Barack Obama Calls on OPM Director to Examine Skyrocketing Copayment Costs for Prescription Drugs

April 16, 2008 -- WASHINGTON, D.C. - U.S. Senator Barack Obama today called on Linda Springer, the Director of the Office of Personnel Management (OPM), to respond to reports that certain health care plans are charging unnecessarily high copayments for prescription drugs. A recent report in the New York Times indicated that many health care plan participants, including federal government employees, are facing copayments as high as 20-33 percent of the cost of drugs.

Senator Barack Obama: Photo by Barack Obama campaign (CC)

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Such high copayments can translate into thousands of dollars out of pocket for patients affected by diseases such as cancer, multiple sclerosis, or hepatitis, rendering such drugs unaffordable. Some health care plans, including the Kaiser health plan mentioned in the Times article, are offered through the Federal Employees Health Benefit Program (FEHBP), which covers over 8 million federal employees nationally and is regulated by OPM.

In the letter, Senator Obama requests that OPM provide information as to the prevalence of "tiered copayments" in certain plans, how many federal employees are charged in each tier of copayment, whether enrollees can choose between plans with various copayment options, and what further federal regulation is needed to ensure federal employees have access to affordable life-saving or disease modifying drugs.

The text of the letter is below:

Dear Ms. Springer:

An April 14, 2008, article in the New York Times highlighted the unconscionable practice of health plans charging exorbitantly high copayments for drugs. Many participants in these health plans are facing copayments as high as 20-33 percent of the cost of drugs, subject to an annual maximum. Such high copayments can translate into thousands of dollars out-of-pocket for patients affected by diseases such as cancer, multiple sclerosis, or hepatitis, rendering such drugs unaffordable.

This situation is troubling for several reasons. For many of these drugs, there are no affordable drug alternatives, including generic drugs. These higher copayment schemes also do not take into consideration the value of a drug, with respect to long-term financial implications and health and quality of life outcomes for patients. Further, this practice runs contrary to the underlying premise of health insurance, which is to spread health care risk, unfairly penalizing patients who become ill.

The New York Times article focuses on the Kaiser health plan, which is offered through the Federal Employees Health Benefit Program (FEHBP). FEHBP provides health coverage to over 8 million federal employees nationally. With over 200 health plans participating in FEHBP, enrollees have many options from which to choose. Yet, the majority of federal employees are enrolled in a national plan, and only a small fraction of employees change plans every year.

Given the Office of Personnel Management's role in overseeing FEHBP, I request that you respond to the following questions:

* What is the prevalence of "tiered copayments" in such plans and how are such copayments structured? What are the long-term trends and projections for this payment model?

* What are the median and maximum copayments required? Is there a cap on the amount to be paid out-of-pocket for patients who are prescribed premium drugs in the higher tiers ?

* Have "tiered copayments" demonstrably lowered premiums for enrollees? If so, to what extent?

* How many FEHBP participants are charged copayments in each tier of copayment? What is the range of out-of-pocket costs for participants in each tier?

* Are FEHBP enrollees in a particular health plan able to choose between insurance products that charge flat copayments and those charging a certain percentage of drug cost as the copayment?

* What percentages of drug costs are charged to FEHBP enrollees as copayments for drugs for which no generics or cheaper alternatives exist?

* What, if any, additional federal regulation is needed to ensure that FEHBP enrollees are able to access critical, life-saving or disease modifying drugs?

I would appreciate an answer by April 30, 2008. Thank you.

Sincerely,

Barack Obama
United States Senator

Source: Senator Barack Obama