Bizness Lounge: Medicare Patient Skips Mortgage to Cope With $20,000 Bill

By Robert Langreth

Each month, William Piorun has to choose between paying his mortgage or buying medicine that keeps his pituitary-gland tumor in check.
This month and last, the 65-year-old Medicare patient paid the mortgage, and stopped taking a drug that his doctor says he needs to ward off the risk of premature death.
Once, hard choices like these were commonly forced only on those without health insurance. Now more patients who have insurance or Medicare must confront them as drug bills for those with chronic and life-threatening decisions soar.
Earlier this year, Piorun faced out-of-pocket bills of $1,000 a month for medicines. That -- together with $2,000 in monthly mortgage and home-equity payments, other bills and living expenses -- was too much for him.
“The average worker can’t pay these prices,” said the
self-employed auto-parts supplier, who makes $45,000 a year. He said he was “appalled” when he discovered his medicines cost $20,000 a month, including the share that Medicare picks up.
“You know your life is going to be shortened if you don’t take your medicines,” he said. “What do you do? Do you cut down on your food, your electricity, or your mortgage?”
More than 300,000 Americans are now taking combinations of prescription drugs that cost $50,000 or more a year, based on Medicare data and estimates by Milliman Inc., a Seattle-based actuarial firm. Many new cancer treatments cost $10,000 a month or more.

Cost Shifting

Prices like that have prompted one in every six employer-based plans to make patients pay a percentage share, typically about 20 percent, of the bill for high-cost specialty drugs used to treat serious conditions, according to a survey by the Pharmacy Benefit Management Institute. Meanwhile, the specialty drugs have made the cost-sharing provisions in Medicare more expensive for the elderly.
“More and more patients are finding they can’t afford these out-of-pocket costs,” said Daniel Klein, chief executive officer of the Patient Access Network Foundation, a Washington nonprofit that provides financial aid to pay drug bills. “It is a growing issue because of the way insurance companies now are shifting costs.”
“Now you have people who are insured but can’t afford the drug,” said Richard Evans, an analyst at SSR LLC in Stamford, Connecticut.
Under the federal Medicare drug plan for the elderly, 85,000 Americans received prescriptions costing more than $50,000 in 2012, the latest year of federal data.

Abnormal Growth

That’s more than triple the number with that cost profile in 2009. About 200,000 people in commercial plans generate annual drug costs of $50,000 and up, and tens of thousands more fit that description in the Medicaid program for the poor or in the Veterans Affairs system, according to Bruce Pyenson, a consulting actuary at Milliman.
Piorun’s tumor-engendered disease, acromegaly, results in excess hormones that cause abnormal growth of bone and other tissues. He needs high doses of two injected drugs to help keep the hormones under control. One, Sandostatin LAR from Novartis AG (NOVN), has cost him and his plan $5,773 per month, according to his Medicare benefit records. The other, Pfizer Inc. (PFE)’s Somavert, costs $13,341 a month. His share of the cost of the two treatments has been $956 monthly.

Aid Exhausted

Pfizer prices drugs based on their value to patients and to the health-care system, Steven Danehy, a spokesman, said in an e-mail. The company offers co-pay assistance directly to many patients, and gave $7.1 million last year to non-profits for patient financial aid. It would like to offer co-pay assistance to Medicare patients, but can’t under federal guidelines, Danehy said.
At Novartis, pricing takes into account patient value, development costs and market conditions, according to Eric Althoff, a spokesman. Only 8 percent of acromegaly patients need two doses a month of Sandostatin LAR, as Piorun does, he said. The company provided $542 million of free product to more than 86,000 patients last year.
Piorun, of Kintnersville, Pennsylvania, stopped taking Somavert in September, after $8,000 in charitable aid from Patient Access Network was running out. The next month, he skipped his mortgage payment and went back on the drug.
The mortgage company called him and his wife more than a dozen times demanding payment, he said. In November and December, Piorun paid the mortgage and again stopped taking Somavert.

Ill Effects

Pfizer’s Danehy said the company recently suggested another charity to Piorun when the company learned he had exhausted his financial aid.
UnitedHealth Group Inc. (UNH), which runs Piorun’s Medicare drug plan, focuses “on providing our members with access to the drugs they need at the lowest possible cost while maintaining sustainability for our plans,” the company said in a statement.
After going off Somavert, Piorun learned from his doctor that his levels of a hormone linked to most of acromegaly’s ill effects had started to rise. He said he worries that his life will be shortened if he can’t get the medicines.
Under his Medicare drug benefit, Piorun pays 33 percent of specialty medications’ costs until he reaches a coverage gap in the plan, also known as the “donut hole” that requires him to pick up a higher percentage. At the other end of the donut hole, he pays 5 percent of the cost.

Increased Risks

From late February through early December, Piorun’s various drugs -- including painkillers, blood-pressure medicines, and treatments to replace missing hormones -- have cost more than $130,000, according to his Medicare benefit statements, which show his portion at $9,153.
Piorun is at “greatly increased risk” of “hypertension, congestive heart failure, diabetes, sleep apnea, neurologic damage, colonic polyps and colon cancer, as well as premature death,” without Somavert and Sandostatin LAR, according to a letter Peter Snyder, his endocrinologist, wrote for the Pioruns in February, when they were trying to get insurance authorization.
Snyder says he regularly sees patients who are having trouble affording acromegaly drugs.
Piorun and his wife Robin, who have one grown son, live in a four-bedroom house on two acres of converted farmland not far from the Delaware River. He keeps his truck, a 2004 white Chevrolet, in a shed stacked high with wiper blades, oil filters, and other basic auto repair supplies.

Thickened Fingers

Acromegaly makes it harder to do the job, which involves 40 hours on the road each week to service station customers across eastern Pennsylvania and New Jersey, and added work at home stocking the truck. Robin Piorun, a 63-year-old retired nursery school teacher, helps out when her husband is too tired.
Abnormal bone growth from the disease has made his fingers unusually thick and painful. Piorun said walking more than a few hundred yards at a time hurts because of bone spurs in his feet. He takes Vicodin and Celebrex for the pain.
He said he’d like to retire, but can’t afford to because of the medical expenses. His wife has medical expenses too, and pays $687 a month premium for a plan under the Patient Protection and Affordable Care Act. Every day when he gets into his truck, which has 206,000 miles on it, he wonders if the engine will go, which would mean another big bill.
Somavert’s price has risen 63 percent since 2010, when Piorun started taking it, according to data from DRX, a unit of Connecture Inc. (CNXR) that provides comparison software for health plans. Pfizer declined to comment on those figures.

In Trouble

Until this year, Piorun was on a private plan that required a co-payment of only $60 a month for each of his two main drugs, and had no idea how much the full price was. The private plan was canceled by the insurer in January.
After he went on his new Medicare drug plan in February and a pharmacist told him how much the drugs cost, “that is I when I realized I am in trouble,” Piorun said.
In February, he took a week off and worked the phones looking for assistance. He said it was hard to get a clear answer from drug companies about what aid he might qualify for. Some forms from charities suggested the Pioruns wouldn’t qualify if they owned a car or a house and weren’t destitute, Piorun said. Several others didn’t offer aid for his disease.
Eventually, Robin Piorun talked to the Patient Advocate Foundation, of Hampton, Virginia. It hooked them up with Patient Access Network, which has an acromegaly fund that provided the $8,000 grant. By August, the money was almost gone, and Robin said she had been told they couldn’t apply for more aid until January 2015. That month, Piorun didn’t fill his Somavert prescription.

Policy Change

Realizing that the aid was running out, Robin Piorun connected with a staffer of U.S. Senator Bob Casey, whose office said it is working on the problem. On Aug. 29, she sent a letter to President Barack Obama complaining about high drug co-payments.
Five weeks later, a reply from a health-insurance specialist at the federal Centers for Medicare and Medicaid Services said the government can’t dictate co-pays to the insurance companies. The official urged her husband to shop around for a better plan.
On Dec. 19, after Bloomberg News called Patient Access Network about the Pioruns, Klein, the charity’s CEO, said he planned to revise the fund’s policy to allow for additional grants for acromegaly patients who need them.
If William Piorun doesn’t get more financial aid in 2015 than he received in the past, he said the funds will run out by summer and he will have to cut back on his medicines again.
“We are going to have to go through this every year,” said Piorun. “It is very stressful and exhausting.”

Monday, 22 December 2014

Medicare Patient Skips Mortgage to Cope With $20,000 Bill