Rare disease advocacy often intersects with the complex world of health insurance. With some health benefit plans regulated by the federal government and others regulated by states, or by both, novice and experienced advocates are left wondering where to begin. This section provides an overview of each type of insurance and offers practical guidance on advocating for improvements within each system. By gaining a clear understanding of these systems, advocates will be better prepared to help rare disease patients receive the comprehensive care they deserve.
Types of Health Insurance
There are two types of health insurance: commercial/private insurance and public health insurance. Commercial insurance includes employer sponsored plans and individual plans typically available on the Marketplace. Public health insurance includes Medicaid/CHIP, Medicare and TRICARE.
Employer sponsored plans may be fully insured or self-insured. Fully insured employer health plans are regulated and overseen by each state and the health insurer is responsible for paying claims. However, many employers choose to ‘self-insure’ rather than purchase health insurance for their employees. In self-insured plans, the employer pays the health care claims for employees as opposed to a health insurer holding the financial risk. The Department of Labor provides oversight of these plans. Marketplace plans are individual private health plans also known as ACA plans.
Medicaid covers low-income families, qualified pregnant women and children, and individuals who receive Supplemental Security Income (SSI). Some states offer Medicaid coverage to additional groups of people such as those with disabilities who don’t qualify under other mandatory groups. Medicare provides coverage to individuals over the age of 65 and younger people who have certain disabilities. TRICARE covers active and retired service members and their families.
Access & Reimbursement Concerns for Rare Disease Patients
- Experimental/Investigational Policies: The insurer considers the treatment not sufficiently proven in clinical studies per their policy. This can be common in drugs approved via the Accelerated Approval pathway.
- Restrictive Prior Authorization (PA) Criteria: Health plan clinical criteria for coverage can often include aligning coverage with clinical trial inclusion/exclusion criteria vs. the FDA approved indication, restricting access.
- Not on Formulary: Certain medications can be completely excluded from coverage if not on the formulary list.
- Step Therapy: These rules are used by some health and prescription drug insurance plans to require a patient to try one or more similar, lower cost drugs to treat their condition before the plan will pay for the prescribed drug
- Coverage Exclusions: Certain treatments, conditions, or services can be excluded from the patient’s insurance policy, even if medically appropriate.
- Non-Medical Switching: This occurs when an insurer or Pharmacy Benefit Manager (PBM) makes insurance coverage changes that force patients off their current therapies for no other reason than to save the plan money
Cost Sharing Programs
- Copay Accumulators: Policies put in place by some insurance companies and PBMs that prevent manufacturer copay assistance from counting towards a patient’s deductible and maximum out-of-pocket spending.
- Copay Maximizers: Policies that prevent manufacturer’s payments from counting toward your deductible and out-of-pocket maximum. The full value of the copayment program is applied evenly throughout the benefit year, which can lead to higher costs for the patient for other healthcare costs.
- Alternative Funding Programs: Policies that limit or deny coverage for certain drugs, requiring enrollment with a third-party company that seeks to get the patient enrolled in the drug manufacturer’s Patient Assistance Program (PAP).
How Coverage is Determined
Payers typically utilize multiple sources when developing coverage criteria, including:
- Peer-reviewed, published medical journals
- Evidence-based consensus statements
- Guidelines from nationally recognized health care organizations
- Nationally recognized compendia
- Review of available studies
- ICER reviews
- Proprietary decision support tools
- Many plans will also follow CMS written guidelines.
How Does Policy Play a Role?
Congress, federal agencies, and state governments all play a role in developing, implementing, and overseeing policies that shape prescription coverage and reimbursement for rare disease therapies. Understanding how these different levels of government interact and where the authority to make change lies for different types of health insurance is essential to shaping policy or responding to access threats.
