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Truthdigger of the Week: Covered California

Posted on Jul 26, 2015

By Alexander Reed Kelly

Chris Miller / CC BY 2.0

Every week the Truthdig editorial staff selects a Truthdigger of the Week, a group or person worthy of recognition for speaking truth to power, breaking the story or blowing the whistle. It is not a lifetime achievement award. Rather, we’re looking for newsmakers whose actions in a given week are worth celebrating.

The agency that governs California’s medical marketplace under the Affordable Care Act has limited the amount anyone enrolled in a plan can be charged each month for specialty medicines used to treat cancer and other chronic illnesses.

Set to take effect in 2016, the rules issued by Covered California in May “strike a balance between ensuring Covered California consumers can afford the medication they need to treat chronic and life-threatening conditions while keeping premiums affordable for all,” according to Covered California Executive Director Peter V. Lee. Most patients will pay no more than $250 per drug per month.

According to Express Scripts, a company that manages prescription benefits, more than half a million patients in the U.S. had medication costs that exceeded $50,000 in 2014. “We’ve heard stories of people who’ve emptied their retirement savings to cover their drug needs,” said Betsy Imholz, special projects director at the advocacy group Consumers Union. “It’s a really frightening, Wild West situation for people who need these specialty drugs.”

The policy will apply to 2.2 million people who buy coverage on the individual market. A bill that would extend protection to people on plans received through their employers is under consideration in the California Legislature. Several other state legislatures are considering capping drug prices, with some proposing limits as low as $100 per month.

The policy was designed with patients like Mikkel Lawrence in mind. Profiled at MedPage Today, Lawrence is a retired middle school teacher with hepatitis C, a virus that threatens the liver and often leaves Lawrence exhausted. He sometimes gets up in the morning, eats breakfast and then returns to bed for a nap. “I get really bad tired spells. It’s like you have to go to sleep,” he said. “It takes away probably 3 or 4 hours of my waking day.”

When Lawrence learned last year that there was a new drug regimen that could cure his disease, he went to his insurance company. It denied him the medication before agreeing on a plan that would have left him responsible for $14,000 of the pills’ $140,000 price tag. Each pill cost $1,000. Supported only by Social Security, he could not have covered the cost.

Eventually a nonprofit group came to his aid and he was able to acquire the drugs. They didn’t work, however, and now he’s drafting emails and letters to his insurance company in pursuit of a new drug he hears will become available.

Lawrence’s financial predicament could apply to patients with a range of chronic conditions, including hepatitis C, HIV, multiple sclerosis and rheumatoid arthritis.

Marty Morgenstern, a board member of Covered California, said the agency should improve on the price cap victory and aim for the root of the problem: the pharmaceutical companies. “They charge irrational prices on specialty drugs and on all drugs, as a matter of fact,” he said. He wants the health exchange to unite with other agencies in the state to negotiate lower drug prices.

“Medi-Cal, Covered California, CalPERS [the benefit group for state employees], workers comp, the prison system, the state mental hospital system—we buy a hell of a lot of drugs,” Morgenstern said. “I’m just wondering if there’s some way we can leverage that, to have some impact on the drug companies.” After realizing that new hepatitis C drugs would cost the state more than $200 million in the next fiscal year, Gov. Jerry Brown called for the creation of a committee to do just that.

To help people who suffer as pharmaceutical companies profit, caps on drug prices should have been a feature of President Obama’s Affordable Care Act. They weren’t, so it’s up to state governments to protect patients. With enough will among government and citizens, caps can be implemented. Covered California is our Truthdigger of the Week.

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