All too often, Americans struggle to afford their medicines. Twelve percent of patients have recently cut pills in half or skipped doses to make their prescriptions last longer; 19% have declined to fill a prescription; and 18% have relied on weaker over-the-counter pills instead of doctor-recommended medications, according to a new Kaiser Family Foundation survey.
Medical issues are the leading cause of personal bankruptcy—and they’ve become a common reason for online fundraisers.
Understandably, access to prescription medications is a top policy concern. Our nation’s lawmakers, Republicans and Democrats alike, want to make necessary drugs more affordable. But they’re addressing the issue the wrong way. Lawmakers tend to dwell on the fact that drugs are cheaper in other countries, and promote policies aimed at lowering the total cost of a drug. Issues like this are irrelevant to most prescription medication users.
Americans typically don’t care what a drug costs an employer or an insurer; they care what it costs them. In other words, the amount of money people pay at the pharmacy counter is what matters. Now more than ever, we need solutions that lower out-of-pocket costs.
Fortunately, there’s an easy way to lower patients’ out-of-pocket costs and provide relief. Health plans could reduce or eliminate patients’ copays, coinsurance and deductibles for highly effective—but oftentimes expensive—drugs. This is a key principle of “value-based insurance design.”
Insurers have been reluctant to adopt V-BID, fearing that it could increase their short-term spending. It might. But managing chronic conditions—like diabetes, asthma and depression—keeps patients healthy and costs in check in the long run. So making services that treat such chronic conditions more affordable for patients will avert spending on preventable hospitalizations and emergency visits down the road and all the accumulated costs associated with those services.
The Affordable Care Act uses V-BID to eliminate patient cost-sharing for a wide range of preventive services, including cancer screenings, counseling for obesity and smoking cessation, and routine immunizations. This extremely popular policy has enabled more than 137 million Americans to gain access to free preventive care.
If congressional leaders and the Trump administration want to lower drug costs, they’d be wise to promote V-BID principles beyond preventive care. Public and private payers should be able to design plans that extend cost-sharing reductions to the most effective treatments and procedures, even if they’re initially expensive.
Consider how it would work for patients with diabetes. Deductibles, copays and coinsurance for insulin and other essential services would be reduced or eliminated, making it far easier for patients to manage their condition. A review of V-BID programs concludes that lowering patients’ out-of-pocket drug costs increases adherence, reduces health disparities, and comes at no extra cost to the healthcare system, due to savings from reduced hospitalization and other services.
For those concerned that increased use of high-value services may lead to a short-term increase in medical spending, insurers should scale back coverage of services that provide little or no clinical benefit. Insurers may pay more for drugs upfront, but those costs would be offset by fewer expensive hospitalizations and emergency department visits.
Unlike most health reform policies, V-BID has bipartisan support. The Trump administration recently empowered insurers in all 50 states to incorporate V-BID into their Medicare Advantage plans for specific services (including prescription drugs) and providers for designated chronic conditions.
Last year, lawmakers from both parties sponsored the Chronic Disease Management Act, which would give certain high-deductible health plans the flexibility to cover treatments for chronic diseases before a patient has met his or her deductible.
American patients have access to the most sophisticated drugs in the world. They deserve insurance benefit designs that are equally innovative and that make it easier to afford potentially lifesaving medications.
