On September 6, the nonprofit AIDS Alabama, working in conjunction with the Center for Health Law and Policy Innovation with Harvard Law School (CHLPI), filed a complaint with the Federal Office of Civil Rights.
The complaint contends that insurers — most notably, Humana — have participated in discriminatory tactics in seven states by placing medication for HIV and Hepatitis C in their most expensive tier. The complaint contends that consumers are paying much more than necessary for the medicine.
Alex Smith, director of policy and advocacy at AIDS Alabama, said that the best possible outcome would be for the Federal Office of Civil Rights to notify the companies mentioned in the complaint that they are not in line with federal law. While Smith did not rule out a potential lawsuit, he said he hopes the matter can be resolved without litigation.
A study conducted by CHLPI found that insurance providers in seven states, including Alabama, had “routinely denied coverage for HIV medications or limited access to needed medications through prohibitively high cost sharing plans,” the report reads.
“The [Affordable Care Act] pretty much specifically states that insurance companies cannot discriminate based on preexisting conditions and that’s the backdoor way of doing it,” said John Dunnam, who was diagnosed with HIV in 2008. “They’re putting medicines that should, at the highest, be on tier 3, and they’re putting them on the top tier and due to the extreme cost associated with that, [insurers] are making you have coinsurance or pay $1,500 a month.”
Some of those medications, Dunnam explained, can cost upwards of $3,000 a month in Alabama. “These people are requiring this medicine to stay alive and healthy,” Dunnam said, his voice slightly cracking over the phone. He believes the inflated prices are due to a lack of competition in the Alabama insurance marketplace as well as Governor Robert Bentley’s refusal to expand Medicaid.
Alabama has some of the toughest poverty guidelines in the country as it pertains to healthcare. Because it is one of 17 states that have not expanded Medicaid, there are currently about 200,000 people without insurance. Those 200,000 do not meet the baseline income requirement of making below $1,250 a year – — which Dunnam described as insanely low.
Consumers earning more than that have been left without many options, Smith explained. “What we’ve found is that in the states that have [expanded Medicaid], they are seeing costs savings and lower dollar amounts spent on healthcare because they’re using the preventative portions of those plans,” Smith said.
“It’s been revolutionary in making states healthier. More and more money is being needed in Alabama to prop up the current status of the Medicaid. If we were to expand in Alabama it would mean potentially billions in economic activity. Whether it’s more jobs in the healthcare sector or more jobs in the private sector with Alabama Medicaid Agency to handle the new caseload of the approximately 200,000 more people who would be eligible if we do expand.”
A September 6 article in the Alabama Political Reporter explored the impact that Medicaid expansion has had on other Southern states: “In 2014, Kentucky opted to expand Medicaid under the Patient Protection and Affordable Care Act (PPACA), and in doing so saw one of the largest reductions in uninsured, non-elderly individuals in the country. As of 2013, Kentucky had an uninsured rate for non-elderly individuals of 18.8 percent, which decreased to 6.8 percent after Medicaid expansion in 2015. After expansion, Medicaid enrollment increased by 95 percent — of the 1.3 million Medicaid enrollees in 2015, 439,000 were new enrollees under Medicaid expansion, 80 percent of whom would have had no coverage at all prior to expansion.”
Dunnam has seen first hand the impact that discriminatory insurance practices have had on people who do not meet the current the standards for Medicaid in Alabama. He considers himself lucky to be covered through Blue Cross Blue Shield, which, as he said, has not price gouged HIV medication.
Because AIDS/HIV has been classified as a disability by the Americans with Disabilities Act, it would be discrimination for an insurer to price the necessary medication in a way that would discourage a consumer from purchase, Smith said.
“We found that Humana was the worst actor in that, by placing the medication [in] their highest tier — tier four — which requires a huge cost sharing for people with HIV,” Smith said. “The reason that is important is of the 14,000 people with HIV in Alabama the average income of those people is around $10,000 a year. There is a barrier to access those lifesaving drugs by a planned design.”
Humana representatives did not return calls seeking a comment on the complaint filed against them. Humana plans to leave the Alabama marketplace in 2017, which could spell more bad news for people like Dunnam seeking affordable medication. Blue Cross Blue Shield will be the only provider in the state’s ACA marketplace.
“Costs are surely going to increase again next year,” Dunnam said. “I’m fully covered, but the impact is really on the Ryan White Program. It was put into place back in the early 90s to help people maintain their medicine and help save lives because back then the death rate was out of control. But thanks to advances in science and medicine they were allowed to come up with new pill regimens that weren’t as toxic and gave people a better chance to survive.”
(The Ryan White Program provides medication for an estimated 500,000 people with HIV/AIDS annually and is designed to fill coverage gaps for people who cannot afford medication or insurance.)
Smith said he hopes that all insurance providers will reclassify the medication that AIDS/HIV and Hepatitis C patients need to survive in Alabama and elsewhere. “We’re hoping other insurers look at this as well and see this as a warning signal that they are not above the law. People are watching.”