When Health Insurance Isn't

by Lisa Codispoti, Senior Advisor
and Brigette Courtot, Policy Analyst
National Women’s Law Center

A recent New York Times article about huge copayments for “Tier 4” prescription drug coverage has created quite a stir. Here’s a little scenario to demonstrate how Tier 4 coverage works (or—more accurately—doesn’t work):  Imagine that you are insured, and you’ve just been diagnosed with breast cancer. Or multiple sclerosis. Or Lupus. You think, “Wow.  This diagnosis really sucks. But, there are treatment options and at least I have health insurance. Things will be okay.”

But, wait…not so fast. If you need Tier 4 drugs, maybe you shouldn’t be so optimistic.

The pharmacy tier system is nothing new. Drugs are divided into different “tiers”, and copayment amounts—which are almost always a fixed fee—increase by tier. The rationale is that a tier system will encourage people to use less costly drugs, since often there is a CHOICE that people can exercise: pay less for the generic if available, or if they prefer the brand, pay a little more. Tier 1 (i.e. a copay of around $10) generally includes generic drugs. Brand name “preferred” drugs are usually Tier 2 (i.e. a copay of around $20), and Tier 3 typically everything else (i.e. a copay of around $35). These three tiers are all that most of us have ever known. 

But now, in an increasing number of private health insurance plans, a fourth tier is making an alarming debut. According to the Times article, the high-cost drugs used to treat certain serious illnesses are now being classified as Tier 4. Instead of the usual fixed fee copay, this new tier requires massive copayments that are calculated as a percentage of the drug cost, ranging from 22 to 30 percent. But for the drugs in this category, and the illnesses they are used to treat, there is no available alternative. No generic. No preferred drug. The sickest among us will take the biggest hit (those with illnesses like multiple sclerosis, rheumatoid arthritis, hemophilia, hepatitis C and certain cancers). In real dollars, the required copays for the Tier 4 drugs used to treat some of these illnesses have run into the many thousands. As a result, the only available choice for many: forgo treatment due to cost, or face huge bills. It gives a whole new meaning to: “your money or your life.”

So, why does this matter for women?  Well, women still earn less than their male counterparts and (in large part due to this income gap) we’re already more likely to have trouble affording prescription drugs and to have medical bill and debt problems. Tier 4 drug copayments could have a devastating effect on the wellbeing of women who should only be focusing on getting (or staying) healthy.

Comments

[pvogel88]

I suffer hepatitus c
when I refilled my interferon on Jan 3 2008, it cost 300$ with no catastropic limit. Up from 30$

I am glad i am on a antidepressent, because when I went to custermer relations, there was a father of an 11year old screaming at them about his sick daughters 600$ monthly copay.

I worked with a couple of congressmen, some activists, Obama sent a letter to opm, and saturday I got a fed ex from Kaiser saying they would send back the 900$