A bad policy

Tuesday, April 15, 2008 | 2:06 a.m.

As prescription drug costs continue to rise, health insurers are increasingly asking patients who take the most expensive drugs to pay significantly higher co-payments that can cost hundreds or even thousands of dollars a month.

The drugs typically are medicines prescribed for people with such serious and often chronic conditions as cancer and multiple sclerosis, The New York Times reports.

Rather than charging a fixed co-payment, some insurers are charging patients a percentage of a drug’s cost, which can really add up. One patient told the Times that his insurance requires him to pay $4,000 of the $13,500 it costs for a 90-day supply of his cancer medication.

This pricing system, often called Tier 4, helps keep premiums lower for the other, healthier members of the insurance pool. The concept took root in the Medicare drug plans and is now included in 86 percent of those plans.

Tier 4 drugs typically save patients’ lives or slow the progress of their diseases. So not taking them isn’t an option. James Robinson, a health economist with the University of California, Berkeley, called the system “a very unfortunate social policy” and said that “the more a sick person pays, the less the healthy person pays.”

That concept is at odds with the original philosophy behind health insurance, which was supposed to distribute the cost of treating illnesses over a large group.

It seems oddly coincidental that Tier 4 pricing has increased during the same period in which the Bush administration has given private drug companies free rein to set Medicare prescription drug prices. But as the experts noted, this philosophy is skewed. Health insurance should offer full protection to all who are covered, not simply the healthy.