Added Benefits: Health Care Reform

After an often contentious political fight, the Affordable Care Act (ACA), often referred to as Obamacare, was signed into law on March 23, 2010. Regardless of how Americans in general may feel about healthcare reform, parts of the ACA are good news for people with cancer, according to Heidi Albright of the MD Anderson Cancer Center in Houston. “I think some people fundamentally don’t understand some of the hidden gems that are in the bill,” she says. Here’s a look at what it means for people with cancer.

Before the ACA, many private insurance policies set a lifetime limit (typically $1 million or $2 million) on how much health care a person or family could receive. The lifetime costs of cancer care could quickly hit such limits, but they are now history. Similarly, annual dollar limits on essential benefits, such as hospital stays, are now banned in all group plans and in new individual plans. The enormous cost of drugs is just one component of the total costs faced for cancer treatment. Eleven of 12 cancer drugs approved in 2012 cost more than $100,000 per year. In addition, the costs of drugs already on the market continue to skyrocket. For example, Gleevec (imatinib), a targeted therapy used to treat a variety of cancer types, was priced at about $30,000 a year when it was introduced in 2001. By 2012, its cost had more than tripled, to about $92,000 per year. With prices like these, lifetime limits have often been surpassed.

The ACA also addresses the Medicare prescription drug “doughnut hole,” the gap between the amount of prescription drug coverage initially provided and the amount at which catastrophic coverage begins. Before healthcare reform, older adults with Part D drug coverage who reached the doughnut hole had to pay 100 percent of prescription drug costs until they reached a certain out-of-pocket cost threshold. Under the ACA, once beneficiaries reach the doughnut hole, they automatically receive a 50 percent discount on covered brand name drugs and a 14 percent discount on covered generic drugs. The ACA calls for the doughnut hole to become progressively smaller every year until it is eliminated in 2020.

“We have heard from numerous people who have been denied coverage or been quoted outrageous rates because they have a history of cancer, and now those folks will be able to get coverage,” says Erin Reidy, a public policy expert who previously served as an associate director of the American Cancer Society Cancer Action Network. As of 2010, the ACA prohibits insurance companies from denying coverage to children under age 19 due to a pre-existing condition. This protection will be extended to everyone beginning in 2014. In addition, insurance companies will not be allowed to cancel insurance coverage because someone receives a cancer diagnosis.

Before the ACA, lack of access to care could prevent people with cancer from receiving a diagnosis in a timely manner, as well as the treatment they needed to produce the optimal outcome, Reidy explains. In addition, some insurance companies tried to identify technical errors on applications specifically to deny payment for services when patients got sick. The ACA law makes that illegal.

Because of the ACA, many young adults who previously did not have access to health insurance are now eligible to remain covered under their parents’ plans until age 26. Cancer death rates are increasing in young adults, according to Electra Paskett, of The Ohio State University Comprehensive Cancer Center in Columbus, Ohio. Scientists believe this increase may be due, in part, to delays in diagnosis and treatment because of a lack of insurance. Paskett is hopeful that better coverage for young adults will lower the cancer death rates in this age group.

We have heard from numerous people who have been denied coverage or been quoted outrageous rates because they have a history of cancer, and now those folks will be able to get coverage.

Albright says the future of cancer care is about preventing cancer and recurrence. “Our focus needs to be on our younger population, so that they don’t develop the disease in the first place,” she adds. In 2010, all new insurance plans were required to cover certain preventive and screening services, such as mammograms and colonoscopies, without charging a deductible, co-payment or co-insurance. One patient who benefits from that provision is Janell Richison, whose diagnosis of stage 1 colon cancer in 2011 meant the Newark, N.J., resident would have to undergo annual surveillance colonoscopies—procedures that her insurance now covers.

Beginning in 2014, there will be a minimum standard of care through a provision of the ACA called the essential health benefits. This is good for cancer patients, because, as Reidy explains, “We would see people who had health insurance coverage that would, for example, be denied coverage for chemotherapy, which is clearly far from adequate.”

The ACA includes many provisions to make insurance affordable. One big change is the creation of a Health Insurance Marketplace in each state, which offers a choice of health plans to people who are not insured through an employer. Enrollment began in October. (Visit HealthCare.gov for details.) Some people will qualify for a free or low-cost plan, or for a new type of income tax credit that can be applied immediately (rather than waiting for tax time). The tax credit, in an amount based on family size and expected income, will be sent directly to the insurance company and applied to the monthly premium.

The ACA contains another provision that will directly impact people with cancer: Insurance companies must cover routine costs associated with approved clinical trials. The requirement does not apply, however, to “grandfathered” health plans, that is, insurance coverage for individuals enrolled prior to the ACA’s enactment.

Although several aspects of the ACA may affect the cost of cancer care in the long run, some experts think the law did not go far enough in this regard. Albright notes that the ACA was intended to “bend the cost curve,” so she considers it unfortunate that the true costs of actual care delivery are never specifically addressed.

Hospital charges can quickly mount and vary wildly between hospitals—even within the same city. The Centers for Medicare & Medicaid Services recently released data on what different hospitals charge for many common services. Cancer center data were not included, so it’s difficult to compare costs. What hospitals charge uninsured patients, insurance companies and Medicare also varies widely, adding more difficulties for patients trying to conduct a cost analysis in preparation for treatment.

Moreover, the cost structure is complex, making it nearly impossible for patients to assess their liability for care costs in advance and forcing them to bear the brunt of insurance denials for services ordered by their doctors.

In an attempt to address healthcare costs, the ACA established a national pilot program of payment “bundling.” That means that hospitals, doctors and providers are paid a flat rate for an episode of care rather than according to the current system in which each service or test is billed separately. Another part of the ACA will tie physician payments to the quality of care they provide, starting in 2015. Physicians will see their payments modified so that those who provide higher-quality care will receive higher payments than those who provide lower-quality care.

While Richison has benefited from certain reforms in the ACA, she says more needs to be done in requiring insurance companies to provide coverage for cancer surveillance. In order to determine whether her cancer has returned, for example, she needs several regular tests in addition to annual colonoscopies.

“Last year, I had to pay close to $400 out-of-pocket for a CT scan,” she says. And, every six months, she pays about $45 for two blood tests. She thinks these additional tests should be classified in a way that ensures 100 percent insurance coverage. “The colonoscopy is only one factor in the surveillance of colon cancer,” she says. “It is the CT scan that will detect whether cancer cells lurking in one’s system have moved to other organs. The colonoscopy alone cannot detect this.”