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The ACA Out-of-Pocket Limit: Good and Bad News for Hematology Patients

December 30, 2021
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Although the act sets limits on the out-of-pocket expenses a patient might face, many costs associated with hematologic care may fall outside of the limit.

It is a truth universally acknowledged: paying for medical care presents a financial hardship for many Americans. As physicians in the hematology and oncology arena know, patients with chronic hematologic conditions will likely face even greater financial costs. Less well-known though, is a measure of the Patient Protection and Affordable Care Act (ACA) designed to lighten the financial burden of treating these chronic conditions: the institution of an out-of-pocket maximum or limit.

According to HealthCare.gov, the out-of-pocket limit is the most that individual enrollees have to pay during a policy period before their health insurance coverage plan starts to pay 100 percent for covered essential health benefits.1

For 2015, the maximum-out-of-pocket limits are $6,600 for an individual plan and$13,200 for a family plan. This limit must include deductibles, coinsurance, copayments, or similar charges, and any other qualified medical expense for those essential health benefits.

"In the past, your coverage plan might have had an out-of-pocket maximum, but it was not required to," Johanna Gray, MPA, vice president of Cavarocchi, Ruscio, Dennis Associates, a government relations, public policy, and strategic development firm that works with the Society, told ASH Clinical News.

It is important for patients to know what is and is not included in the out-of-pocket limit, she added. "That $6,600 and$13,200 limit only applies to essential health benefits, and does not include monthly premiums, balance billing amounts for non-network providers and other out-of-network cost-sharing, or money spent on drugs that are not covered or non-essential health benefits."

The out-of-pocket limit protections began in January 2014, but many large health insurance companies were not required to include these maximums until January 1, 2015. Grandfathered plans, or those in existence prior to the ACA being signed into law in 2010, do not have to comply at all.

In addition, some employer-provided plans may set out-of-pocket maximums below these levels; these lower limits, however, may not include the prescription drug plan, which can have its own maximum limit. This is allowed as long as the two out-of-pocket maximums do not exceed the maximum out-of-pocket limits set forth by the government.

Are Narrowing Networks Squeezing out Hematologic Care?
The out-of-pocket limits that were implemented this year may help to keep health-care costs manageable for many individuals, but, for patients with chronic conditions, the costs can still pile up.

"Anyone with a chronic hematologic condition will likely reach their out-of-pocket maximum fairly quickly, simply due to the number of office visits and prescription drugs involved in treating these conditions," said Alicia Silver, MPP, a health policy analyst specializing in payer policy and legislative relations at the National Marrow Donor Program/Be The Match.

For example, the main treatment for hemophilia and other bleeding disorders is an expensive clotting factor replacement therapy; some patients undergo infusions with clotting factors on a regular basis to prevent bleeding.

The costs of those frequent treatments add up, Ms. Gray explained. "The average cost for severe hemophilia – just for medication – is about $300,000 per year. Depending on what insurance covers, a patient may need to pay 10 percent of each month's prescription costs or even more," she said. In other words, a person may have to put out their entire out-of-pocket maximum, up to$6,600, within the first few months of the year.

Patients with chronic hematologic conditions face other challenges, as well. As mentioned earlier, copays and coinsurance costs are only applied to the maximum 6,600 limit if they are considered to be in-network costs. And, while the ACA set minimum standard requirements for health insurance plans, the required composition of providers offered within each network was not mandated. That can cause big problems for patients with hematologic malignancies. One examination of policies sold on insurance exchanges in California, New York, Florida, and Texas found that coverage varied widely for people with hematologic malignancies – specifically, those who might need any of the three most commonly used drugs to treat chronic myeloid leukemia (imatinib, nilotinib, and dasatinib) or the five most commonly used drugs for multiple myeloma (thalidomide, lenalidomide, pomalidomide, cyclophosphamide, and melphalan).2 Although most policies analyzed covered all three chronic myeloid leukemia drugs and most of the multiple myeloma drugs, coverage of these drugs varied from plan to plan and the majority required prior authorization. "With health insurance exchange plans, we are seeing networks becoming much narrower," Ms. Silver said. This is particularly problematic for hematopoietic cell transplant patients, "because a transplant center or hematologist may not be available in every network in the plans." In fact, that 2014 report stated that most of the exchange plans examined did not cover all National Cancer Institute–designated cancer centers or transplant centers â€” and some plans failed to cover any.2 In September 2014 ASH, together with the National Marrow Donor Program and the American Society for Blood and Marrow Transplantation, sent a letter to the administrator of the Centers for Medicare and Medicaid Services (CMS) discussing concerns about the possible inadequacy of networks if the existing Medicare Advantage network adequacy standards were applied to plans offered for purchase in the health-care marketplace.3 Specifically, "the current Medicare Advantage network adequacy standards do not require plans to include hematopoietic stem cell (bone marrow) transplant facilities in their networks and CMS does not include hematologists on its required provider specialties for patient access." "Patients with conditions requiring transplant should check to see if their hematologist is in-network before signing up for a specific plan or going to visit their doctors," Ms. Silver advised. In some cases, health insurance companies will make exemptions and patients can try to advocate for coverage if they have a chronic illness, she added. "This is especially applicable for someone with a blood cancer who can show that they have been in the care of a specific physician for a long period of time," Ms. Silver said. Out-of-Pocket Versus In-Pocket The out-of-pocket maximum limits set at6,600 and $13,200 per year are great news – for those who can afford them. But how do low-income individuals and families handle expenses that dig too deep into their pockets? If they meet certain income qualifications, people with lower household incomes who are not eligible for Medicare, Medicaid, the Children's Health Insurance Program, or other forms of public assistance can qualify for a premium tax credit that sets a cap on the amount a person or family must spend on their monthly health insurance payments. In addition, people with low incomes who have purchased at least a silver-level plan through the marketplace may also qualify for financial assistance through cost-sharing subsidies, which reduce their out-of-pocket limit. For example, with a cost-sharing reduction, a person at 100 to 150 percent of the federal poverty level would have an adjusted out-of-pocket maximum of$2,250 for an individual and \$4,500 for a family.4

Both of these cost-saving elements, however, are only available to people who purchase their coverage through marketplace exchanges.

What Can Physicians Do?
Presumably, like many physicians, Kenneth Adler, MD, a hematologist/oncologist with Regional Cancer Care Associates in Morristown, New Jersey, admits that when seeing patients with chronic hematologic conditions or malignancies, his time is prioritized for discussing patient care, concerns, and treatment options – not necessarily insurance or billing issues. To discuss these issues, his office relies on knowledgeable, well-informed professionals to discuss insurance concerns and educate patients about out-of-pocket maximums.

When it comes to guiding patients to the best possible coverage, though, the information that physicians provide about patient care and treatment options is still valuable, according to Peter Shin, PhD, MPH, an associate professor of health policy and management at George Washington University.

"Physicians should be discussing what types of follow-up patients may need for their condition – whether it's at three months, six months, or one year – and what types of prescription costs may be associated with the treatment of their diseases," Dr. Shin said. "Arming them with this type of information will go a long way to helping them understand what their potential out-of-pocket costs may be."

"Many patients do not necessarily know about or understand the out-of-pocket maximum, or terms like â€˜copay' or â€˜coinsurance,'" Ms. Silver pointed out. Working with patients to improve their overall health literacy should be ranked among a physician's office priorities.

According to a 2013 survey of Americans with private health insurance published in the Journal of Health Economics, the majority of respondents (more than 90%) reported being confident about their understanding of health-care-related concepts such as deductibles, copays, and the out-of-pocket limit, but only 57 percent reported an understanding of coinsurance.6 When asked to prove that knowledge through correct responses to questions about these concepts, only 78 percent understood deductibles and only 34 percent understood coinsurance. Overall, only 14 percent of respondents were able to answer questions about all four concepts correctly.

"For most people, these are all complicated topics, and people only learn about these terms when they have to," said Ms. Gray, who added that more education about navigating health insurance may be necessary, particularly for patients newly diagnosed with a chronic hematologic condition.

According to Dr. Shin, patients who need assistance understanding this information or selecting a plan can use Outreach Enrollment Navigators. However, "these navigators are most commonly able to inform patients who have chronic conditions such as diabetes or cardiovascular disease, and are not specialized for chronic hematologic conditions." That's where hematologists come in.

"Providers can help direct patients in the kinds of questions to ask and the expected costs of care in the future – that can go a long way to help patients and navigators determine where the best care might be available." â€”By Leah Lawrence

References

1. Healthcare.gov. How to choose Marketplace insurance: Out-of-pocket costs. Accessed from https://www.healthcare.gov/choose-a-plan/out-of-pocket-costs/.
2. Milliman, Inc., NY (commissioned by the Leukemia and Lymphoma Society). 2014 Individual Exchange Policies in Four States: An Early Look for Patients with Blood Cancer. 2014 January 9.
3. Boo M, Giralt S, Williams DA. Letter to Marilyn Tavenner, Administrator of Centers for Medicare and Medicaid Services. Accessed from http://www.hematology.org/Advocacy/Policy-News/2014/Documents/3144.aspx.
4. Patient Protection and Affordable Care Act; HHS Notice of Benefit of Payment Parameters for 2015," Federal Register 79, no. 47 (March 11, 2014): 13744 Accessed from http://www.gpo.gov/fdsys/pkg/FR-2014-03-11/pdf/2014-05052.pdf.
5. American Society of Hematology. Statement from ASH President David A. Williams, MD, on Introduction of the Patients' Access to Treatments Act in the House of Representatives. Accessed from http://www.hematology.org/Newsroom/Press-Releases/2015/3864.aspx.
6. Loewenstein G, Friedman JY, McGill B, et al. Consumers' misunderstanding of health insurance. J Health Econ. 2013;32:850-862.