November 2013 Edition Vol.11, Issue 11

The Evolving Landscape of Payment Care Delivery and Manufacturer Implications of Coverage Expansion

The Evolving Landscape of Payment Care Delivery and Manufacturer Implications of Coverage Expansion (continued)

As state health insurance exchanges become available in 2014, they are fortunately expected to limit OOP costs, although costs will remain significant and patients will continue to need financial assistance. OOP costs are expected to vary for the newly insured, adding to the complexity of their benefit design. Such costs have not been incurred in the past and will pose new hurdles to the affordability of healthcare. The underinsured and low- to moderate-income populations covered by the state exchanges are most likely to be affected, as OOP costs may range from slightly less than $2,000 to approximately $6,000 per year. Recent estimates2 by Kaiser Family Foundation indicate deductibles in bronze and silver plans would be high enough to qualify as HDHPs and could be paired with a health savings account.  These types of plans may lead to patients having difficulties in affording cancer care.  Accordingly, as patients will have varying levels of coverage, manufacturer assistance will need to extend to those identified beneficiaries within the exchanges.

As healthcare reform evolves, HDHPs may continue to increase in plan share, as employer groups look to reduce costs and shift more of the liability to employees. Additionally, the health exchanges―in the case of bronze and silver plans―will likely resemble HDHPs.

Manufacturer Implications of Coverage Expansion

 

Changes to Cancer Payer Mix Due to Coverage Expansion

Manufacturers will need to monitor payer mix in light of coverage expansion under the ACA with the state exchanges and the expansion of Medicaid. Commercially insured and uninsured patients are eligible for manufacturer-designed patient assistance programs (PAP), whereas all patients are eligible for assistance from charitable foundations. Foundations represent the only option for Medicare patients. Understanding the simple breakdown between these groups is important, as is understanding the co-pay levels for those with prescription drug co-pays or coinsurance. This information can inform how to design a PAP and what charitable foundation contributions to make.  Figure 3 projects that change in payer mix for the U.S. population through 2021.

A basic understanding of OOP costs for patient therapy starts at understanding the percentage of patients too young to receive Medicare and those who are eligible to receive Medicare. It is also important to realize that the drug-treated populations of most cancers will be of different age mixes than the incident or prevalent populations; thus these populations each will have a different payer mix. On top of that, the mix of drug-treated patients will have varying levels of pharmacy benefit (coverage for oral therapies and other self-administered drugs) versus medical benefit (coverage for physician-administered drugs mainly including intravenous oncology therapies). For example, understanding the percentage of commercially insured patients with a coinsurance rather than co-pay for oral therapies is important as patient cost-shifting is increasing.

Cancer is generally considered a disease of the elderly, with Medicare as the primary payer; however, certain cancers can have an equivalent mix or more commercially insured patients. For example, Medicare is the predominant payer for NSCLC. In contrast, chronic myelogenous leukemia has a nearly equal mix of commercial and Medicare lives.   

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