Problem: Insurer Discrimination Against Persons with Chronic Diseases

Despite “Obamacare,” persons with chronic diseases continue to face economic discrimination through health insurance plans and/or drug formularies created and/or administered by some (not all) health insurers. Why? Some (not all) health insurers are using illegal and morally improper means to try to avoid significant payments for the drugs, diagnostics and services needed to manage or cure chronic diseases. The problem is large enough and acute enough that it is receiving continued focus from various interest groups, and the subject will  become a more frequent topic on this blog. The topic is especially significant as new health insurance plans for 2015 arrive in the market place on November 15, 2014, with a February 15, 2015 deadline to choose a new plan. This post provides provides a recent example of an insurance company settlement after a complaint was filed regarding its illegal actions, and provides numbers illustrating the financial and human scale of chronic diseases.

An Example  – Cigna’s Recent Settlement of a Complaint Regarding HIV Drugs

Cigna last week capitulated and settled claims asserted in May 2014 regarding illegal discrimination against persons in Florida. The target of discrimination? Persons needing the “cocktail” of drugs needed for HIV. Despite the usual denials of liability or fault, the settlement terms accepted by Cigna include numerous, material going forward changes for Cigna. Although the changes apply only in Florida, they are telling admissions of past illegal discrimination. In short, the charges against Cigna were that it structured its drug benefit plans in Florida to impose high “co-pays” and other charges for insureds seeking HIV medicines.  Cigna also was charged with discouraging use by making doctors and patients jump through pre-approval hoops, as opposed to leaving the medicine decisions to doctors.  The changes extracted in settlement materially reduce or end expenses for insureds, and also end the practice increased the time and effort  required for patients to obtain needed drugs. The overall set of issues is described in a November 7, 2014 press release pasted below, with media coverage in a November 7, 2014 story in the Wall Street Journal.

For Immediate Release
November 7, 2014
Contact: Amina Abbas
+1 252 367 7504
 Florida Insurance Commissioner Reaches Agreementwith Insurer to Protect People with HIV/AIDS 

WASHINGTON–The National Health Law Program (NHeLP) and The AIDS Institute welcomed the Florida Office of Insurance Regulation’s announcement this morning that it has reached a Consent Order with Cigna Health and Life Insurance Company that addresses some of the discriminatory practices identified in their pending federal complaint against Cigna.
“This is a welcomed development,” said Wayne Turner, NHeLP staff attorney. “As we laid out in our federal complaint earlier this year, people living with HIV/AIDS have been experiencing illegal barriers to accessing insurance, including by Cigna. This consent order is a step in the right direction to addressing these barriers.”
“We thank the Florida Insurance Commissioner for taking these first steps to ensure that people living with HIV/AIDS will have greater access to essential medicines in Florida at a more affordable cost,” said Carl Schmid, deputy executive director for The AIDS Institute. “However, much work needs to be done by the insurance companies to address additional barriers to care for people with HIV/AIDS, including inadequate drug formularies, high co-insurance and deductibles.”
The AIDS Institute and NHeLP filed the complaint on May 29, 2014, with the U.S. Department of Health and Human Services Office for Civil Rights, charging four Florida health plans, including Cigna, with unlawful discrimination against people living with HIV and AIDS. The four insurers placed all HIV medications, including generics, on the highest cost-sharing tiers with high levels of co-insurance to discourage people with HIV/AIDS from enrolling, according to the complaint. Such practices are now prohibited under the Affordable Care Act’s non-discrimination provisions, which ban health plans from discriminating against individuals based upon disability and prohibit health plans from discouraging enrollment by people with significant health needs.
While the Consent Order admits no wrongdoing, Cigna has agreed to restructure its HIV prescription drug benefits for the 2015 plan. Among other things, they will limit co-pays to $200 per month for four HIV drugs instead of charging patients 40-50 percent co-insurance for all HIV drugs. Cigna will also place all generic HIV medications into a lower cost “generic” tier, and will eliminate burdensome prior authorization requirements for refills of HIV/AIDS drugs and step therapy requirements for administration of these drugs. The Consent Order requires Cigna to meet with NHeLP, The AIDS Institute and AIDS Healthcare Foundation to address HIV/AIDS drug affordability and access issues more broadly.
“We thank Commissioner Kevin M. McCarty for the steps he has taken to protect patients in Florida”, stated Michael Ruppal, executive director for The AIDS Institute. “The Commissioner’s inclusion of community organizations like ours to meet with Cigna provides additional opportunities to eliminate barriers that restrict access for our patients.”
Today’s Consent Order, which neither NHeLP nor The AIDS Institute were a party to, applies only to Cigna. The order does not address the specific legal claims that are pending in the federal complaint, including claims regarding discriminatory plan benefit designs. In addition, the order does not affect the complaints pending against other Florida insurance companies.
“We will continue working so that all health plans comply with federal non-discrimination laws that prohibit egregious insurance company practices,” added Turner. “It remains the responsibility of federal officials to ensure that these federal protections are properly monitored and fully enforced.”
“In the next week, we will learn how Cigna and other insurers in Florida and across the country will structure their 2015 qualified health plans,” continued Schmid. “We are looking forward to seeing plans that will make health insurance work for people living with HIV/AIDS and others with chronic health conditions.”
For more information, contact: Wayne Turner (NHeLP staff attorney) at
202-289-7661 ext. 307 and Carl Schmid (The AIDS Institute deputy executive director) at 202-669-8267.

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The National Health Law Program protects and advances the health rights of low income and underserved individuals. The oldest non-profit of its kind, NHeLP advocates, educates and litigates at the federal and state levels.  www.healthlaw.org

The changes agreed to by Cigna are a useful first step, and arrive just ahead of the debut of new health insurance plans for 2015. Cigna’s new plans – all across the country – no doubt will be scrutinized. Meanwhile,  insurance plan discrimination charges remain pending for CoventryOne, Humana, Inc. and Preferred Medical Plan.

The Scale of Chronic Disease – in Dollars

The following data broadly show the scale of the problem of chronic disease. The data below is taken from the Centers for Disease Control, a US government agency, at the links shown below. The quotes below, however, omit the CDC’s footnotes with citations to supporting studies and data. See the CDC web site for the citations.

The Cost of Chronic Diseases and Health Risk Behaviors

“The majority of US health care and economic costs associated with medical conditions are for the costs of chronic diseases and conditions and associated health risk behaviors.

  • Eighty-four percent of all health care spending in 2006 was for the 50% of the population who have one or more chronic medical conditions.
  • The total costs of heart disease and stroke in 2010 were estimated to be $315.4 billion. Of this amount, $193.4 billion was for direct medical costs, not including costs of nursing home care.
  • Cancer care cost $157 billion in 2010 dollars.
  • The total estimated cost of diagnosed diabetes in 2012 was $245 billion, including $176 billion in direct medical costs and $69 billion in decreased productivity. Decreased productivity includes costs associated with people being absent from work, being less productive while at work, or not being able to work at all because of diabetes.
  • The total cost of arthritis and related conditions was about $128 billion in 2003. Of this amount, nearly $81 billion was for direct medical costs and $47 billion was for indirect costs associated with lost earnings.
  • Medical costs linked to obesity were estimated to be $147 billion in 2008. Annual medical costs for people who are obese were $1,429 higher than those for people of normal weight in 2006.
  • For the years 2009–2012, economic cost due to smoking is estimated to be more than $289 billion a year. This cost includes at least $133 billion in direct medical care for adults and more than $156 billion for lost productivity from premature death estimated from 2005 through 2009.
  • The economic costs of drinking too much alcohol were estimated to be $223.5 billion, or $1.90 a drink, in 2006. Most of these costs were due to binge drinking, and resulted from losses in workplace productivity, health care expenses, and crimes related to excessive drinking. 

The Scale of Chronic Disease – in Human Terms

Chronic Diseases: The Leading Causes of Death and Disability in the United States

“As of 2012, about half of all adults—117 million people—have one or more chronic health conditions. One of four adults has two or more chronic health conditions.
Seven of the top 10 causes of death in 2010 were chronic diseases.

Two of these chronic diseases—heart disease and cancer—together accounted for nearly 48% of all deaths.

Obesity is a serious health concern. During 2009­–2010, more than one-third of adults, or about 78 million people, were obese (defined as body mass index [BMI] ≥30 kg/m2). Nearly one of five youths aged 2–19 years was obese (BMI ≥95th percentile).
Arthritis is the most common cause of disability.Of the 53 million adults with a doctor diagnosis of arthritis, more than 22 million say arthritis causes them to have trouble with their usual activities.

Diabetes is the leading cause of kidney failure, lower limb amputations other than those caused by injury, and new cases of blindness among adults.

The data above are the data shown by the CDC web site on November 9, 2014. The specific numbers, however, are not as important as the broad picture of the vast scale of chronic disease, and the vast amounts of money at stake for drugs, diagnostics and other services for persons facing chronic diseases.

Disclosure of Interests

Transparency and disclosure matter. Readers should note that I invest in biotech stocks, and some of the companies make money selling drugs, diagnostics and/or other services for chronic diseases, such as cancers and hepatitis C. Also note that persons dear to me (and friends of friends) have been struck by cancer, and far too many of them have seen their problems needlessly multiplied by health insurers refusing to pay for needed services, drugs or procedures. Therefore, my pro bono work includes representing persons denied health insurance benefits, and other advocacy efforts for persons during and “after” cancer.