Breast cancer survivor Ginny Mason was thrilled to get health coverage under the Affordable Care Act despite her pre-existing condition. But when she realized her arthritis medication fell under a particularly costly tier of her plan, she was forced to switch to another brand.
Under the plan, her Celebrex would have cost $648 a month until she met her $1,500 prescription deductible, followed by an $85 monthly co-pay.
Mason is one of the many Americans with serious illnesses — including cancer, multiple sclerosis and rheumatoid arthritis — who are indeed finding relatively low monthly premiums under President Barack Obama's law. But some have been shocked at how much their prescriptions are costing as insurers are sorting drug prices into a complex tier system and in some cases charging co-insurance rates as high as 50 percent. That can leave patients on the hook for thousands.
"I was grateful for the Affordable Care Act because it didn't turn me down but ... it's like where's the affordable on this one," said Mason, a 61-year-old from West Lafayette, Indiana who currently pays an $800 monthly premium.
Before the federal health law took effect, Mason paid slightly more for her monthly premium on a plan that didn't cover her arthritis or pain medications and some routine doctor's visits.
Avalere Health, a market research and consulting firm, estimates some consumers will pay half the cost of their specialty drugs under health overhaul-related plans, while customers in the private market typically pay no more than a third. Patient advocates worry that insurers may be trying to discourage chronically ill patients from enrolling by putting high cost drugs onto specialty tiers.
Brian Rosen, senior vice president for public policy for The Leukemia & Lymphoma Society, said the group studied premiums and benefits for patients with blood cancer in seven states, including Florida, California, Texas and New York. They found 50 percent co-insurance rates for specialty drugs on several plans in Florida and Texas, while the highest co-insurance rates on California plans were 30 percent and in New York, co-pays were typically $70.
Under the law, insurers can't charge an individual more than $6,350 in out-of pocket costs a year and no more than $12,700 for a family policy. But patients advocates warn those with serious illnesses could pay their entire out-of-pocket cap before their insurance kicks in any money.
"The challenge is for the sickest patients, the ones that need access to these specialty drugs, the costs are going to come in most cases from that out of pocket cap ... they are likely to hit that $6,350 ceiling and in some cases quickly," said Rosen.
Insurers say prescription drugs are one of the main reasons health care costs are rising.
"Spending on specialty drugs is growing rapidly. It's unsustainable," said Clare Krusing, spokeswoman for America's Health Insurance Plans, a trade group that represents the private insurance industry.
Only 1 percent of prescriptions written in 2012 were for specialty drugs, but they accounted for 25 percent of the total cost of prescription drugs, according to a study by America's Health Insurance Plans.
Insurers can generally choose to put whichever drugs they want into the specialty tier of a plan. Generic drugs for blood pressure or cholesterol typically fall into categories that require patients to pay less than $20 out-of-pocket. But patients can end up spending significantly more when they pay for a percentage of a specialty drug's cost. Two of the most frequently prescribed specialty drugs in recent years include the cancer drug Avastin, with an $11,000 average annual price per patient, or the hypertension drug like Letairis, which costs $32,000 per year, according to health insurers.
Even before the Affordable Care Act took effect, insurers had increasingly begun requiring patients to pay a percentage of the drug costs instead of a flat co-pay, but experts say patients often spend more for their prescriptions in plans offered under the health law because of the co-insurance.
"There's a significant percentage of plans who are using co-insurance of 50 percent or higher," said Caroline Pearson, who tracks the health care overhaul for Avalere Health, which studied plans in 19 states. "It is generally a lot higher than what we see in private insurance."
Once they pay more than several hundred dollars, Pearson says patients start to abandon their medications.
William Hurd signed up for a Cigna plan with a $616 monthly premium that covered him and his wife in December. The government kicks in about $900 a month in tax credits. Hurd, a 61-year-old diabetic who works a construction job in Orlando, was eager to fill his insulin prescription along with two other medications. But he was shocked when the pharmacy said he would have to pay $1,400 out of pocket for a 90-day supply. He was under the impression that prescriptions were part of the plan and thought he only had a $10 co-pay for prescriptions.
"I already had the plan. I was in and I was ready to cancel it. If I've got to pay $1,000 more dollars for drugs ... then it's not worth it," he said.
Fortunately, Hurd called his doctor and was able to switch to a cheaper brand of insulin and ended up paying only $112.
"This was an extremely expensive misunderstanding," said his insurance broker Leslie Glogau.
She ran into her own problems with she switched from a private insurance plan to one on the exchange and learned one of her prescriptions was cancelled under the new plan, prompting numerous appeals.
Patient stories in the media have been seized by both political parties, who have put a sometimes misleading spin on successes and failures under the law. Advocacy groups asked about prescription costs repeatedly stressed how beneficial the law is for people with pre-existing conditions, but they still worry about affordability.
Insurers and health navigators say patients are also finding it complicated to figure out which drugs fall into which price categories.
For example, advocates say there's inconsistency on the Multiple Sclerosis drugs and treatments covered by the insurers and whether they can be altered on a per-patient basis.
"This is very much a work in progress," said Bari Talente, executive vice president advocacy at the National Multiple Sclerosis Society. The organization recently addressed the issue at a conference in Washington with more than 300 other MS advocates.
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