PrEP Cost Analysis for Covered California Health Plans

Open enrollment for Covered California, the State’s health insurance marketplace, begins November 1, 2016. Before enrolling, there are important things that you should consider if you’re HIV-negative and interested in accessing HIV pre- exposure prophylaxis (PrEP). The purpose of this document is to help you better understand how much you can expect to pay for PrEP under various Covered California health plans, as costs to access PrEP vary by income, area of residence, and other factors.

PrEP is an HIV prevention strategy in which HIV-negative individuals take a daily medication to reduce their risk of becoming infected. Currently, the only drug approved by the Food and Drug Administration to be used for PrEP is Truvada®. People who take PrEP are usually required to see their healthcare provider for routine testing and follow-up care. Specifically, according to Clinical Guidelines from the Centers for Disease Control and Prevention, once PrEP is initiated, patients should return for follow-up approximately every 3 months. Not all doctors are familiar with PrEP and some may resist prescribing it. If you’re interested in PrEP, it’s important to choose a Covered California plan that ensures you can find a doctor who will prescribe it. Before you make any final decisions, be sure that the primary care doctor you are considering takes the plan you want and is willing to prescribe PrEP. A list of doctors with experience providing PrEP can be found at: www.pleaseprepme.org. A flow chart offering step-by-step instructions for acquiring PrEP can be found at www.projectinform.org/pdf/PrEP_Flow_Chart.pdf. More information about PrEP, including effectiveness and side effects, can be found at www.prepfacts.org.

The Patient Protection and Affordable Care Act (ACA) enables individuals and small businesses to purchase health insurance at federally subsidized rates via statewide health insurance exchanges like Covered California. Under the ACA, most individuals who are U.S. citizens, U.S. nationals, or lawfully present immigrants are required to have health coverage (there is a tax penalty for those who do not have health coverage and do not qualify for an exemption). All eligible Californians can sign up during the annual open- enrollment period from November 1, 2016 to January 31, 2017. Many others may be eligible to sign up at any time during the year due to a life-changing event, such as getting married, having a child, or moving. Medi-Cal enrollment for those with incomes less than 138% of the federal poverty level (FPL) ($16,394 for individuals in 2017) is year-round and also accessible via the Covered California website [www.coveredca.com].

There are 11 health insurance plans available via Covered California in 2017:

1. Anthem Blue Cross of California
2. Blue Shield of California
3. Chinese Community Health Plan
4. Health Net
5. Kaiser Permanente
6. L.A. Care Health Plan
7. Molina Healthcare
8. Oscar Health Plan of California
9. Sharp Health Plan
10. Valley Health Plan
11. Western Health Advantage

Under Covered California, the state is comprised of 19 different regions—each with different pricing and health insurance options, as depicted in Figure 1.

Nearly all Covered California consumers have at least three health insurance companies to choose from in their region

and in some regions consumers have as many as seven. For example, if you reside in San Francisco, Pricing Region 4, you can choose from Anthem, Blue Shield, Chinese Community Health Plan (CCHP), Kaiser Permanente, Health Net, or Oscar. In Fresno, Pricing Region 11, you can choose from Anthem, Blue Shield, Kaiser Permanente, or Health Net.¹ Los Angeles County is divided into two pricing regions: 15 and 16. In Pricing Region 16, you can choose from Anthem, Blue Shield, Kaiser Permanente, Health Net, LA Care, Oscar, or Molina Healthcare.² There are also three different types of insurance plans: health maintenance organizations (HMOs), preferred provider organizations (PPOs), and exclusive provider organizations (EPOs). Plans vary by region with respect to which type or types of insurance they provide.

• HMOs are “managed care” and assign a Primary Care Physician (PCP) to oversee your care. HMOs usually require members to get a referral from their PCP to see specialists and HMOs only cover visits to doctors and hospitals within their plan’s network.
• PPOs are more flexible when choosing doctors and specialists. PPOs cover doctor visits inside and outside their networks. However, you pay a higher cost for out-of- network care.
• EPOs are similar to PPOs because members may not need a referral to see a specialist. However, EPOs do not cover visits to doctors outside the plan’s network. Their network is “exclusive.”

Covered California health insurance plans are sold in four levels of coverage or metal categories: Bronze, Silver, Gold, and Platinum. As the metal category increases in value (from Bronze to Platinum), so does the percentage of medical expenses that a health insurance plan covers relative to what you are expected to pay in copays and deductibles. Typically, Platinum plans cover 90% of health care costs, while you pay 10%; Gold plans cover 80%, while you pay 20%; Silver plans cover 70%, while you pay 30%; and Bronze plans cover 60%, while you pay 40%. Plans in higher metal categories have higher monthly premiums, but when you need medical care you pay less. You can choose to pay a lower monthly premium, but when you need medical care you pay more. When deciding which level of coverage best meets your health needs and budget, note: If you are interested in accessing PrEP, Bronze plans should generally be avoided. Despite their low premiums, they have high deductibles and out-of-pocket costs that are likely to make accessing some medications and benefits unaffordable. It’s very important, however, to consider both out-of-pocket costs and monthly premiums before you select a health plan.

Each health insurance company has a list of covered medications, known as a drug formulary. It is important to remember that a plan’s drug formulary can change at any time and the plan will have the most up-to-date formulary. Drugs on the formulary are grouped into four tiers: generic (Tier 1), preferred (Tier 2), non-preferred (Tier 3), or specialty (Tier 4). On Covered California you will be charged no more than $250 per month for one 30- day supply of a Tier 4, specialty drug for Silver, Gold, and Platinum plans and no more than $500 per 30-day supply for Bronze plans. Drugs in lower tiers will have lower costs. Truvada® is currently covered by all Covered California health plans and is listed as a Tier 2, preferred drug.

All health insurance plans sold through Covered California have standard benefits, including coverage for prescription drugs, doctor visits, hospitalizations, labs, and mental health and substance abuse services. Differences in these standard benefits help consumers compare health insurance options. It is important to review each plan’s price, provider network, “Summary of Benefits and Coverage,” as well as more detailed coverage descriptions, to find the plan that best suits your needs.

There are two cost categories related to having health insurance and accessing care: monthly premiums (minus premium assistance, if applicable); and “out of pocket” costs (minus any cost-sharing subsidies, if applicable).

Monthly premiums are the price you pay for having health insurance, regardless of whether you use it. If your income is less than or equal to 400% FPL, or $47,520 for a

single person, you may qualify for help paying for your health insurance premium, regardless of the metal level you choose. This is known as premium assistance or the federal government’s “advance premium tax credit.” You can choose to receive this assistance in one of two ways:

1. as an advance each month, which lowers your monthly payments, or
2. at the end of the year when you complete your taxes. The amount you pay in monthly premiums will vary depending on:
   • your age (the older you are, the more expensive health insurance is);
   • your region (typically, if you live in Northern California you will pay more for health insurance than if you live in Southern California);
   • your income (given that you can get premium assistance if your income is less than or equal to 400% FPL, as described above);
   • the metal level you choose (you will pay the highest premiums for Platinum level, followed by Gold, then Silver, then Bronze).

Covered California recently announced average premium increases of 13.2 percent for 2017, so it is very important for consumers to shop to find a plan that best meets their health needs and budget.

Out-of-pocket costs include an annual deductible, if applicable, and copays or coinsurance for medications, lab tests, doctor visits, and hospital stays. If your income is less than or equal to 250% FPL, or $29,700 for a single person, you may qualify for cost-sharing subsidies, which reduce your out-of-pocket costs including copays, coinsurance and deductibles. They may also reduce your out-of-pocket maximum. Cost-sharing subsidies are only available if you select a Silver plan – known as Enhanced Silver plan. There are three categories of Enhanced Silver – Silver 73, Silver 87, Silver 94.

For single households, if you make:

• between 139-150% FPL ($16,395 – $17,820), you can qualify for a Silver 94 plan
• between 151-200% FPL ($17,821 – $23,760), you can qualify for a Silver 87 plan
• between 201-250% FPL ($23,761 – $29,700), you can qualify for a Silver 73 plan

Drug deductibles and copays are lower for the Silver 94, 87, and 73 than the Silver 70 (basic Silver plan without enhancements) because costs are subsidized for lower income individuals to make the plan affordable based on income.

The out-of-pocket maximum is the most you would have to pay for medical expenses during the year (not including your monthly premiums). Keep in mind that out-of-pocket maximums differ depending on your income and which metal level you select. Deductibles, copays and coinsurance count toward your out-of-pocket maximum unless they are considered “out of network” or “not covered.” In most cases, once you reach your out-of-pocket maximum, your insurance will cover 100% of the costs they consider medically necessary. It’s important to understand what out-of- pocket costs will count toward your out-of-pocket maximum before signing up for a new health plan.

To summarize, the amount you pay in “out-of-pocket” costs (in addition to your monthly premium) will vary depending on:

• the amount and type of health services and prescription medication you access;
• your income (you are eligible for cost sharing subsidies if your income is between 138% -250% FPL);
• the metal level you choose (highest out-of-pocket costs for Bronze level);
• your annual deductible;
• your out-of-pocket maximum.

The costs associated with taking PrEP include:

1. the cost of medication (Truvada^®);
2. the cost of doctor visits;
3. the cost of laboratory tests your doctor orders;
4. the cost of health insurance (i.e., your monthly premiums).

Without insurance, Truvada^® costs approximately $1,250 monthly or $15,000 annually. However, under Covered California plans, the cost you pay will be much less and depends on your plan’s drug formulary and the metal level you choose. Across all Covered California plans, Truvada^® is listed as a Tier 2 or preferred drug. Gilead, the company that manufactures Truvada^®, offers a copay card to help cover the cost of the medication for those who have insurance – up to $3,600 a year. Table 1 depicts the annual cost of Truvada^® by metal level with and without the Gilead copay card. These costs were calculated using information from Covered California’s 2017 Patient- Centered Benefit Designs and Medical Cost Shares. A 12-month supply of Truvada^® ranges from $120 – $6,000 without the Gilead copay card, and from $0 – $2,400 with the Gilead copay card, depending on the metal level you choose. Information about the copay program can be found at www.gileadcopay.com. You may also be able to obtain financial assistance from the Patient Access Network at www.panfoundation.org/fundingapplication/welcome.php or the Patient Advocate Foundation at www.copays.org/diseases/hiv-aids-and-prevention.

In spring 2017, the California Department of Public Health, Office of AIDS will launch a PrEP financial assistance program. The program will cover PrEP-related out-of- pocket costs (e.g., copays for medication, doctor visits, and laboratory tests) for qualified individuals with annual incomes below 500% FPL.

Additional out-of-pocket costs for PrEP, including doctor visits, laboratory tests, as well as deductibles and out-of-pocket maximums, are summarized by metal level in Table 2. Cost estimates include five doctor visits and five labs during the first year of PrEP initiation to account for the initial visit, a one-month follow-up visit, and then three additional follow-up visits every three months for the duration of the year. Additionally, out-of-pocket maximums may vary from plan to plan with respect to whether they include deductibles. For our cost estimations, we assume that deductibles count towards out-of-pocket maximums. In our calculations, we assume a primary care visit costs $200. Out-of-pocket costs may be more if you are required to see a specialist.

As described above, monthly premiums vary significantly based on a number of factors. To illustrate this point, Table 3 lists the monthly premiums for health plans available in Los Angeles, San Francisco, and Fresno, by metal level, for different ages. These premiums don’t include all options under each plan (e.g. EPOs and PPOs were not included if an HMO was also available). These premiums also do not include any premium assistance or tax savings, given they were calculated for individuals with incomes above 400% FPL or $47,520 for a single person. Finally, Tables 4, 5, and 6 estimate the total costs (out-of-pocket costs and monthly premiums) associated with accessing PrEP via Covered California for fictitious individuals of different ages and incomes living in different regions of California. Table 7 demonstrates how those costs were calculated.

Selecting the best Covered California health plan to meet your overall healthcare needs can be challenging. Certified Enrollment Counselors and Insurance Agents, as well as Covered California Call Center representatives, are available to answer questions about financial assistance and can help you compare plans. You can find free, confidential, in-person help at http://www.coveredca.com/get-help/local/.