In recent years, expensive specialty medicines used to treat cancer and chronic illnesses have forced some very ill Americans to choose between getting proper treatment and paying their rent.
To ease the financial burden, the California agency that governs the state's Obamacare plans issued landmark rules Thursday that will put a lid on the amount anyone enrolled in one of those plans can be charged each month for high-end medicine.
The agency says its rules, set to take effect in 2016, "strike a balance between ensuring Covered California consumers can afford the medication they need to treat chronic and life-threatening conditions while keeping premiums affordable for all."
Mikkel Lawrence, a retired teacher in California, is the kind of patient lawmakers keep in mind when they're designing such policies.
Sometimes Lawrence gets up in the morning, eats breakfast, and then heads straight back to bed for a nap. "I get really bad tired spells," he says. "It's like you have to go to sleep."
This is one of the symptoms of hepatitis C, a virus that can damage the liver. Most people who have the virus don't have any symptoms, sometimes for decades. But for some people like Lawrence, waves of intense fatigue hit several times a day.
"It takes away probably three or four hours of my waking day," he says.
There's also an increased risk of liver cancer or liver failure. So when Lawrence heard last year that there was a new drug regimen that could cure his disease, he went straight to his insurance company.
"The first thing they did, of course, was deny it," Lawrence says.
But the real problem, once he did get approval, was the price tag. Each pill costs $1,000.
"The first quote I got was $140,000 — and I would be responsible for $14,000 of it," he remembers.
Lawrence now lives on Social Security. There was just no way he could come up with $14,000 on his own.
"I went to everybody I knew of and fussed and fumed and all that stuff," he says.
Eventually, Lawrence got financial aid from a nonprofit to help him cover his out-of-pocket costs. Every morning at 10 a.m., he stood over his bathroom sink and swallowed two capsules.
"I'd go to take my pills and I'd go, 'There's one thousand.' " Before swallowing his second, he'd tell himself: "And there's another thousand."
Health advocates hear scenarios like this all the time from patients with a range of chronic conditions, including hepatitis C, HIV, multiple sclerosis, and rheumatoid arthritis.
"We've heard stories of people who've emptied their retirement savings to cover their drug needs," said Betsy Imholz, special projects director at Consumers Union, an advocacy group. "It's a really frightening, wild west situation for people who need these specialty drugs."
She and other advocates took their concerns to Covered California, the agency that implements the Affordable Care Act in the state. The advocates argued there should be a limit on how much consumers have to pay for these drugs.
The agency agreed, and Thursday the board voted to cap the monthly out-of-pocket costs for specialty drugs. Starting in 2016, most people will only have to pay a maximum of $150 or $250 per prescription, per month. These caps are for Covered California's so-called silver and platinum plans. Bronze plans will have caps of $500.
This policy will only apply to the 2.2 million people who buy coverage on the individual market. A bill under consideration in the California Legislature would extend that protection to many people with employer-based plans, as well.
Several other states are considering similar caps, some as low as $100.
"We're better than most, but not the absolute top of the heap," Imholz says.
Health insurance companies involved in meetings with Covered California tried to negotiate for higher caps — closer to $500 for all plans, Imholz says. Still, she adds, insurers did support the overall idea of caps.
Nicole Kasabian Evans of the California Association of Health Plans, says insurers see a correlation between the cost of a drug and adherence. Patients who can't afford what they're prescribed will sometimes split pills, or not take them at all.
"If you ultimately have to go back and take a second round, because you didn't take it right the first time, or you never took it and you develop a more serious health condition, it's not good for the consumer," Kasabian Evans says. "And it costs the health care system more money."
She says the root of the problem lies with the pharmaceutical companies that set the high drug prices. More than a half-million patients in the U.S. had medication costs that exceeded $50,000 in 2014, according to a recent report from Express Scripts, a company that manages prescription benefits.
"This is unsustainable, and it's going to have a major impact on the price of health care," Kasabian Evans says.
Even as the new rules require insurers to cap the co-pays for patients who take specialty drugs, the price the insurers pays will stay the same. Eventually, the insurers say, the only way to balance the books will be to raise monthly premiums for everyone in the health plan.
"So, if we really want to make sure consumers can afford prescription drug coverage," says Kasabian Evans, "then we need to deal with the root price of the drug."
Drugmakers defend their drug prices, citing the lengthy and expensive process of developing new medicines, and the many failed attempts that often precede a final success.
Such debates aren't helping Mikkel Lawrence right now. His battle over hepatitis C drugs continues. Turns out that $140,000 regimen he took last year didn't work. He fell into the 5 percent of patients who don't respond.
But now he's caught wind of a new drug that's coming through the pipeline. And he's already drafting a series of emails and letters to get it approved by his insurance plan — and to find the money to pay for the pills.
"As soon as they're out, I'm taking them," he says.