FTC Sues Major PBMs for Unfair Practices Affecting Drug Costs

Pharmacy Benefit Managers (PBMs) have long been influential yet often obscure intermediaries in pharmaceutical pricing and distribution. They negotiate drug prices with manufacturers, develop formularies for health plans, and manage pharmacy networks. Today, the three largest—CVS Caremark, Express Scripts, and OptumRx—control about 80% of the market.

On September 20, 2024, the Federal Trade Commission (FTC) filed an administrative complaint against these major PBMs and their affiliated group purchasing organizations (GPOs). The complaint alleges that they engaged in anticompetitive and unfair rebating practices, artificially inflating insulin prices and impairing access to lower-cost alternatives.

The FTC's action marks a critical juncture in the struggle for fair drug pricing and access, emphasizing the need for robust enforcement and comprehensive PBM reform. The outcome could reshape the healthcare industry and significantly impact care across the United States.

The FTC's Case Against PBMs

The FTC alleges that PBMs have engaged in anticompetitive and unfair rebating practices that have artificially inflated the list prices of insulin and other essential medications. Grounded in Section 5 of the Federal Trade Commission Act, which prohibits unfair competition and deceptive practices, the FTC asserts that PBMs' rebate strategies and patient steering harm consumers and competition.

For example, the list price of Humalog, a widely used insulin product, increased from $21 in 1999 to over $274 in 2017—a rise of more than 1,200%. The FTC argues that this dramatic inflation is linked to PBMs' "chase-the-rebate" strategy, where they demand larger rebates from manufacturers in exchange for favorable formulary placement.

Another key aspect of the complaint focuses on patient steering practices. The FTC alleges that PBMs have systematically excluded lower-cost insulin alternatives from their formularies in favor of higher-priced options that generate larger rebates. This practice limits choice and forces many to pay more out-of-pocket for their medications.

Rahul Rao, Deputy Director of the FTC's Bureau of Competition, emphasized: "Millions of Americans with diabetes need insulin to survive, yet for many of these vulnerable patients, their insulin drug costs have skyrocketed over the past decade thanks in part to powerful PBMs and their greed."

The FTC seeks to fundamentally change how PBMs operate. The complaint aims to prohibit PBMs from excluding or disadvantaging lower-cost versions of drugs, prevent them from accepting compensation based on a drug's list price, and stop them from designing benefit plans that base out-of-pocket costs on inflated list prices rather than net costs.

FTC Chair Lina Khan stated, "The FTC's administrative action seeks to put an end to the Big Three PBMs' exploitative conduct and marks an important step in fixing a broken system—a fix that could ripple beyond the insulin market and restore healthy competition to drive down drug prices for consumers."

Impact on People Living with HIV

While the FTC's case primarily focuses on insulin pricing, PBM practices significantly affect people living with HIV (PLWH) and other chronic conditions. Recent cases highlight the challenges faced in accessing affordable medications due to PBM and insurer practices.

In April 2024, CVS Health failed in its latest attempt to dismiss a class action lawsuit alleging discrimination against PLWH by requiring them to receive medications via mail order, limiting access to essential pharmacy services and counseling. U.S. District Judge Edward Chen noted that CVS was on notice that this program could likely discriminate against PLWH, as plaintiffs had repeatedly requested to opt out.

In another case, the U.S. Department of Health and Human Services Office for Civil Rights (OCR) closed a complaint without penalties against Blue Cross Blue Shield of North Carolina (BCBS NC) after the insurer lowered the pricing tier for HIV medications. The original complaint alleged that BCBS NC had placed almost all HIV antiretroviral medications, including generics, on the highest-cost prescription tiers.

While BCBS NC changed its formulary, the lack of penalties raises concerns about enforcement and accountability. Carl Schmid, executive director of the HIV+Hepatitis Policy Institute, expressed disappointment: "It was incredibly disheartening and deeply concerning to see them let the state's largest insurer get away with such blatant discrimination."

These cases illustrate how PBM practices and insurer policies create significant barriers to care for people living with HIV. High out-of-pocket costs, restricted pharmacy access, and discriminatory formulary designs can lead to medication non-adherence, resulting in adverse health outcomes and increased healthcare costs in the long term.

In North Carolina, about 37,000 people are living with HIV, with Black people representing 58% of new HIV diagnoses despite being only 22% of the state's population. Nationally, according to the Centers for Disease Control and Prevention (CDC), approximately 1.2 million people in the United States are living with HIV. PBM practices that inflate drug costs or limit access exacerbate these disparities and hinder efforts to end the HIV epidemic.

PBM Practices Under Scrutiny

The FTC's complaint has brought controversial PBM practices into sharp focus, highlighting concerns long raised by patients, healthcare providers, and policymakers.

The FTC's interim staff report reveals that PBMs often prioritize higher rebates over lower net prices, leading to exclusion of lower-cost alternatives and driving up drug prices—a practice known as "rebate walls." Patient steering directs consumers to PBM-owned pharmacies, limiting choice and disadvantaging independent pharmacies.

A Congressional hearing in July 2024 further exposed these issues. PBM executives faced tough questioning about their role in rising prescription drug costs. Lawmakers pressed the executives on how PBMs have monopolized the pharmaceutical marketplace and pushed anticompetitive policies that undermine local pharmacies and harm patients.

Representative Virginia Foxx (R-N.C.) highlighted the lack of transparency, questioning PBM executives about the pass-through of rebates and fees to plan sponsors. The executives' responses did little to clarify the complex and opaque financial flows within the PBM industry.

PBMs defend their practices as necessary for managing drug costs. Phil Blando, Executive Director for Corporate Communications at CVS Caremark, stated, "We work to negotiate the lowest net cost for drugs... driving better health outcomes and lower out-of-pocket costs for consumers." However, critics argue that these claimed benefits are not reflected in patient experiences or overall drug pricing trends.

Real-World Impact on Patients and Pharmacies

Jeremy G. Counts, PharmD, a spokesperson for Pharmacists United for Truth and Transparency (PUTT), explains that the vertical integration of the Big Three PBMs allows them to limit access through restrictive networks, under-reimbursement, and aggressive patient steering. These practices harm independent pharmacies and jeopardize health by disrupting continuity of care.

• Restrictive Networks and Steering: PBMs often require patients to use their own pharmacies, frequently through mail order, misleading them into believing they have no other options. Even when plans allow the use of independent pharmacies, PBMs make it tedious to opt out, effectively limiting choice.

• Under-Reimbursement and Clawbacks: Independent pharmacies that serve patients despite low reimbursements face financial strain. PBMs may pay below cost or use fees and recoupment methods to claw back margins, forcing some pharmacies to turn away patients.

• Barriers to Medication Access: PBMs impose onerous prior authorization processes for medications that do not provide them with high rebates, delaying care and increasing costs. Counts notes that this has become a deadly issue in oncology care.

• Aggressive Patient Pursuit: For profitable medications, PBMs aggressively pursue patients and their prescriptions, sometimes transferring prescriptions without permission or shipping medications without their knowledge.

These practices not only harm independent pharmacies but also jeopardize health by disrupting access to necessary medications.

Healthcare consultant Rita Numerof calls the FTC's investigation a "pivotal moment" in reforming the industry to serve patients' best interests.

The Need for Enforcement

The lack of punitive action in cases like the BCBS NC complaint raises concerns about the effectiveness of current enforcement mechanisms. Carl Schmid of the HIV+Hepatitis Policy Institute pointed out, "Without action to improve federal and state regulation, oversight, and enforcement, such discriminatory practices will continue." The BCBS NC case demonstrates that while policy changes can be achieved through advocacy and complaints, there is often little consequence for discriminatory practices.

Counts emphasizes that "PBMs are masters at derailing legislative attempts to rein them in." He argues that FTC enforcement is critical, as PBMs often ignore laws unless compelled to comply. Counts asserts that attacking the problem from multiple fronts is essential, and FTC action provides immediate and targeted intervention.

PBM Response and Industry Perspective

In response to mounting scrutiny, PBM executives have defended their practices. During the July 2024 Congressional hearing, leaders from CVS Caremark, Express Scripts, and OptumRx maintained that they do not engage in patient steering or discriminatory practices. They argued that PBMs play a crucial role in negotiating lower drug prices and improving healthcare affordability.

David Joyner, president of CVS Caremark, stated, "We're making health care more affordable and accessible for the millions of people we serve every day."

However, these assertions have been met with skepticism. The House Committee on Oversight and Accountability, led by Chairman James Comer (R-Ky.), has accused PBM executives of making statements that contradict findings about self-benefitting practices.

Legislative Efforts: The Pharmacists Fight Back Act

In addition to regulatory actions by the FTC, legislative initiatives are crucial for comprehensive reform. The Pharmacists Fight Back Act (H.R. 9096), introduced by Representatives Jake Auchincloss (D-MA) and Diana Harshbarger (R-TN), aims to:

1. Establish Standard Pharmacy Reimbursement:

   • Proposes a reimbursement model based on the National Average Drug Acquisition Cost (NADAC) plus a state dispensing fee and an additional 2%. This model prevents underpayment to independent pharmacies and curbs price gouging by PBM-owned pharmacies.

2. Prohibit Predatory PBM Tactics:

   • Seeks to ban practices such as steering patients to PBM-owned pharmacies, exclusionary network designs, retroactive fees, spread pricing, and reimbursement clawbacks.

3. Mandate Rebate Transparency and Application:

   • Requires that 80% of all PBM-negotiated rebates and fees reduce patients' out-of-pocket costs, with the remaining 20% lowering insurance premiums.

Counts stresses the urgency of passing this legislation to save pharmacies and reduce drug pricing: "Its immediate passage is critical to stopping the pharmacy closure and drug pricing crisis in this country."

Potential Outcomes and Industry Impact

If successful, the FTC's action could reshape the pharmaceutical industry by forcing PBMs to prioritize lower net drug prices, benefiting patients with more affordable medications and increased pharmacy choice. A ruling against PBMs could set a legal precedent, opening the door for further regulatory action or private lawsuits against PBMs and other healthcare intermediaries.

Independent pharmacies stand to benefit considerably from potential reforms. If the FTC's action results in more transparent pricing practices and limitations on patient steering, these businesses may be better able to compete with PBM-owned pharmacies.

However, given PBMs' significant resources and influence, changes may be hard-fought and take time to implement. There is the possibility that PBMs may find new ways to maintain their market position and profitability.

Impact on Independent Pharmacies

Independent pharmacies are closing at an alarming rate—nine per day, with 2,275 closures so far in 2024. This trend reduces access to personalized care and diminishes competition, further consolidating PBMs' market power.

Counts conducted a study in Virginia, matching pharmacy closures against openings using data from the Virginia Board of Pharmacy. He found that "community pharmacies are closing at twice the rate they are opening, and this rate is accelerating." Without significant reform, including FTC enforcement and the passage of H.R. 9096, the pharmacy infrastructure in the United States will continue to erode.

Conclusion and Call to Action

The FTC's actions, along with legislative efforts like the Pharmacists Fight Back Act, are critical steps toward creating a fairer pharmaceutical industry that prioritizes access and affordability.

We urge readers to:

1. Stay Informed: Follow developments in PBM regulation and reform efforts.

2. Research Legislation: Contact your representatives to inquire about pending legislation.

3. Engage with Advocacy Groups: Support organizations like PUTT (www.truthrx.org) and the HIV+Hepatitis Policy Institute (www.hivhep.org).

4. Share Experiences: Raise awareness by sharing your experiences with PBM practices. PUTT is collecting stories to highlight the real-world impact of PBM practices. Visit their PBM Horror Stories page to share your story anonymously.

Collective action is essential to ensure meaningful and lasting change in drug pricing and access. The FTC's action is a significant step, but it's up to all of us to ensure this momentum leads to a more transparent, equitable, and patient-centered healthcare system in the United States.

Closing the EHB Loophole: Louisiana Leads, But National Action is Needed

"Jason," a Utah AIDS Foundation client, confronted a brutal truth in the wake of his HIV diagnosis: a healthcare system more interested in profits than patients. Faced with a staggering $3,200 co-pay for his HIV medication—well beyond his financial reach—Jason's plight was exacerbated by his insurance company's implementation of a co-pay accumulator policy. This policy effectively nullified the assistance he once relied on, leaving him stranded without his medication for months. "I felt scared and discouraged when I was told I have a $3,200 co-pay to pick up my HIV meds. I don’t even make that much money each month," Jason shared, his voice a stark indictment of a system failing its most vulnerable. His story, spotlighted by The Utah All Copays Count Coalition, underscores a pervasive issue: patients across the nation are cornered into impossible choices between health and financial ruin, casualties of an insurance industry's practices that blatantly prioritize margins over meaningful care.

Understanding the Problem

Jason's heartbreaking story sheds light on interconnected issues fueling the healthcare affordability crisis: co-pay accumulators and the Essential Health Benefits (EHB) loophole. These tactics have a devastating effect on patient well-being, so let's break them down:

Co-pay Accumulators: A Profit-Driven Scheme at the Expense of Patients

These programs allow insurers to take the value of manufacturer-provided coupons or patient assistance and apply it towards an annual deductible, but not towards a patient's out-of-pocket maximum. This means even with generous assistance, patients can face thousands of dollars in additional costs, forcing them to ration medication or abandon treatment altogether. The numbers reveal the widespread impact:

• The AIDS Institute reports that co-pay accumulator adjustment programs (CAAPs) are present in a shocking 66% of individual Affordable Care Act (ACA) marketplace plans nationwide, with some states showing 75-100% of available plans utilizing these tactics.

Co-pay Maximizers: A Further Threat to Affordability

Insurers are increasingly employing an even more severe tactic known as 'co-pay maximizers'. These programs set a patient's co-pay to the full amount of available assistance, even if it's intended to cover an entire year's medication cost. Unlike accumulators, which prevent assistance from counting towards the out-of-pocket maximum, maximizers essentially 'use up' all available assistance in a single payment. This leaves patients facing the full, often unaffordable, cost of medication for the rest of the year. The combined use of maximizers and accumulators is becoming increasingly common, leaving patients with limited options and magnifying the financial burden of life-saving treatments. A staggering 72% of commercially insured beneficiaries in the United States were enrolled in plans with co-pay maximizers as of 2023, according to a Drug Channels analysis.

This highlights the alarming prevalence of these practices and the immense pressure they place on patients struggling to manage chronic conditions.

The Essential Health Benefits (EHB) Loophole: Insurers Exploit Gaps in Coverage

Under the ACA, states have flexibility in selecting the 'essential' healthcare services that insurers must cover. Some insurers manipulate this system by classifying necessary medications (especially for chronic conditions) as 'non-essential'. This lets them continue using co-pay accumulators and maximizers on these medications, further undermining patient affordability.

• Centers for Medicate & Medicaid Services’ (CMS) data reveals that in many states, critical treatments for chronic disease management are not guaranteed coverage under 'essential' benefits. This means patients could be subject to accumulators and maximizers indefinitely, locked in a cycle of escalating costs even when reaching their out-of-pocket maximums.

The takeaway is clear: these practices prioritize the shareholder profits of insurance companies over the health and well-being of patients, especially those battling chronic and complex conditions.

Federal Action – Progress and Pitfalls

The CMS Notice of Benefit and Payment Parameters for 2025 signals a notable yet incomplete step towards remedying the healthcare affordability crisis. It attempts to close the Essential Health Benefits loophole starting in 2027 by mandating routine, non-pediatric dental coverage as an essential benefit. While seemingly tangential, this amendment serves as a precursor to addressing broader coverage issues, demonstrating the potential to mitigate part of the financial burdens that patients like Jason face. However, it underscores a significant gap in the rule's scope—its silence on co-pay accumulators and maximizers.

Limitations of the CMS Rule Change

The rule change’s failure to directly address co-pay accumulators and maximizers leaves a significant gap in patient protection. These payor-driven barriers systematically undermine patient affordability and access, especially for those managing chronic conditions. The absence of direct action against these schemes allows insurers to deploy cost-containment strategies that, while ostensibly designed to control expenditures, place the financial burden squarely on patients.

This oversight perpetuates financial hardship and deepens healthcare disparities. Accumulator and maximizer practices disproportionately affect marginalized populations, highlighting the limitations of regulatory changes that fail to comprehensively address the complex dynamics of healthcare affordability and access.

Without targeted measures to dismantle these financial mechanisms, efforts to expand coverage and close loopholes may achieve only superficial improvements. A significant portion of the population, particularly those managing chronic diseases, will continue to face insurmountable financial barriers to accessing essential treatments. This situation underscores the need for a more holistic approach to healthcare reform—one that confronts the financial mechanisms impairing patient care and seeks to eliminate systemic practices that prioritize profit over patient well-being.

Court Challenges: A Victory Shadowed by Continued Uncertainty

The battle against co-pay accumulators achieved a notable legal milestone when a federal court ruled these practices violated the Affordable Care Act's mandates. Despite this victory, the landscape remains fraught with ambiguity, largely due to the federal government's tepid response. The government’s retraction of its appeal in 2022, while upholding the court's decision, did not establish a nationwide prohibition on co-pay accumulators, leaving insurers in a legal gray area.

The HIV+Hepatitis Policy Institute has spotlighted the risk posed by the federal government's refusal to enforce the court's ruling against co-pay accumulators, shifting focus instead to addressing insurers' classification of certain drugs as “non-essential health benefits.” While the final 2025 Notice of Benefits and Payment Parameters rule curbs the classification of covered drugs beyond state benchmarks as non-essential, the government's inaction on co-pay accumulators marks a troubling disconnect between legal victories and their practical implementation.

This gap between legal wins and real-world application emphasizes the need for interventions at the state level. Louisiana's SB 210 emerges as a key measure, proposing tangible solutions to bridge the gap left by federal inaction and protect patients from the financial burdens imposed by insurers' exploitative tactics.

State Solutions: Louisiana as a Model

Louisiana's Legislative Response with SB 210

In an assertive move to safeguard healthcare affordability and accessibility, Senator Bob Owen's SB 210 targets the mechanisms of co-pay accumulators and the Essential Health Benefits (EHB) loophole. The legislation mandates comprehensive coverage under EHBs and holistic accumulator protections, ensuring all cost-sharing payments contribute towards the ACA's out-of-pocket maximums.

This legislative approach not only challenges the status quo but also highlights Louisiana's proactive stance in addressing healthcare disparities. By mandating that insurers recognize all federally designated EHB services and medications as essential, SB 210 directly confronts insurers' manipulative practices, ensuring patients receive the comprehensive coverage promised under the ACA.

Addressing the ‘Endless Deductible’

In a letter to the Louisiana State Senate Insurance Committee, CANN President and CEO Jen Laws warns that without robust protections like SB 210, insurers can impose what patients call "the endless deductible." This term illustrates the loophole that allows insurers to employ exploitative accounting practices, negating the ACA's intent to cap patient spending on healthcare. SB 210's provisions aim to close this loophole, ensuring patients are not burdened with exorbitant costs for essential treatments, thus preserving the ACA's core promise of affordable care.

In his letter, Laws reveals that Louisiana's health plan benchmarks do not guarantee coverage for essential cancer treatments such as radiation or chemotherapy, underlining the significance of SB 210. By ensuring that expenditures for such critical treatments are counted towards patients' out-of-pocket maximums, the bill offers a lifeline to those facing the daunting financial implications of treating life-threatening conditions. This measure is pivotal in bridging the gap left by the current healthcare system's shortcomings, providing patients with much-needed financial relief and access to life-saving treatments.

A Blueprint for National Reform

Louisiana's initiative serves as a compelling model for tackling the challenges posed by ambiguous EHB classifications, federal inaction, and exploitative co-pay practices. SB 210's success could inspire a wave of legislative efforts across the United States, advocating for a healthcare system that prioritizes patient well-being over payor profits. This approach highlights the potential for state-level innovations to influence national healthcare policy, paving the way for reforms that ensure healthcare accessibility and affordability for all, especially those living with chronic and life-threatening conditions.

Call to Action

The legislative changes proposed in Louisiana represent a critical juncture in the fight for healthcare affordability and access. To realize the full potential of these reforms, a concerted effort is needed from key stakeholders across the healthcare ecosystem:

For U.S. Policymakers:

Legislators at both state and federal levels must embrace proactive strategies to close the EHB loophole and regulate co-pay accumulator and maximizer use. Crafting and enacting policies that guarantee comprehensive coverage of essential health benefits and ensure all forms of patient assistance contribute towards out-of-pocket maximums are essential steps toward protecting patients from undue financial strain. Supporting state-level initiatives like Louisiana's SB 210 can serve as a foundation for broader national reforms, underscoring the importance of legislative action in safeguarding patient interests.

Healthcare Providers:

Medical professionals and healthcare institutions play a crucial role in advocating for their patients' rights and navigating the evolving insurance landscape. By staying informed about the implications of insurance policies on treatment access and affordability, healthcare providers can better support their patients in accessing the care they need. Engaging in policy discussions and supporting legislative efforts to address the EHB loophole and co-pay accumulator issue are necessary contributions to the broader push for healthcare reform.

Community Advocates and Patients:

The voices of patient advocacy groups and people affected by the healthcare system's complexities are instrumental in driving change. By raising awareness about the challenges posed by the EHB loophole and co-pay accumulators, mobilizing communities to demand reform, and sharing personal stories, advocates can influence policy decisions and encourage insurers to prioritize patient needs. Engaging in public discussions and advocating for policies that protect patients from harmful insurance practices are critical steps in building a more equitable healthcare system.

Actionable Next Steps:

• Reach out to state and federal representatives to express support for policies that ensure comprehensive coverage of essential health benefits and address the challenges posed by co-pay accumulators.

• Educate oneself and others about the impact of the EHB loophole and co-pay accumulators on healthcare affordability and access, leveraging resources and information provided by reputable patient advocacy organizations.

By uniting in the pursuit of meaningful healthcare reform, stakeholders across the spectrum can contribute to a future where healthcare accessibility and affordability are realities for all, especially for those facing chronic and life-threatening conditions. The journey toward closing the EHB loophole and eliminating unfair insurance practices demands collective action and unwavering commitment to patient well-being. Let's join forces to advocate for a healthcare system that truly serves the needs of its patients, ensuring equitable access to essential treatments and protections against financial hardship.

Dire Consequences of the Change Healthcare Cyberattack

On February 21, 2024, the healthcare sector faced a seismic disruption when Change Healthcare, a cornerstone in the healthcare data exchange ecosystem, fell victim to a sophisticated cyberattack. Orchestrated by the notorious ransomware group known as ALPHV/Blackcat, this attack not only compromised the integrity of Change Healthcare's systems but also sent shockwaves across the entire healthcare landscape, affecting providers, insurers, and patients alike. Change Healthcare, now part of Optum under the umbrella of UnitedHealth Group thanks to a controversial $13 billon dollar acquisition, plays a central role in processing medical claims, verifying insurance eligibility, and facilitating electronic prescriptions for as many as half of all claims processed in the U.S. The immediate fallout from this cyberattack has spotlighted the fragility of our interconnected healthcare infrastructure and raised urgent questions about cybersecurity, patient care continuity, and the broader implications of healthcare consolidation.

As of March 6, 2024, the situation surrounding the Change Healthcare cyberattack remains critical. UnitedHealth Group has made strides in implementing workarounds and temporary solutions to restore some level of functionality to pharmacy, claims, and payment systems. While progress in providing temporary solutions is a positive development, the absence of a definitive timetable for fully restoring all affected services continues to pose significant challenges for providers, independent pharmacies, and patients alike. The financial strain on these entities persists, compounded by UnitedHealth Group's continued collection of patient premiums amidst the outage. With UnitedHealth Group's net worth standing at $433,790,000,000, the contrast between the corporation's financial standing and the ongoing struggles within the healthcare sector is stark, underscoring the urgent need for a comprehensive resolution to this unprecedented crisis.

Direct Impact on Patient Access and Care

The cyberattack on Change Healthcare has not only disrupted the healthcare data exchange ecosystem but has also led to significant patient distress and financial uncertainty. This crisis has been further compounded by the emergence of potential litigation from patients left to grapple with whether insurance will cover their treatments or medications. Patients, regardless of their plan type, are finding themselves at a heightened risk of incurring unexpected bills, exacerbating the already dire situation.

Take, for instance, the experience of Mara Furlich. Battling escalating Covid-19 symptoms and unable to get her claim processed due to the cyberattack, Furlich was forced to pay $1,600 out of pocket for Paxlovid. Similarly, one of the Community Access National Network’s (CANN) very own board members was confronted with a balance bill of over $2,000 from CVS Specialty Pharmacy for HIV medication when their Patient Assistance Program benefits were unable to be processed, illustrating the financial and access barriers erected by the cyberattack. This scenario, emblematic of the difficulties in processing Patient Assistance Programs (PAPs), underscores the significant disruptions to medication access, especially critical for managing chronic conditions.

Jen Laws, President & CEO of CANN, articulates the broader ramifications for people living with HIV (PLWH). "We've been in contact with our partners, including funders, to raise the concern around maintaining continuous access to care for PLWH, regardless of their payor," Jen states. "The reality is patients need to be aware their pharmacies, providers, and labs may be struggling to communicate and deliver timely service because of the sheer breadth of Change's reach."

This incident, alongside the litigation threats reported by Axios, underscores the acute disruptions to medication access and the financial jeopardy faced by patients. Kathy Oubre, CEO of Pontchartrain Cancer Center in Louisiana, shares similar concerns, noting the center has had to dispense drugs at risk due to the benefits verification process being down, leaving providers and patients "flying blind."

These developments signal a critical juncture in the healthcare sector's response to the cyberattack, highlighting the urgent need for systemic solutions to restore patient access to care and address the financial uncertainties exacerbated by this crisis.

The Role and Response of UnitedHealth Group

UnitedHealth Group found itself at the heart of this crisis. The conglomerate's response has been a blend of damage control and strategic measures aimed at mitigating the fallout. UnitedHealth Group's acknowledgment of the cyberattack was swift, with public assurances of their commitment to rectify the situation and restore full services. Part of their response has been the launch of a temporary financial assistance program, as outlined on UnitedHealth Group's website. This program, offering interest-free loans to affected healthcare providers, has been promoted as a means to ease the financial burden wrought by the cyberattack, facilitating the recovery of disrupted cash flows and delayed payments.

Yet, this initiative has not been universally welcomed. Criticism from the American Hospital Association (AHA) and other healthcare stakeholders has been vocal, with many decrying the financial assistance terms as burdensome, highlighting the disconnect between UnitedHealth's proposed solutions and the actual needs of the healthcare providers struggling in the cyberattack's aftermath.

The plight of Dr. Christine Meyer's primary care practice in Exton, PA, as reported by The New York Times, exemplifies the dire straits many healthcare providers find themselves in due to the cyberattack on Change Healthcare. Dr. Meyer's account of resorting to mailing "hundreds and hundreds" of pages of Medicare claims highlights the drastic measures providers are forced to take to navigate the bureaucratic maze in the absence of functional digital systems. The stark reality of having to consider cuts to essential services, like vaccine supplies, to conserve cash underscores the severity of the situation. Through Optum’s temporary funding assistance program, Dr. Meyer said she received a loan of $4,000, compared with the roughly half-million dollars she typically submits through Change. “That is less than 1 percent of my monthly claims and, adding insult to injury, the notice came with this big red font that said, you have to pay all of this back when this is resolved,” Dr. Meyer said. “It is all a joke.”

Moreover, UnitedHealth Group's continued collection of patient premiums amidst this turmoil has sparked further controversy, raising ethical questions about corporate responsibility versus profitability during a healthcare crisis. UnitedHealth Group's role in this crisis and its response to the cyberattack highlight the complex interplay between healthcare infrastructure, corporate governance, and patient care. As the healthcare sector navigates the aftermath of the cyberattack, the actions taken by UnitedHealth Group will likely continue to be a focal point for analysis and discussion, underscoring the need for robust, patient-centered solutions in the face of unprecedented challenges.

ADAPs and PAPs: Navigating the Cyberattack Crisis

The cyberattack has exposed the vulnerabilities of essential healthcare support systems, notably AIDS Drug Assistance Programs (ADAPs) and Patient Assistance Programs (PAPs). These programs, a critical safety net for providing vulnerable populations with access to necessary medications, have faced significant challenges in maintaining their operations amidst the cyberattack's disruptions.

In response, NASTAD issued guidance to ADAP administrators in an email, indicating that, due to delays in prescription fills caused by the outage, programs might need to temporarily cover medication costs directly, later seeking reimbursement from pharmacies. This measure, while ensuring that ADAP remains the 'payer of last resort,' highlights the operational and financial complexities these programs are navigating to keep access to care uninterrupted.

The repercussions of the cyberattack go beyond operational disruptions, threatening the very fabric of the healthcare safety net. The interim 'full pay' solution underscores the delicate balance between ensuring immediate access to medications and the long-term sustainability of these programs.

Amidst this crisis, the collective action of healthcare stakeholders is imperative. The NASTAD memo not only outlines immediate actions for ADAP administrators but also calls for widespread support to uphold these critical programs, encouraging ready communication to case managers and patients regarding the situation, status updates, and navigating alternative access to care as needed. As the sector continues to address the fallout from the cyberattack, the adaptability and resilience of ADAPs and PAPs are paramount in ensuring continuous care for those who depend on them most.

Reassessing Healthcare's "Too Big to Fail" Doctrine

This unprecedented disruption of critical services has exposed serious vulnerabilities associated with the healthcare sector's consolidation, particularly following UnitedHealth Group's acquisition of Change Healthcare. This event has reignited the debate over the "too big to fail" concept within healthcare, a concern that the Federal Trade Commission (FTC) had previously filed suit over due to potential risks of market dominance and a centralized point of failure.

The FTC's apprehensions about the merger highlighted fears of creating an overly centralized healthcare data exchange ecosystem, susceptible to significant disruptions from single points of failure. These theoretical concerns have been realized in the wake of the cyberattack, illustrating the tangible systemic risks of such consolidation. The incident underscores the precarious balance between efficiency gains through consolidation and the increased risk of widespread service disruptions. It should also seriously call into question prioritizing corporate profits and shareholder value over patient care and access.

The U.S. Department of Justice's recent launch of an antitrust investigation into UnitedHealth Group, as reported by The Wall Street Journal, adds a new layer to the ongoing debate. This investigation, focusing on UnitedHealth's expansive reach across the healthcare sector and its potential effects on competition and consumer choice, signals a critical moment in the U.S. government's efforts to address monopolistic consolidation practices within the healthcare industry.

Furthermore, the disproportionate impact on smaller entities, such as independent pharmacies and patient assistance programs, underlines the broader implications of healthcare consolidation. These challenges highlight the need for a healthcare infrastructure that values diversity and decentralization, fostering resilience against such cyber threats.

In light of the antitrust investigation and the fallout from the cyberattack, there's a pressing need for a comprehensive reassessment of healthcare consolidation trends. Strategic regulatory oversight, significant investments in cybersecurity, and comprehensive contingency planning are essential to mitigate the "too big to fail" risks. The healthcare system's integrity, resilience, and commitment to patient care in an increasingly digital age demand a vigilant approach to ensuring that consolidation does not compromise the sector's ability to serve the public effectively.

Call for Policy Intervention and Sector-wide Reforms

The cyberattack on Change Healthcare has catalyzed a unified call for urgent policy interventions and comprehensive sector-wide reforms from leading healthcare organizations, including the American Hospital Association (AHA) and the Medical Group Management Association (MGMA). These calls to action emphasize the critical need to fortify cybersecurity defenses, guarantee equitable patient access to care, and critically evaluate the prevailing trends of healthcare consolidation that have left the sector vulnerable.

The AHA has been at the forefront, advocating for robust support to help healthcare providers weather the storm caused by the cyberattack. Their public statement underscores the profound operational and financial challenges healthcare providers are facing, urging for greater flexibility from payers and governmental intervention to alleviate the crisis's immediate impacts.

Echoing this sentiment, the MGMA has highlighted the dire circumstances medical groups are navigating, as detailed in their communication to HHS Secretary Xavier Becerra. The association's plea for comprehensive support from the Department of Health and Human Services (HHS) reflects the broader necessity for guidance, financial aid, and regulatory leniency to ensure the sustainability of medical practices during these turbulent times.

Both organizations also spotlight the broader issue of healthcare consolidation, critiquing the increased centralization of healthcare services as a significant factor exacerbating the cyberattack's impact. This consolidation not only poses heightened cybersecurity risks but also threatens the diversity and resilience of the healthcare ecosystem. In response, there's a pressing demand for policy reforms that address both the immediate cybersecurity vulnerabilities and the long-term implications of healthcare consolidation, aiming to cultivate a more robust, diverse, and equitable healthcare system.

Urgent Calls to Action:

1. UnitedHealth Group must significantly expand its financial assistance program to offer real relief to the affected healthcare providers, pharmacies, and patients, ensuring the aid is substantial and derived from its vast resources, not at the expense of American taxpayers.

2. Regulatory bodies, including the FTC, must critically assess healthcare consolidation's impact, implementing measures to mitigate the risks of such centralization and prevent future vulnerabilities.

3. A united front of healthcare providers, associations, and advocacy groups is essential to demand accountability and transparency from UnitedHealth Group and similar entities, ensuring commitments to cybersecurity and continuity of care are upheld.

4. Legislators and policymakers are called upon to enact stringent cybersecurity regulations for the healthcare sector, emphasizing the need for comprehensive security protocols, consistent audits, and effective contingency planning.

5. A broader dialogue on healthcare consolidation's future is necessary, advocating for a healthcare model that prioritizes patient welfare, system resilience, and equitable access above corporate profitability.

In the wake of the Change Healthcare cyberattack, the path forward requires not just immediate remedial actions but also a deep, systemic reevaluation of the healthcare sector's structure and policies. It's time for decisive action and meaningful reform to ensure a secure, resilient healthcare system that serves the needs of all patients, safeguarding against future crises and fostering a healthcare environment where patient care is paramount.

Transgender Community's Fight Against Systemic Discrimination

Transgender people grapple with profound healthcare barriers, intensified by systemic discrimination including a recent surge in legislative actions aimed at curtailing their rights. The National Center for Transgender Equality's (NCTE) 2022 U.S. Trans Survey (USTS) - the largest of its kind - highlights these impediments, demonstrating how discrimination not only obstructs access to general healthcare but also critically undermines HIV prevention and treatment efforts. This situation is compounded by healthcare providers' lack of familiarity with transgender health issues and the absence of supportive policies, exacerbating health disparities among transgender people. In the face of an unprecedented wave of anti-trans legislation in the last several years, the imperative for swift, decisive action to safeguard equitable healthcare access has never been more urgent.

Navigating the Healthcare Landscape for Transgender Communities

The 2022 USTS Early Insights Report underscores the significant healthcare barriers transgender folks face, characterized by systemic discrimination and economic challenges. This comprehensive survey, gathering insights from over 92,000 respondents, sheds light on the challenges confronting both binary and nonbinary transgender people.

Challenges in Healthcare Access and Provider Education

A notable 42% of USTS respondents have found themselves in the position of educating their healthcare providers about transgender care, underscoring a critical gap in medical education. This necessity not only burdens transgender people but also reflects wider issues of healthcare accessibility and inclusivity. Additionally, prohibitive costs deter 25% of the community from seeking necessary medical care, highlighting the financial barriers obstructing access to essential services.

The pervasive lack of provider education on transgender health issues is further critiqued in an American Medical Association’s Journal of Ethics article, emphasizing the negative impact of this educational deficiency on care quality and accessibility. Addressing this gap is essential for creating a healthcare environment that respects and adequately serves transgender people.

Socioeconomic Impact on Healthcare Access

Economic instability exacerbates healthcare disparities for transgender communities. The USTS reveals that 34% of respondents live in poverty, and 18% are unemployed, significantly diverging from national averages. This financial precarity, compounded by a 30% homelessness rate among respondents which is associated with experiences of housing and employment discrimination as well as experiences of domestic or intimate partner violence, severely limits healthcare access.

Insurance coverage disparities are stark, with 15% of transgender respondents uninsured, nearly triple the rate of the general U.S. population. Additionally, 29% experienced insurance lapses in the year before the survey, jeopardizing access to critical healthcare services, including HIV prevention and treatment.

A Center for American Progress report further highlights the economic barriers that disproportionately affect transgender people's healthcare access, emphasizing the need for policy interventions to mitigate these disparities.

The Toll of Harassment and Violence

Harassment and violence are prevalent issues within transgender communities, with 30% reporting verbal harassment and 39% facing online harassment due to their gender identity over the past year. This hostile environment not only impacts mental and physical health but also deters many from accessing healthcare services for fear of discrimination.

Centers for Disease Control and Prevention (CDC) research reveals that nearly 70% of transgender women experience discrimination, particularly in employment, directly affecting healthcare access and utilization. This discrimination creates significant barriers to health insurance, medical care due to cost, and access to transgender-specific and gender-affirming procedures.

The mental health crisis among transgender people, defined by discrimination, violence, and systemic barriers, is highlighted in a Washington Post feature on transgender healthcare. Nearly half of transgender adults report encountering healthcare providers lacking knowledge in transgender care, contributing to a crisis of depression, anxiety, and suicidal ideation. Addressing this crisis requires systemic changes in healthcare delivery and education to ensure comprehensive healthcare services are inclusive, accessible, and culturally competent.

Addressing Discrimination's Impact on HIV Risk in Transgender Communities

Discrimination against transgender people is a profound social injustice, critically escalating HIV risk. The CDC's report on the Prevalence of Discrimination reveals that nearly 70% of transgender women face discrimination that acutely affects employment, housing, and access to healthcare opportunities. These obstacles represent an incredible public health challenge, directly undermining efforts to combat HIV.

Discrimination leads to a marked hesitancy among transgender people to seek healthcare, including essential HIV testing and treatment. This hesitancy is intensified by a lack of culturally competent healthcare providers who understand the specific health needs of transgender people. The CDC highlights the critical role of HIV testing as the cornerstone of treatment and prevention, pointing out a significant diagnostic gap among transgender women living with HIV. This underscores the pressing need for healthcare environments that are both accessible and affirming.

Transgender women, especially those of color, face a myriad of societal challenges that increase their risk of HIV. The CDC's report on Syndemics outlines how factors like condomless anal intercourse, homelessness, incarceration, and substance use, compounded by discrimination, heighten this risk. A comprehensive approach that includes social support, housing stability, and anti-discrimination initiatives is essential to address these interconnected challenges. Despite the critical role of social support, the CDC also notes the limitations of support networks in mitigating the HIV risk associated with violence and harassment. This calls for a broader, systemic strategy to address the root causes of discrimination and violence against transgender people.

In addressing HIV risk, it's crucial to recognize the specific challenges faced by transgender men, highlighting the need for prevention strategies tailored to their experiences. Misunderstandings about the HIV risk for transgender men, particularly those engaging in sexual activities with cisgender men, overlook the reality that a segment of this community is involved in behaviors that increase their HIV and STI exposure. This issue is exacerbated by the insufficient HIV prevention resources tailored to transmen and their underrepresentation in health research. The dynamics of power within their sexual relationships can complicate safe sex practices. Factors like the heightened libido from testosterone therapy may lead to riskier sexual choices, further influenced by societal discrimination. Effective interventions must therefore embrace inclusive healthcare and societal support, promoting environments where transgender men can confidently express their sexuality while ensuring their health and well-being.

PrEP and Hormone Therapy: Navigating Concerns

Pre-exposure prophylaxis (PrEP) is a key strategy in preventing HIV among transgender people at risk. Despite its proven effectiveness, the adoption of PrEP by transgender women is disproportionately low, impeded by systemic obstacles and concerns about interactions with hormone therapy. The CDC has confirmed that there are no adverse interactions between PrEP medications and feminizing hormones, emphasizing the need to debunk myths and promote PrEP as a cornerstone of HIV prevention.

Echoing these concerns, a MedPage Today article delves into how homelessness, employment discrimination, and violence not only compound the HIV risk but also significantly obstruct access to crucial prevention tools like PrEP. Despite widespread awareness, the translation into action—PrEP uptake—remains alarmingly low among transgender women, spotlighting the chasm between knowledge and accessible, actionable health interventions, widened by entrenched systemic inequalities.

Navigating Legislative Barriers and Societal Challenges

The need for legislative action and provider education to improve healthcare accessibility are illustrated in the story of Robert Eads, a tragic example of the dire consequences of healthcare related discrimination. Eads, a transgender man from Georgia, encountered significant barriers to receiving treatment for ovarian cancer, with numerous doctors refusing care due to his gender identity and ultimately leading to his death. His experience underscores the critical need for healthcare systems that are accessible and inclusive, ensuring that transgender people receive the care they need without discrimination.

Unfortunately, the landscape of transgender rights and healthcare access in the United States is moving in the opposite direction thanks to a surge in anti-trans legislation, marking a concerning trend toward restricting the freedoms and healthcare access of transgender folks. A 2024 report from USA Today highlights this alarming escalation, noting that as of February 14th 130 bills targeting transgender rights had been filed nationwide. This legislative push not only seeks to limit access to gender-affirming care but also poses a broader threat to the visibility and rights of transgender people in public life.

The American College of Physicians (ACP) has voiced concern over the growing number of states implementing bans on gender-affirming healthcare. Following Arkansas's 2021 ban on such care for transgender minors, at least 12 other states have enacted similar restrictions, contributing to a hostile legislative environment that has put over 146,300 transgender youth and young adults at risk of being denied access to vital medical care known to mitigate risks of depression and suicide.

The burgeoning wave of anti-trans legislation casts a long shadow over the lives of transgender people, creating an atmosphere rife with fear and exclusion. The narrative shared by Ashley Andreou in Scientific American brings to light the chilling effect these laws have on both the mental and physical well-being of transgender people and the medical professionals dedicated to their care. Andreou's personal connection to the issue, through the loss of a family member to the mental trauma of transgender discrimination, underscores the profound human cost of these legislative actions. The laws, fueled by deliberate misinformation and detached from evidence-based medical practice, not only threaten the rights and dignity of transgender people but also jeopardize the very essence of patient-centered care.

Critically, the most recent wave of anti-trans legislation specifically targets access to care and even weaponizes accessing care for transgender patients, in and of itself. With some states adopting laws or administrative policies to pursue the medical records of transgender patients, even outside of those particular states, and the refusal of those medical institutions to protect patient privacy at the risk of facing state-sponsored legal challenges.

In the face of such legislative adversity, the call for advocacy and legal resistance becomes ever more critical. The experiences detailed by Andreou, from the criminalization of physicians providing gender-affirming care to the forced closure of clinics like Texas's GENECIS, highlight the urgent need for policies that protect the healthcare rights of transgender people. This legislative hostility not only undermines the autonomy of transgender people but also places an undue burden on healthcare providers, stifling their ability to offer essential care.

Empowering Transgender Health: Education, Advocacy, and Policy Reform

Equitable healthcare for transgender communities hinges on a unified strategy encompassing education, advocacy, and public policy. At the core of this strategy are the CDC's Transforming Health guidelines, which equip healthcare providers with a framework for delivering care that respects the unique needs of transgender people. These guidelines underscore the necessity of a well-informed healthcare team to create an environment that is affirming and respectful for all patients.

The Biden Administration's initiative to fund sex education for trans boys marks a critical step in addressing the educational gaps in sexual health for transgender and non-binary youth. This move fills a crucial need and sets a precedent for future policies aimed at improving health outcomes for transgender youth. It also specifically speaks to a significant gap in even existing outreach to transgender people. Transgender women are over-represented in many studies and programming due to the heightened violence this community faces. Transgender men on the other hand have often been left behind in programming and research - the Biden Administration’s move is unique in its effort to meet the needs of young transgender men.

However, the potential for a rollback of protections under administrations like the previous one's underscores the fragile nature of transgender rights. The ease with which previous gains can be reversed highlights the need for continuous advocacy and vigilance. Advocates must remain prepared to counter any attempts to diminish protections for transgender people, employing a combination of legal, policy, and grassroots strategies to safeguard the rights and health of transgender communities.

Amid systemic barriers and discrimination, advocacy is crucial in securing the rights of transgender people to access gender-affirming care and protection from healthcare discrimination. Key actions include:

• Strengthen Legal and Policy Advocacy: Monitoring policy changes affecting transgender rights, challenging discriminatory policies through legal avenues, and collaborating with policymakers to advocate for inclusive laws.

• Enhance Public Education and Awareness: Leveraging research and reports to educate the public, healthcare providers, and policymakers about the challenges faced by transgender people.

• Mobilize Community and Allies: Organizing community support and direct actions to advocate for inclusive policies at institutional and governmental levels.

• Invest in Research and Documentation: Continuing to document health disparities and experiences of discrimination to support advocacy and policy reform.

• Pursue Strategic Litigation: Using the courts to challenge discriminatory practices and secure legal protections for transgender people. This would be particularly notable if initiated or otherwise supported by executive agencies of the federal government.

Achieving healthcare equity for transgender communities demands:

• Comprehensive training on transgender health issues for healthcare providers to ensure empathetic, respectful care.

• Advocacy for inclusive policies that protect transgender people from discrimination in healthcare institutions.

• Support for gender-affirming care to be included in health insurance coverage and made accessible for all transgender people.

• Development and funding of mental health services tailored to the needs of transgender communities.

• Building supportive community environments that empower transgender people and provide essential resources for their well-being.

By adopting these strategies, we move closer to a future where healthcare equity for transgender people is a reality, reflecting a commitment to human rights and dignity. We can create a healthcare system that recognizes and meets the needs of every person, regardless of gender identity, and moves us closer to Ending the HIV Epidemic with comprehensive and collaborative efforts between allies.

The Growing Burden of Medical Debt for Insured Americans

Health insurance, designed as a financial safeguard against illness and chronic conditions, presents a paradox in America: many insured individuals are burdened by substantial medical debt. This contradiction highlights systemic flaws in our healthcare system, where high out-of-pocket costs, aggressive debt collection by hospitals, and policy gaps create a crisis impacting financial stability, equitable healthcare access, economic mobility, and both financial and health disparities.

The Rising Tide of Medical Debt Among the Insured

Penelope Wingard's experience, a 58-year-old black woman from Charlotte, North Carolina, starkly illustrates the human cost of medical debt for the insured. After her breast cancer treatment in 2014, she faced a new challenge: escalating medical bills. Despite Medicaid coverage during treatment, she found herself uninsured and overwhelmed by costs for follow-up care. "My hair hadn’t even grown back from chemo, and I couldn’t see my oncologist," she recalls, underscoring the immediate financial burden of her illness.

Her financial woes deepened with subsequent medical issues, including an aneurysm and vision problems, leading to tens of thousands of dollars in debt. "It’s like you’re being punished for being sick," Wingard's experience reflects a broader trend affecting many insured Americans - not just the uninsured.

This trend is echoed in recent reporting by The Guardian, showing most hospital debt in the U.S. now involves insured patients, rather than uninsured patients, often due to high deductibles and unexpected out-of-pocket costs. The Kaiser Family Foundation’s 2023 Employer Health Benefits Survey further highlights it, noting a rise in high-deductible health plans, which, despite lower premiums, can lead to significant financial strain during medical emergencies. This change also represents employers selecting benefit designs that shift costs to employees or, more directly, a lower overall value of compensation packages.

Wingard's ordeal and these findings paint a concerning picture of U.S. healthcare, where insurance all too frequently fails to provide adequate financial protection, underscoring the need for a critical reevaluation of insurance structures and policies.

The Role of Hospitals and Aggressive Collection Practices

The medical debt crisis in the U.S. is worsened by many hospital systems, particularly so-called nonprofit hospitals, adopting aggressive debt collection tactics. A Nonprofit Quarterly article highlights that these hospitals, despite tax exemptions, often pursue lawsuits, wage garnishments, and home liens, exacerbating patients' financial woes.

The Human Rights Watch report, "In Sheep’s Clothing," reveals that about 60% of U.S. community hospitals are tax-exempt nonprofits, yet they spend significantly less on charity care than they receive in tax benefits, raising questions about their commitment to community service.

Additionally, the decline in charity care, vital for both uninsured and insured patients facing high out-of-pocket costs, is alarming. Hospitals' aggressive pursuit of unpaid bills, including legal actions and debt sales, seemingly contradicts their community-serving role and intensifies the medical debt crisis.

In response, legislative measures like New York State's Fair Medical Debt Reporting Act are emerging. This law, preventing hospitals from reporting unpaid medical debts to credit agencies, marks progress towards protecting patients and signals a shift towards more ethical debt management practices in healthcare.

Policy Gaps and the Need for Reform

The Affordable Care Act (ACA) and Medicaid Expansion stand as monumental efforts to increase coverage. Yet, the persistence of medical debt among the insured underscores a critical disconnect between policy intentions and real-world outcomes.

The ACA and Medicaid Expansion: Coverage vs. Cost

While the ACA and Medicaid Expansion have expanded healthcare access, they often fail to protect individuals from medical debt due to rising out-of-pocket costs. The Peterson-KFF Health System Tracker Brief indicates that the ACA’s maximum out-of-pocket limit is increasing faster than wages, burdening insured individuals with escalating healthcare expenses.

High-deductible health plans (HDHPs) exacerbate this affordability crisis. These plans, with lower premiums but higher initial costs, are increasingly common. The Kaiser Family Foundation’s 2023 Employer Health Benefits Survey shows a rise in HDHP enrollment, leading to significant debt for families as they pay more out-of-pocket before insurance coverage starts.

Coverage limitations under the ACA also contribute to this issue. Essential health benefits vary by state and plan, often leaving gaps in coverage for critical services like mental health or certain prescriptions. This variability, coupled with high deductibles, results in insured individuals facing substantial medical debt, contradicting the purpose of insurance.

Addressing this requires reevaluating health insurance structures and regulatory frameworks to balance affordable premiums with comprehensive, consistent coverage, reducing the risk of overwhelming medical debt for insured individuals.

Commonwealth Fund's 2023 Health Care Affordability Survey: Key Insights

The Commonwealth Fund's 2023 Health Care Affordability Survey reveals more than statistics; it highlights the real struggles of Americans with healthcare costs. The survey underscores the healthcare affordability crisis, showing that insurance doesn't always shield from financial burdens.

A major finding is the impact of high deductibles and copayments, which consume a significant part of many people's incomes, forcing tough choices like delaying medical care or incurring debt. Particularly affected are lower-income families, those with chronic conditions, and older adults, who often face a cycle of debt and deferred care, worsening health disparities.

The survey also points to a trend of underinsurance, especially in employer-sponsored plans with high deductibles, leaving many at financial risk. These insights call for urgent policy reforms to make healthcare truly affordable, focusing on reducing out-of-pocket costs, restructuring insurance plans, and enhancing subsidies for those in need.

State-Level Initiatives: Pioneering Change

States are at the forefront of combating medical debt with innovative solutions. The Commonwealth Fund State Protections report highlights diverse strategies to mitigate medical debt's impact.

Key initiatives include laws to limit aggressive hospital debt collection practices, crucial for protecting vulnerable groups like low-income families and those with chronic conditions. Some states have set legal boundaries on pursuing unpaid medical bills and capped interest rates on medical debt.

Expanding eligibility for charity care and financial assistance is another significant move. This broadening ensures more people, particularly those with limited resources, can access medical care without the fear of crippling debt, thereby improving community health outcomes.

States are also focusing on enhancing transparency in medical billing and insurance coverage, ensuring patients have clear information about service costs and their financial obligations. This clarity is essential for informed healthcare decisions and avoiding unexpected bills.

Furthermore, states are strengthening consumer protection laws to defend against unfair medical billing practices, holding providers and insurers accountable for billing errors and offering patients better dispute resolution options.

These state-level actions, varying in scope but united in purpose, demonstrate encouraging progress toward a more equitable healthcare system. They address not only the symptoms of medical debt but also several of the root causes, paving the way for broader healthcare reforms. These initiatives, alongside federal efforts, are shaping a future where healthcare affordability is accessible to all, not a privilege for a few. State governments' role in this fight is pivotal, with their policies and programs serving as models for national reform and effective strategies to alleviate medical debt.

Federal Actions: A Unified Approach with Enhanced Consumer Protection

Federally, initiatives like the White House Convening on Medical Debt and the Consumer Financial Protection Bureau's (CFPB) plan are key in combating medical debt. These efforts merge federal oversight with state innovation, addressing medical debt's complexities.

The White House Convening united federal and state policymakers, healthcare experts, and advocates to strategize on reducing medical debt and improving healthcare policies. This meeting was pivotal for sharing insights and identifying best practices for nationwide implementation, recognizing medical debt as a multifaceted issue.

Additionally, the CFPB's plan, noted in a National Consumer Law Center (NCLC) announcement, marks a significant move towards consumer protection. It proposes prohibiting medical debts from being reported on credit reports, a major relief for those burdened by medical debt. This initiative is widely supported by consumer groups and reflects an understanding of the disproportionate impact of medical debt on financial stability.

The collaboration of federal agencies like the Department of Health and Human Services, the CFPB, and the Centers for Medicare & Medicaid Services is crucial in formulating effective healthcare policies. Their joint efforts are expected to lead to comprehensive strategies that significantly alleviate the burden of medical debt.

This federal approach, emphasizing interagency cooperation and stakeholder engagement, is helping to create policies and practices that effectively reduce medical debt, integrating federal oversight with state-level innovation and consumer protection measures like the CFPB's plan. This integrated strategy is essential for relieving American families of medical debt and advancing towards a more equitable healthcare system.

The Blind Spot: Medical Credit Cards

Despite the good intentions of these proposals, a “blind spot” persists and more and more hospital systems are taking advantage of it by pressuring patients to agree to take on “medical credit” debt, prior to providing services - even in emergency departments. The most popular of these programs is known as “Care Credit” and the American public assumed some $23 billion in medical credit card debt across- more than 11 million users from 2018 through 2020. Unlike traditional medical debt, these medical credit programs accrue interest and do not qualify for financial assistance or charity care. They result in as much if not more damage to patient-consumer credit reports as traditional medical debt.

Once primarily limited to dental costs, which are not a required covered benefit for adults, the company that owns Care Credit says it believes patients typically generate this debt through “elective procedures”. However, patients urged to accept credit based medical debt in an emergency room or when facing cancer care or even in seeking dental care for an infected tooth may not feel these procedures are “elective” and the financial institution is not necessarily going to operate with the same definitions the general public would. Indeed, it does not serve Synchony’s interests to do so. In fact, Synchrony partners with multiple provider associations and as of 2023 with at least 17 hospital systems or about 300 hospitals but, when interviewed, refused to provide details because those agreements likely include “sponsorships” or what would otherwise be called a kick back scheme. That scheme structure is very likely prohibited by federal law protecting patients of public health programs like Medicare from providers and their affiliates that would take advantage of needy or elderly patients.

Once assumed as a means of paying for medical care, medical credit card debt reports just like traditional credit card debt and patient-consumers are no longer protected from those specific protections policymakers are considering now.

Conclusion and Call to Action

It's evident that this crisis is not just financial but a moral and systemic failure. The experiences of individuals like Penelope Wingard and findings from the Commonwealth Fund's 2023 Health Care Affordability Survey underscore the need for compassionate healthcare reform.

Policymakers, healthcare providers, patient advocates, and citizens must unite to address this crisis's root causes and reshape our healthcare system.

For Policymakers:

• Implement policies that go beyond expanding coverage to ensure affordability and accessibility.

• Reassess high-deductible health plans and their impact on families.

• Mandate comprehensive coverage in health plans, including closing the essential benefits loophole and ensuring network parity for services like mental health and chronic disease management.

• Enforce regulations ensuring hospitals commit to community-serving mandates, particularly in providing sufficient levels of charity care to justify nonprofit status. This can be implemented on both the state and federal levels.

For Healthcare Providers and Institutions:

• Prioritize ethical patient care over financial gains.

• Establish transparent billing practices and expand charity care programs.

• Collaborate with community organizations to identify and support vulnerable patients.

• Train staff in empathy and patient advocacy, focusing on the human aspect of healthcare.

For Patient Advocates and Community Members:

• Support legislation that protects patients from aggressive debt collection and unfair billing.

• Educate communities about their rights and resources regarding medical debt.

• Partner with local health systems to develop patient-centered care models.

For All Stakeholders:

• Collaborate to create a healthcare system that balances efficiency with empathy, justice, and accessibility.

• Strive to make medical debt a rarity, ensuring healthcare access for all, regardless of insurance status.

• Remember the human element in healthcare.

We possess the knowledge and resources to drive change. Let's collectively push for policies that safeguard the vulnerable and work towards a healthcare system where access is a right, not a privilege. The time to act is now and it is past time that our state and federal policymakers evaluate their allegiance to hospitals systems abusing government programs, the dollars that support those programs, and the patients those dollars are meant to benefit.

CMS Sides with the Devil: Insurers’ Co-Pay Accumulators Remain…for Now

The Affordable Care Act (ACA) was revolutionary in how prescriptive statutory language was in ensuring health insurers (payers) covered costs associated with pre-existing conditions, if they accepted even a penny of federal funding. The trade off was a simple theory: “cover more people and their entire health and we’ll make sure you’re still profitable”. There were hundreds of pages of caveats, definitions, incentives for public programs, pharmaceutical research, and regulatory authority passed to state and federal agencies. Everyone got a piece of the pie to the end benefit of Americans for whom health care had been out of reach for the majority of their lives. We would be healthier together by simply providing people the care we need and reducing overall costs. However, as these things go, payers are creative and pay their lawyers handsomely to find ways around that basic agreement. As payers fight to “contain costs”, co-pay accumulator programs are one of the most disingenuous methods to limit consumer access to quality care and pad payers profit margins.

From issues of discriminatory plan design, or making consumers pay the highest cost-sharing for medications which are only used to treat certain conditions like HIV, to limiting provider networks in such a way that a patient requiring a surgery or emergency care results in surprise bills to toxic practices known as “utilization management” (including, but not limited to, abusive prior authorizations and step therapy, also known as “fail first”), payers have paid their lawyers quite well to find loopholes or design new problems in order to maintain their profits. The ACA’s medical loss ratio (MLR) rule, also known as 80-20/85-15 rule (in general requiring 80% or 85% of a plans premiums to actually be used on costs of care or pay back to balance to consumers) has resulted in a startling 2 billion dollars to be paid back to consumers in 2019 alone. But the rule doesn’t necessarily count other income payers can produce by way of cost-sharing or deductible payments, co-pays (a fixed price typically paid after deductibles are met for care and medications), and – now, more commonly – “co-insurance” (a percentage price typically paid after deductibles are met for care and medications) as part of that rule. The result is consumers and those who would like to see us get the quality, individualized care we need are being put on the hook for payers’ greed.

Patient advocacy often has interesting bedfellows. And at the intersection of our care interests and that of industry, pharmaceutical manufacturers have found what can arguably described as a somewhat socialist model by way of patient assistance programs, often enacted as co-pay card or discount programs aimed at directly benefiting patients by taking care of the patients’ share of a medication’s cost. These programs are quite frequently limited by income or if a person is insured. The idea being to make sure the most costly medications make their way into the hands of the people who need them most and can least afford them. In this, our interests as patients absolutely converge with that of manufacturers. We want quality therapies made available to us. However, when a medication “goes generic”, often these programs are no longer available as a less costly, generic medication is preferred by the payer unless a patient fails that particular medication (see: step therapy, “fail-first”). The problem is generic medications are not held to extraordinarily strict requirements for Food and Drug Administration (FDA) approval that brand name medications are held to. Indeed, earlier this year, Vice offered a fantastic explanation of the problem with preferencing generic medications by payers (both public and private) is harmful to patients and why our generics “approval” process is a threat to the health and safety of patients. It’s no wonder, with the lax oversight of generic medications and the offer of payment assistance from manufacturers that patients would want access brand name and newer medications on the market.

One of the most amazing benefits of patient assistance programs is, in theory, because they’re meant to cover the patient’s cost-sharing obligations, these out-of-pocket (OOP) costs should apply to the patient’s deductible and OOP maximums and reduce the cost burden to patients for future care throughout the plan year. Right?

Wrong.

Payers have near uniformly adopted a practice known as “accumulator adjustment programs”, or co-pay accumulators, in which a payer basically says to a patient and a manufacturer “all for me, none for thee”, taking the entirety of the benefit offered by a patient assistance program and not crediting the patient with those funds received against the patient’s deductible, co-pay or co-insurance, or out-of-pocket maximums. To boot, manufacturers have zero control over this practice and often don’t know when it’s happening until a patient complains about the experience. Payers justify this move as “cost-containment” and disincentivizing patients from seeking more costly medications – which translates to newer, more effective, safer medications (go back to the problem with generic approvals above).

So far, the Centers for Medicare and Medicaid Services (CMS), the primary authority in which payment rules are issued from the federal government to payers, have generally made extraordinary effort to ensure protect the interests of patients and those who align with our interest. In the instance of CMS’s newest rebate rule, CMS chose to side with payers for some inexplicable reason. The rule states pharmaceutical manufacturers, not payers, would have to count these direct-to-consumer assistance programs among “best price” calculations, which govern Medicaid rebate price setting or what the government pays for a medication, if a patient didn’t receive 100% of the benefit of the assistance program. Previous rules on what to consider in calculating “best price” were generally limited to prices negotiated within industry movers inside the supply chain, not that of end users. The theory goes like this: “if ultimately this assistance program is paying an insurer’s bottom line and not helping patients, then it should be considered a price you (manufacturers’) negotiated. You were planning for that in setting your prices anyways, right?” Pop quiz answer: wonky negotiations with payers is not what manufacturers were planning on in designing income limited, only-accessible-by-consumers-asking for-it assistance programs. The solution CMS offered was for manufacturers to ensure patients received the intended benefit by requiring patients to pay for a medication up front and then ask for reimbursement – a process that only makes medication access and affordability infinitely more complicated and burdensome for patients.

In the end, CMS decided that in response to an excessively abusive payer practice that disadvantages patients, the answer was to create further barriers to accessing care for patients rather than to reduce them.

Let’s make this real and “back of the envelope” this practice in terms of realized patient experiences:

Monthly Income: $2,583 (based on average US income in 2019 provided by the Census Bureau)
Monthly premium: $304 (lowest cost local silver deductible is $3,400, OOP maximum is $8550, co-insurance is 20-40%)

Absent a public payer intervention, co-pay accumulators might allow a patient assistance program to cover the estimated $600 per month co-insurance would demand for a certain medication, however, I’m not likely to meet my deductible or maximum OOP for the year at all. With local rent costing about $1000 per month, a car payment and car insurance in order to work (there’s no meaningful public transit in the vast majority of the country), food costs, utilities, etc. Even with federal subsidies provided via the health care market place, every month, I’m in the negative. Which means I can’t afford to see my doctor or get my quarterly labs, which means I can’t get my medication in the first place.

However, without the application of a co-pay accumulator, accessing just 3 month’s worth of a patient assistance program would meet my deductible and maximum OOP costs for the year. I don’t have to worry about at least $200 per month in medical costs. And one less financial strain is off my shoulders.

For the vast majority of us, our medications are not a luxury item. They’re not something we can afford to pay for up front and mail-in a rebate request and wait months for. In doing so, CMS not only suggests an increase to the paperwork burden on patients and manufacturers alike, CMS also seeks to increase barriers to accessing life saving medications to begin with.

All to the benefit (read: profit) of payers. So it’s no wonder the trade organizations, Pharmaceutical Research & Manufacturers of America (PhRMA) chose to initiate a lawsuit to halt the implementation of CMS’s backwards and punitive rule.

While patient advocates may spar readily about the role of industry among advocates, we should also recognize actions that align with our own interests on their face. Yes, PhRMA may be leading up this suit - and CMS should listen to the needs of patients, reverse course, and voluntarily pull this rule.