24
Presented at the Community Oncology Alliance Annual Meeting April 2014 avalerehealth.net Insurance Exchanges: How Will They Impact Cancer Care?
Presented at the Community Oncology Alliance Annual Meeting April 2014 avalerehealth.net
Insurance Exchanges: How Will They Impact Cancer Care?
Agenda
2
● Exchange Implementation Update & Enrollment
● Essential Benefits Rules for Drug Coverage
● Patient Cost-Sharing & Access Challenges
Revised CBO Estimates Predict 6M Exchange Enrollees and 6M New Medicaid Enrollees in 2014
3
55 44 37 31 31
36 42 46 45 45
6 13 22 24 16 14 14 12 12
158 157 157 155 158
52 53 55 57 58
2013 2014 2015 2016 2017
EXPECTED SOURCES OF COVERAGE (IN MILLIONS), 2013-2017
MedicareEmployerNon-GroupExchangesMedicaid & CHIPUninsured
Updated: February 6, 2014 CBO’s February 2014 Budget and Economic Outlook 2014-2024: http://www.cbo.gov/sites/default/ files/cbofiles/attachments/45010-Outlook2014_Feb.pdf For 2013 Figures: CBO’s May 2013 Estimate of the Effects of the ACA on Health Insurance Coverage: http://www.cbo.gov/sites/default/files/cbofiles/attachments/44190_EffectsAffordableCareActHealthInsuranceCoverage_2.pdf For Medicare Figures: CBO’s May 2013 Medicare Baseline Report: http://www.cbo.gov/sites/default/files/cbofiles/attachments/44205_Medicare_0.pdf Note: Avalere uses data from the trustees to remove non-elderly Medicare from CBO’s non-group line.
States Employing Diverse Models for Exchanges in 2014, With 15 States and DC Operating State-Run Exchanges
4
Source: Avalere State Reform Insights, February 18, 2014 FFE = Federally-Facilitated Exchange MPM = Marketplace Plan Management 1Utah is operating a MPM model for its individual exchange and relying on its existing small group exchange for the SHOP exchange. 2New Mexico is operating a partnership for its individual exchange, using healthcare.gov, but running its own SHOP exchange. Idaho is operating a state-based exchange, but relying on HHS for certain IT and enrollment functions. 3Mississippi is operating a state-based SHOP exchange, but relying on the FFE for its individual exchange.
AK
HI
CA
AZ
NV
OR
MT
MN
NE
SD
ND
ID2
WY
OK
KS CO UT1
TX
NM2 SC
FL
GA AL
MS3
LA
AR
MO
IA
VA
NC TN
IN
KY
IL
MI WI
PA
NY
WV
VT
ME
RI CT
DE MD
NJ
MA NH
WA
OH
D.C.
FFE – MPM (8)
State-Run (15 + DC)
FFE (20)
Partnership (7)
2014 INSURANCE EXCHANGE OPERATIONAL MODEL
0.08 0.23
0.96 1.36 1.60
0.03 0.14
1.20
1.94
2.60
0.11 0.36
2.15
3.30
4.20
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
October November December January February
Healthcare.gov EnrollmentSBE Enrollment
Updated: March 11, 2014, Avalere State Reform Insights These numbers are based on the latest information available from HHS, marketplace press releases, interviews, and news articles. The numbers reflect the most recent enrollment stats from October 1 through February 28. In general, enrollments reflects those choosing a plan. ID will operate a SBE, but will rely on HHS for eligibility and enrollment. FFE= Federally-Facilitated Exchange SBE= State-Based Exchanges QHP= Qualified Health Plan
Enrollment Grew Substantially in February for Both SBE and Healthcare.gov, Reaching 4.2 Million by March 2014
CUMULATIVE ENROLLMENT BY MONTH END, IN MILLIONS
5
Enrollment remains skewed toward older individuals, but participation among young adults (18-34) is increasing—currently 25% of enrollment.
6
PROJECTED EXCHANGE ENROLLMENT PATTERN BASED ON PART D VOLUNTARY ENROLLMENT EXPERIENCE (IN MILLIONS)
0.4
2.2
4.2
5.4
0.6
2.1
4.7
6.0
1.0
3.6
8.1
10.4
One Month Before Deadline for 1/1 Coverage
Coverage Begins 1/1 One Month Before the End of Open Enrollment
End of Open Enrollment
Actual Exchange Enrollment
Exchange Enrollees Neeeded to Reach 6M
Voluntary Part D Enrollees
*Medicare Part D enrollment numbers based off actual Part D enrollees during the initial open enrollment period in 2006. Using the enrollment pattern from Part D and accounting for the differences in length of the open enrollment periods, Avalere projected what a similar enrollment pattern for the exchanges would look like to reach CBOs projected 6M enrollees by the end of the open enrollment period. Source: HHS Health Insurance Marketplace January Enrollment Report. February 12, 2014.
Projected
Based on Medicare Part D Experience, 5.4M Individuals Are Projected to Enroll in Exchanges by the End of March
7
State Enrollment Progress Varies Widely, But Federal Exchange States Have Caught Up in Recent Months
WA
OR
CA
ID
NV
MT
WY
UT
AZ
ND
SD
NE
CO
NM
TX
MN
IA
KS
OK
MO
AR
LA
WI
MI
IL IN OH
PA
NY
ME
VT
NH
MA CT
NJ
WV
KY VA
TN NC
SC
GA AL MS
FL
DE MD
DC
RI
HI
AK
EXCHANGE ENROLLMENT TO DATE AS A PERCENT OF PROJECTED ANNUAL ENROLLMENT FOR 2014
Avalere’s State Reform Insights, March 11, 2014. Avalere’s analysis incorporates the HHS March enrollment figures as well as updated state-specific tracking from publically-available resources. Enrollment projections are based on Avalere’s projections for enrollment distribution by state at the end of 2014 applied to the CBO’s February enrollment projection of 6 million. This approach assumes smooth implementation across states; that is, eligible populations take up coverage at similar rates across states.
TOTAL ENROLLMENT AS % OF 2014 ESTIMATE
39% and below (7)
80% or above (12)
40%-59% (21) 60%-79% (11)
Plans in the Individual and Small Group Market, Including the Exchanges, Must Cover the Essential Health Benefits
8
Deductibles in the small group market limited to $2,000 (individuals) and $4,000 (families)
Deductible Limits
OOP cap of $6,350 for individuals & $12,700 for families in 2014 OOP Limits
Cost sharing is guided by metal levels in the exchange Actuarial Value (AV)
Must cover 10 categories of essential health benefits, including prescription drugs
Essential Health
Benefits
Actuarial Value = A measure of a benefit generosity that is expressed as percent of expenses paid by the insurer HSA = Health Savings Account
9
● In February 2013, CMS released a final rule on essential health benefits
● For prescription drug coverage, the rule requires plans to cover:
● USP: CMS will use the most recent United States Pharmacopeia (USP) Model Guidelines to determine the list of categories and classes
● Drug Counts: CMS counts distinct chemical entities – does not include dosage strength or extended release
● Access: Plans may still apply utilization management and formulary tiers
● Medical Necessity: Plans must have procedures in place to ensure enrollees have access to medically necessary drugs that are not included on the plan’s formulary
The same number of prescription drugs in each category and class as the EHB
benchmark plan
In classes not covered by the benchmark, one drug in every category
and class OR
Drug Coverage in Exchanges Must Meet Minimum Federal Standards for Essential Health Benefits
Physician-administered drugs will not be subject to these requirements.
More Than 60% of Enrollees Have Chosen Silver Plans, Bronze Products the Next Most Popular Selection
1% 1% 1%
18% 16% 23%
63% 67% 58%
11% 11% 10%
6% 5% 8%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Total FFE SBE
EXCHANGE ENROLLMENT BY METAL TIER*
PlatinumGoldSilver*BronzeCatastrophic
Updated: March 11, 2014, Avalere State Reform Insights FFE = Federally-Facilitated Exchange SBE = State-Based Exchange *Silver tier enrollment includes enrollees with cost-sharing reductions Note: May not sum to 100% due to rounding. 10
Silver plan enrollment includes people receiving cost-sharing subsidies (<250% FPL)
Premiums Vary By Age, Metal Level, and Geography— Could Be Difficult to Afford for Older Enrollees
11
$259 - TN
$335 - TN
$401 - UT
$324 - UT $362
$439
$520 $531 $535 - WY
$619 - AK
$710 - AK $760 - NJ
$-
$100
$200
$300
$400
$500
$600
$700
$800
Bronze Silver Gold Platinum
MO
NTHL
Y PR
EMIU
M
METAL LEVEL
AVERAGE PLAN PREMIUMS FOR 50 YEAR OLDS IN FEDERAL EXCHANGE STATES BY METAL LEVEL
Lowest Average Premium Average FFE Premium Highest Average Premium
Source: Avalere PlanScape, Updated November 1, 2013. Avalere collected plan information from both federally-facilitated and state-based exchanges and captured a sample of over 600 plans for the analysis.
Of individuals who purchased exchange coverage, 82% will receive premium assistance.
Exchange Plan Deductibles are High, Especially in Bronze and Silver Plans
12
$4,959
$3,132
$1,713
$1,000
$-
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
BronzeN=175
SilverN=207
GoldN=160
PlatinumN=61
MED
ICAL
DED
UC
TIBL
E AVERAGE MEDICAL DEDUCTIBLES BY METAL LEVEL
*Average deductible for individual coverage ESI = Employer –Sponsored Insurance Source: Kaiser Family Foundation/ HRET 2013 Employer Health Benefits Survey; Source: Avalere PlanScape, Updated January 28, 2014. Avalere analysis HHS data file of all exchange plans in FFM states.
Employer: $1,135*
Drugs are usually not subject to the deductible in employer-sponsored plans
Deductibles
• 14% of plans had a separate drug deductible
• Not all formulary tiers are subject to the deductible
Exchange Plan Formulary Coverage for Self-Administered Oncology Drugs Is Similar to Employer Plans
13
0
5
10
15
20
25
30
35
NUMBER OF DRUGS COVERED IN PLAN FORMULARIES, BY CLASS1
1. Average for the class across 84 plans analyzed 2. Includes Enfuvirtide, Maraviroc, Raltegravir 3. Average includes brands and generics Source: Avalere Health PlanScape,™ a proprietary analysis of exchange plan features. Data as of October 31, 2013.
NNRTI = Non-Nucleoside Reverse Transcriptase Inhibitors; NRTIs: Nucleoside and Nucleotide Reverse Transcriptase Inhibitors; Pis: Protease Inhibitors; Antihep: Antihepatitis agents; SSRIs/SNRIs: Serotonin/ Norepinephrine Reuptake Inhibitors; AD-Other: Antidepressants, other; Atypicals: 2nd Generation/Atypical Antipsychotics; Immunosup: Immune Suppressants; Emetogenics: Emtogenic Therapy Adjuncts; Bone Disease: Metabolic Bone Disease Agents; Alkylating: Alyklating Agents; MTIs: Molecular Target Inhibitors; SERMs: Selective estrogen receptor modifying agents; MS = Multiple Sclerosis Agents; B2 agonists = Bronchodilators, Sympathomimetic; ICS = Anti-inflammatories, Inhaled Corticosteroids
NU
MBE
R O
F D
RU
GS
CO
VER
ED
Average Covered3
Total Drugs in Class Maximum Covered Minimum Covered
Employer Average
However, Utilization Management Is Much More Common in Exchange Plans Than Employer Coverage
14
RATE OF UTILIZATION MANAGEMENT IN EXCHANGE PLANS VS. EMPLOYER PROVIDED COVERAGE1
27% 16%
30% 43%
42% 41%
Employer Exchange
ONCOLOGY R
ATE
OF
UTI
LIZA
TIO
N M
ANAG
EMEN
T
1. Single-source branded drugs across 84 plans, bronze and silver; a small percentage of plans in the sample had no UM data ; Mental Health includes 4 USP classes, oncology includes 6 classes,
Source: Avalere Health PlanScape,™ a proprietary analysis of exchange plan features. Data as of October 31, 2013.
NNRTI = Non-Nucleoside Reverse Transcriptase Inhibitors; NRTIs: Nucleoside and Nucleotide Reverse Transcriptase Inhibitors; Pis: Protease Inhibitors; Antihep: antihepatits agents; SSRIs/SNRIs: Serotonin/ Norepinephrine Reuptake Inhibitors; AD-Other: Antidepressants, other; Atypicals: 2nd generation/Atypical Antipsychotics; Immunosup: Immune Suppressants; Emetogenics: Emtogenic Therapy Adjuncts; Bone Disease: Metabolic Bone Disease Agents; Alkylating: Alyklating Agents; MTIs: Molecular Target Inhibitors; SERMs: Selective estrogen receptor modifying agents; MS = Multiple Sclerosis Agents; B2 agonists = Bronchodilators, Sympathomimetic; ICS = Anti-inflammatories, Inhaled Corticosteroids
Coinsurance Is Common for Oncolytics, Particularly Molecular Target Inhibitors & Antiangiogenics
15
0%10%20%30%40%50%60%70%80%90%
100%
Bone Disease Alkylating MTIs Antiangiogenics SERMs Emetogenics
FREQUENCY OF COPAYMENT VS. COINSURANCE BY AMOUNT FOR SINGLE SOURCE BRANDED DRUGS IN IN SILVER PLANS
Copayment Coinsurance: 0-20% Coinsurance: 21-30%Coinsurance: 31-40% Coinsurance: >40% Not Covered
1. Includes Enfuvirtide, Maraviroc, Raltegravir Source: Avalere Health PlanScape,™ a proprietary analysis of exchange plan features. Data as of October 31, 2013.
FREQ
UEN
CY
OF
C
OST
-SH
ARIN
G T
YPE
Case Study: Despite Health Care Reform’s OOP Limit, Patients With Rare Diseases Will Face High Initial Costs for Their Drugs
0
1000
2000
3000
4000
5000
6000
7000
First Month's Rx Fill Second Month
ESTIMATED DRUG SPENDING FOR RARE DISEASE PATIENTS IN EXCHANGE COVERAGE
Assumes $15,000 Monthly Drug Cost
VT Silver HDHPCA Silver Coinsurance PlanMA, NY Silver Plans*OR Silver PlanCT Standard Silver
Source: Avalere Health analysis based on states’ 2014 standardized benefit designs for silver-level plans in their exchanges. Calculations are based on a prescription drug with a cost of $15,000 per month that is placed on a plan’s highest-cost formulary tier. Assumes no other drug or medical spending by the patient during the year. * MA and NY each have a standard silver plan design with the same overall deductible amount, tier 3 cost sharing, and OOP maximum, although the benefit designs differ on cost sharing amounts for other services not included in this analysis. 16
Even with Subsidies and Cost Sharing Reductions, Most Chronically Ill Patients Will Be Underinsured in the Exchanges
17
20%
13%
23% 22%
18%
14%
11%
0%
5%
10%
15%
20%
25%
100% FPL 150% FPL 200% FPL 250% FPL 300% FPL 400% FPL 500% FPL
OUT-OF-POCKET CAP AS A PERCENT OF INCOME1
OOP cap as a % of income Underinsured threshold
1. Based on CWF definition: out-of-pocket expenses equaled 10% or more of income; out-of-pocket expenses equaled 5% or more of income if low income (<200% of poverty); or deductibles equaled 5% or more of income. Available at: http://www.commonwealthfund.org/~/media/Files/Publications/Fund%20Report/2013/Apr/1681_Collins_insuring_future_biennial_survey_2012_FINAL.pdf
Exchange Plans Are Typically Covering Physician-Administered Drugs Under the Medical Benefit
18
Coverage
• Most exchange plans are covering medical benefit drugs using the same coverage policies that apply to their commercial plans
• Only one plan reviewed has issued exchange-specific coverage policies for some products
Cost-Sharing
• In most cases, plans are covering physician-administered drugs under the medical benefit with cost-sharing included in the office visit—similar to commercial coverage today
• Only one plan that we reviewed is charging a separate copay for physician-administered drugs • $60 per script up to a
$240 maximum
Transparency
• It is difficult to determine whether medical benefit drugs are covered by a plan and virtually impossible to determine whether separate cost-sharing applies
• 60% of plans do not have this information on their website
• By phone, 93% of customer service representatives were unable to confirm coverage or cost-sharing for physician-administered drugs
EXCHANGE PLAN COVERAGE & COST-SHARING FOR PHYSICIAN ADMINISTERED DRUGS
To Keep Premiums Down, Issuers Designed Narrow Provider Networks That May Exclude Leading Cancer Centers
19
● Narrow QHP networks often exclude leading cancer research hospitals.
Network Limitations May Impact Access in Exchange Plans in the Short-Term and Other Commercial Plans in the Long-Term
● January 2014 report from Milliman and the Leukemia and Lymphoma Society
assess access to treatment for blood cancers in four states: CA, NY, FL, and TX
● Report found that many exchange plans include only a limited number of National
Cancer Institute designated cancer and transplant centers in-network
20
Source: Milliman. “2014 Individual Exchange Policies in Four States: An Early Look for Patients with Blood Cancer.” January 9 ,2014.
3 of 13 number of surveyed exchange plans that
include M.D. Anderson in-network in Texas
3 of 16 number of surveyed exchange plans that
include Memorial Sloan-Kettering in-network in NY
Potential Patient Access Issues in Exchanges
Formulary Breadth Plans are narrowing formularies and may not cover patients’ medications
Out-of-Pocket Costs Silver & Bronze plans include high
deductibles and per-script cost-sharing
Premium Affordability Some previously uninsured patients
may struggle to pay premiums
Cost-Sharing Subsidies Some silver variation plans limit the deductible but not coinsurance on
Tier 3+
21
22
Exchange Benefit Design May Accelerate Shift to Narrower Commercial Coverage by Employers EXCHANGE BENEFIT DESIGNS MAY HAVE SPILLOVER EFFECTS BY SETTING A NEW STANDARD FOR COVERAGE GENEROSITY
Commercial
Exchange
Lives Served by Market Today
Anti c i pated Future Market
Less Generous More Generous
Benefit Design Generosity
Medicaid Catastrophic
Key Takeaways on Access to Oncology Treatments in Exchanges
● Enrollment: 2014 exchange enrollment is likely to be lower than initial projections but sufficient to maintain
these new markets, which will grow in future years
− Older, higher-need patients—likely including cancer patients—have signed-up first for coverage
● Drug Coverage: Exchanges are covering oncology drugs similarly to commercial plans, but rates of
utilization management are much higher and may be barriers to access
− Providers will need to work with patients to file prior authorizations needed to access oncolytics
● Cost-Sharing: Oncology drugs face very high cost-sharing in exchanges and may not be affordable for
patients
− High deductibles will result in extremely high costs early in the year for Silver and Bronze plan enrollees
− Coinsurance rates >30% could result in thousands of dollars of cost-sharing at the pharmacy counter
− Cost-sharing for physician-administered drugs will be much lower
− Most drug companies are moving ahead with copay assistance programs in the absence of clear federal
guidance
● Provider Networks: Provider networks are very limited and some leading cancer centers are excluded
from most exchange plans
23
