Covered California First to Cap Monthly Specialty Drug Copays

Covered California, the state’s health insurance exchange, changed the designs of its plans to cap policyholders’ monthly copayments for specialty drugs and help curb costs for consumers.

The majority of Covered California’s beneficiaries will have monthly payments for specialty drugs capped at $250 per month, the health exchange said Thursday in a statement. Some caps will range from $150 to $500. Covered California says it’s the first health exchange in the nation to adopt this model.

Before the changes, consumers had to reach an out-of-pocket maximum before their insurance coverage kicked in, meaning that with some expensive specialty drugs, customers had to pay for the first few months by themselves -- possibly thousands of dollars. This high upfront payment could deter consumers from using specialty drugs.

While a new generation of treatments is now emerging, often with spectacular results in diseases like cancer and hepatitis C, costs are soaring at the same time. More than 30 cancer drugs that hit the market from 2010 to 2014 cost $5,000 a month or more, according to data from Memorial Sloan Kettering Cancer Center in New York. New hepatitis C drugs that can eliminate the virus also have come under scrutiny for their price tags of $1,000 or more per pill, or $84,000 and up for a 12-week course of treatment.

Drugmakers have pushed for copayment caps to help insulate consumers from the high prices they charge for some specialty medications, relieving public pressure for lower prices. Insurers have said that introducing copay caps would simply result in higher monthly premiums for all consumers.

The copay caps will help policyholders with Silver, Gold and Platinum plans, though they would still be too expensive for consumers with the lowest-cost Bronze plans, according to a statement from California Insurance Commissioner Dave Jones. He had advocated for a $300 monthly maximum for Bronze plan participants instead of $500.

The change will result in premium increases of less than 1 percent across all plans in the first year, according to James Scullary, a spokesman for Covered California.

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