The New England Journal of Medicine: Using Drugs to Discriminate — Adverse Selection in the Insurance Marketplace

The New England Journal of Medicine: Using Drugs to Discriminate — Adverse Selection in the Insurance Marketplace

By Douglas B. Jacobs, Sc.B., and Benjamin D. Sommers, M.D., Ph.D.

Eliminating discrimination on the basis of preexisting conditions is one of the central features of the Affordable Care Act (ACA). Before the legislation was passed, insurers in the nongroup market regularly charged high premiums to people with chronic conditions or denied them coverage entirely. To address these problems, the ACA instituted age-adjusted community rating for premiums and mandated that plans insure all comers. In combination with premium subsidies and the Medicaid expansion, these policies have resulted in insurance coverage for an estimated 10 million previously uninsured people in 2014.1

There is evidence, however, that insurers are resorting to other tactics to dissuade high-cost patients from enrolling. A formal complaint submitted to the Department of Health and Human Services (HHS) in May 2014 contended that Florida insurers offering plans through the new federal marketplace (exchange) had structured their drug formularies to discourage people with human immunodeficiency virus (HIV) infection from selecting their plans. These insurers categorized all HIV drugs, including generics, in the tier with the highest cost sharing.2

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