, $6, $1, $7, $7, $7, % -132% $ $1, $1, $1, $2, $2, % $1, $1, $1, $2, $2, $2, % $1, $2, $1, $3, $3, $3, % $2, $2, $1, $4, $4, $4, Rating Area: Rest of Texas Counties Covered: Counties not specifically mentioned in other analyses Costs for Silver level plans for single member household and Gold for <100% FPL only Table 6: Average Marketplace Insurance Costs, Rest of Texas 2015 Household Income as % FPL Average Premium for Nonsmoker Average Premium for Smoker Average OOP Total Cost for Non Smokers Total Cost for Smoker Weighted Cost <100% FPL Silver $4, $5, $6, $10, $11, $11, <100% FPL Gold $5, $7, $3, $8, $10, $9, % -132% $ $2, $ $1, $2, $1, % $1, $2, $ $1, $3, $2, % $1, $2, $1, $3, $4, $3, % $2, $3, $1, $4, $5, $4,

51 Page 50 of 59 Comparisons of Rating Areas within Income Levels Table 7: Comparisons of Rating Area Silver Plan Costs within Income Groups, 2015 Marketplace Costs Area Average Premium for Non-smoker Below 100% FPL, Silver Level Plans Average Premium for Smoker Average OOP Total Cost for Non Smokers Total Cost for Smoker Weighted Cost Austin $4, $5, $6, $10, $11, $10, Dallas + Fort Worth $5, $6, $6, $11, $12, $11, El Paso $4, $4, $6, $10, $10, $10, Houston $4, $5, $6, $10, $11, $11, San Antonio $3, $4, $6, $10, $10, $10, Rest of Texas $4, $5, $6, $10, $11, $11, % FPL, Silver Level Plans Austin $1, $1, $1, $2, $3, $2, Dallas + Fort Worth $1, $2, $ $2, $3, $2, El Paso $ $1, $1, $2, $2, $2, Houston $1, $2, $ $2, $2, $2, San Antonio $ $1, $1, $1, $2, $2, Rest of Texas $ $2, $ $1, $2, $1, % FPL Silver Austin $1, $2, $1, $2, $3, $2, Dallas + Fort Worth $1, $2, $ $2, $3, $2, El Paso $1, $1, $1, $2, $3, $2, Houston $1, $2, $ $2, $3, $2, San Antonio $1, $1, $1, $2, $2, $2, Rest of Texas $1, $2, $ $1, $3, $2, % FPL Austin $1, $2, $1, $3, $4, $3, Dallas + Fort Worth $1, $2, $1, $3, $4, $4, El Paso $1, $2, $1, $3, $4, $3, Houston $1, $2, $1, $3, $4, $3, San Antonio $1, $2, $1, $3, $3, $3, Rest of Texas $1, $2, $1, $3, $4, $3, % FPL Silver Austin $2, $3, $1, $4, $5, $4, Dallas + Fort Worth $2, $3, $1, $4, $5, $4, El Paso $2, $3, $1, $4, $5, $4, Houston $2, $3, $1, $4, $5, $4, San Antonio $2, $2, $1, $4, $4, $4, Rest of Texas $2, $3, $1, $4, $5, $4,

52 Page 51 of 59 Table 8: Comparison of Platinum or Gold Level Plan Costs by Area, 2015 Area Average Premium for nonsmoker Average Premium for Smoker Average OOP Total Cost for NS Total Cost for Smoker Weighted Cost Austin $6, $6, $1, $7, $8, $8, Dallas + Fort Worth $7, $8, $1, $9, $10, $9, El Paso $6, $7, $1, $8, $9, $8, Houston $7, $7, $1, $8, $9, $9, San Antonio $5, $6, $1, $7, $7, $7, Rest of Texas $5, $7, $3, $8, $10, $9, Costs reflect Platinum level plans for all areas except Rest of Texas, which shows Gold level costs as Platinum plans are not uniformly available in these areas. 13

53 Page 52 of 59 Houston EMA Health Insurance Assistance & APTC Reconciliation ADVANCE PREMIUM TAX CREDIT (APTC) RECONCILIATION Ryan White HIV/AIDS Program (RWHAP) grantees and subgrantees that use program funds to purchase health insurance in the Marketplace must establish appropriate mechanisms to vigorously pursue any excess premium tax credit a client receives from the IRS upon submission of the client s tax return. RWHAP grantees and subgrantees must establish and maintain policies and procedures for the pursuit of excess premium tax credit from individual clients. Grantees and subgrantees must document the steps that were taken to pursue these funds from clients. RESPONSIBILITIES OF RYAN WHITE HEALTH INSURANCE ASSISTANCE PROVIDER The Ryan White funded Health Insurance service provider will assist individuals with cost of out of pocket and premium expenses associated with the enrollment and retention of Qualified Health Plans (QHPs) through the Health Insurance Marketplace. Ryan White funded Health Insurance Assistance provider responsibilities include: Process to help clients with Marketplace Insurance Plans promptly update income, family size, insurance status, etc. changes on Healthcare.gov Training for all relevant staff on how to identify APTC credits and liabilities Referral assistance for clients in need of free or low-cost tax filing services Mechanism to collect and track client tax related documents Mechanism to collect and track tax credit and/or liability* payments VIGOROUSLY PURSUE REQUIREMENTS Per policy clarification issued by the HRSA HIV/AIDS Bureau, Ryan White grantees and contracted providers must vigorously pursue any excess premium tax credit a client receives from the IRS upon submission of the client s tax return. If after extensive documented efforts on the part of the contracted provider, the client fails to comply with guidelines, the client may continue to receive Ryan White services. To meet the standard of vigorously pursue, all clients receiving assistance through the Ryan White funded Health Insurance Assistance service category to pay for Marketplace QHP premiums must: Designate Premium Tax Credit to be taken in advance during Marketplace Insurance enrollment Update income information at Healthcare.gov every 6 months, at minimum, with one update required during annual Marketplace open enrollment or Marketplace renewal periods Revised March 17, 2015 *PENDING HRSA GUIDANCE

54 Page 53 of 59 Submit prior year tax information no later than May 31 st. Tax information must include: o Federal Marketplace Form 1095-A o IRS Form 8962 o IRS Form 1040 (excludes 1040EZ) Reconciliation of APTC credits or liabilities* Should a client fail to complete requirements as outlined above, he/she must provide signed documentation for their client record that outlines the following: Failure to file federal income tax may result in ineligibility to receive Advance Premium Tax Credits in the future Failure to submit require Ryan White tax documentation and/or payment may result in ineligibility to receive Ryan White Health Insurance Assistance services in the future Continued collection attempts will be made by the Health Insurance provider until program requirements are met VIGOROUSLY PURSUE PERFORMANCE To assess the effectiveness of APTC reconciliation efforts, RWGA will require that the following measures be tracked: Number of Health Insurance Assistance clients receiving premium assistance for Marketplace QHPs Number of Health Insurance Assistance clients between 100% - 400% FPL receiving premium assistance for Marketplace QHPs Number of Health Insurance Assistance clients with documented prior year tax information on file o Federal Marketplace Form 1095-A o IRS Form 8962 o IRS Form 1040 (excludes 1040EZ) Number of Health Insurance Assistance clients who received an APTC credit on their prior year tax return Number of Health Insurance Assistance clients with an APTC liability on their prior year tax return Number of Health Insurance Assistance clients who submitted partial or full payment associated with APTC credit Number of Health Insurance Assistance clients who received HINS assistance with payment of APTC liability* Provider must document methodology for development of the sample population used for measurement tracking. Results of performance measures should be submitted to RWGA quarterly, and as requested. Revised March 17, 2015 *PENDING HRSA GUIDANCE

55 3/31/ Percent of Health Law Enrollees Receive Subsidies, White House Says NYTimes.com Page 54 of 59 U.S. 86 Percent of Health Law nrollee Receive Su idie, White Hou e Sa RO RT P AR MARCH 10, 2015 WASHINGTON The Obama administration said Tuesday that 11.7 million Americans now have private health insurance through federal and state marketplaces, with 86 percent of them receiving financial assistance from the federal government to help pay premiums. About three fourths of people with marketplace coverage 8.8 million consumers live in the 37 states served by HealthCare.gov, the website for the federal insurance exchange. The other 2.9 million people are in states that created and operate their own exchanges. Sylvia Mathews Burwell, the secretary of health and human services, underlined the importance of subsidies for people in states using the federal exchange subsidies that could be withdrawn if the Supreme Court rules against the Obama administration in a pending case. Administration officials suggested that more than seven million people could lose subsidies, making insurance unaffordable, if the court ruled that such assistance was unavailable in the federal exchange. The plaintiffs contend that the Affordable Care Act does not allow subsidies in the federal exchange. In Florida, nearly 1.6 million people have selected or been automatically re enrolled in health plans the largest enrollment of any state in the federal exchange and 1.5 million of them qualified for subsidies in the form of tax credits, which averaged $294 a month. In Texas, 1.2 million people selected or were re enrolled in health plans, and one million of them qualified for financial assistance averaging $239 a 7 million americans have insurance under health act.html?_r=0 1/3

56 3/31/ Percent of Health Law Enrollees Receive Subsidies, White House Says NYTimes.com Page 55 of 59 month. In North Carolina, 560,400 people selected health plans in the federal marketplace, and 515,500 of them qualified for subsidies averaging $315 a month. Consumers in the federal exchange paid an average premium of $101 a month after tax credits, and 55 percent of them paid monthly premiums of $100 or less after tax credits, the administration said in a new report. For people in states using HealthCare.gov, tax credits averaged $263 a month and reduced the premium by 72 percent, on average. That is similar to the share of premiums paid by employers for their workers family coverage. The latest enrollment period began Nov. 15 and ended Feb. 15, but the administration has extended the deadline or granted a special enrollment period to some people who began their applications before the deadline or just discovered that they would owe a tax penalty because they were uninsured in The rush to sign up before the deadline was less significant this year than last. Nearly one fifth of sign ups in the federal exchange occurred in the last month of enrollment, compared with one half in the comparable period of Dr. Meena Seshamani, director of the Office of Health Reform at the Department of Health and Human Services, said that 6.7 million people had marketplace coverage at the start of the latest enrollment period. So it would appear that five million more people signed up. But the total of 11.7 million people with marketplace coverage could decline as some fail to pay premiums and have their coverage terminated. Numbers in the new report suggest that the administration is struggling to sign up members of minority groups. Of those who selected a plan, 11 percent were Latinos, the same proportion as last year, and 14 percent were African Americans, down from 17 percent last year, the report said. Blacks and Latinos are much more likely to be uninsured than are non Hispanic whites. But Dr. Seshamani said, The data on race and ethnicity should be interpreted with great caution since more than one third of enrollees do not provide these data. 7 million americans have insurance under health act.html?_r=0 2/3

57 3/31/ Percent of Health Law Enrollees Receive Subsidies, White House Says NYTimes.com Page 56 of 59 Some experts had predicted that people with marketplace coverage would continue their coverage in the same health plans. But many switched plans, indicating that they were active shoppers looking for better coverage or better value. Of the 4.2 million people who had coverage in the federal marketplace in 2014 and 2015, about 1.2 million, or 29 percent, switched to a different plan. This is a much higher proportion than seen in other programs, like Medicare s prescription drug coverage, or in employer sponsored health plans, said Kevin Griffis, a spokesman for the Health and Human Services Department. Larry Levitt, a senior vice president of the Kaiser Family Foundation, said some data in the report suggested that consumers were shifting to lower cost plans. These enrollees are very, very price conscious, he said. Almost 3.3 million people ages 18 to 34 are signed up for marketplace coverage. They account for 28 percent of people selecting health plans for 2015, the same proportion as last year, the administration said. Insurers covet consumers in this age group because they tend to be healthy, and their premiums provide revenue to help pay claims for others. A version of this article appears in print on March 11, 2015, on page A17 of the New York edition with the headline: 86 Percent of Health Law Enrollees Receive Subsidies, White House Says The New York Times Company 7 million americans have insurance under health act.html?_r=0 3/3

58 Page 57 of 59 Peter Ubel Contributor I explore medical controversies thru behavioral econ and bioethics. Opinions expressed by Forbes Contributors are their own. PHARMA & HEALTHCARE 8:39AM 2,149 views The High Price Of Affordable Medicine In the old days, blockbuster drugs were moderately expensive pills taken by hundreds of thousands of patients. Think blood pressure, cholesterol and diabetes pills. But today, many blockbusters are designed to target much less common diseases, illnesses like multiple sclerosis and rheumatoid arthritis or even specific subcategories of cancer. These medications have become blockbusters not through the sheer volume of their sales, but as a result of their staggeringly high prices. Tens of thousands of dollars per patient, per year. The high cost of such blockbuster specialty drugs creates significant financial burden for many patients. When a drug costs $90,000 per year, and a patient pays 10% of that cost, we are talking about a serious chunk of change. Not surprisingly, as these out of pocket costs rise, so too do the rates of non adherence, medical lingo for the patients didn t take the medicines that I, their doctor, thought they should take. Non adherence used to be called noncompliance, which sounded too paternalistic. Now some experts are shifting to an even less judgmental language of medication abandonment. Indeed, here is a picture of the likelihood that patients will stop taking specialty drugs as a function of their out of pocket costs: What can we do to help patients afford these medications?

59 Well, drug companies have come to the rescue by offering financial assistance to patients. For example, as described by David Howard in a New England Journal article, the Dendreon company covers up to $6,000 of patients copays, coinsurance and deductibles for its $93,000 prostate therapy, Provenge. The company boasts that 75% of patients receiving Provenge are expected to have minimal to no out of pocket costs. Howard lays out a sampling of drug assistance programs covering up to $24,000 of out of pocket expenses: Page 58 of 59 Why would companies do this? For starters, they want to help needy patients much the way expensive colleges help lower income students by giving them financial assistance. In addition, the companies make money despite offering these discounts, because the insurance portion of their payments still add up to a tidy sum. Moreover, helping patients is good public relations, and with all the concern about high drug costs, these programs are a necessary part of being able to justify high prices. But most importantly, these assistance programs enable companies to get away with charging higher prices. They make medications artificially cheap for patients, thereby increasing the demand for their products. What s more, these programs distort the health insurance market. When a patient chooses an insurance plan with low monthly premiums but high out of pocket costs, the insurer justifies these premiums in part on the expectation that the high outof pocket costs will reduce patient demand for services. If pharmaceutical company drug assistance programs reduce out of pocket costs, patients win

60 on both ends of that bargain they get lower premiums and lower out ofpocket costs. But that will ultimately force insurance companies to re price their products. The market has been distorted. Keep your eyes open for legal developments regarding drug assistance programs. According to Howard, the Office of the Inspector General is scrutinizing such programs. I expect this will come to a head soon, and we will see restrictions placed on companies giving people such assistance. Page 59 of 59 After all, when pharmaceutical companies make expensive drugs affordable for individual patients, the rest of us pay. This article is available online at: Forbes.com LLC All Rights Reserved