In response to consumer complaints and a class action lawsuit on behalf of HIV/AIDS patients in California, Anthem Blue Cross has agreed to suspend a program that would have barred patients from purchasing certain specialty medications at local pharmacies.  Under the program, patients would have been required to obtain their medications by mail order, threatening their health and privacy according to the lawsuit.

Blue Cross announced the suspension of the mail order program in a letter arriving in consumer’s mailboxes this week.  Download a copy of the letter here.

“The deferment of the mail order program is great news for thousands of Blue Cross customers with HIV/AIDS who were facing risks to their privacy and health,” said Jerry Flanagan, staff attorney for Consumer Watchdog.

The lawsuit, filed last month in San Diego Superior Court by Consumer Watchdog and Whatley Kallas LLC, alleges that the mandatory mail order program illegally targets HIV/AIDS patients. The lawsuit further alleges that due to the complex nature of HIV/AIDS drug regimens, patients rely on their local pharmacists who, working directly with the patients, monitor potentially life-threatening adverse drug interactions, and provide essential advice and counseling that helps HIV/AIDS patients and their families navigate the challenges of living with a chronic and often debilitating condition.  

In addition to the health concerns raised by the change in their continuity of care, HIV/AIDS patients have expressed serious concerns associated with a loss of privacy due to the proposed mail order program. For example, HIV/AIDS specialty medications often need to be delivered in refrigerated containers. Patients who live in apartment buildings or need to have their drugs delivered to their place of employment are concerned that neighbors and co-workers who are not aware of their condition will come to suspect that they are seriously ill.

Under the mail order program announced by Blue Cross in December and slated to go into effect on March 1, 2013, HIV/AIDS patients’ insurance policies would have no longer covered medications purchased at local pharmacies.

The deferment is intended to allow Blue Cross, Consumer Watchdog, and Whatley Kallas LCC time to develop a more consumer friendly program.

“Blue Cross should be commended for listening to the serious and heartfelt concerns of their customers who depend on local pharmacists for their life-saving medications,” said Edith Kallas of Whatley Kallas LLC. “We look forward to working with Blue Cross to ensure its mail order program benefits consumers without unfairly targeting its most vulnerable patients and providing them appropriate opportunities to choose what is best for them.”

Download the lawsuit filed by Consumer Watchdog and Whatley Kallas, LLC here.

In its quest for more profits, Anthem Blue Cross has begun telling patients who have very serious diseases and need so-called “specialty drugs” that they cannot use their local pharmacy where many have long term relationships, but must instead order their life-saving medications from a mail-order pharmacy.

As Los Angeles Times Consumer Columnist David Lazarus recently noted, specialty drugs are used for complex conditions and can cost thousands of dollars a month. Patients suffering from chronic diseases like HIV, cancer, and hemophilia use such medicines.

In the Los Angeles area HIV patients are particularly hard hit by Anthem’s unilateral decision that after Jan. 1, patients needing specialty drugs to treat their conditions must buy them from mail-order pharmacy CuraScript.

In a letter to patients, the insurance giant wrote:

“Using a retail pharmacy will be considered going out-of-network. And your plan doesn’t have coverage for that. So you’ll have to pay the full price of the drug.”

According to Lazarus Jacques Liberman, 57, of Cathedral City received one of the letters the other day. He is HIV-positive and takes a drug called Atripla to help prevent his condition from transforming into full-blown AIDS.

“Who is Anthem to tell me where I have to buy my medicine?” Lazarus quoted him as saying. “Why should I have to buy it from some mail-order company instead of the drugstore that I have been going to for a long time?”

But it’s more than just an in infringement on personal freedom. Patients who need specialty medicines suffer from complex disease that require complex treatment. The pharmacist is virtually a member of the treatment team offering advice and closely monitoring the patient’s condition.

David Balto, a Washington attorney who represents some of the specialty pharmacies, explains the relationship like this:

“Specialty pharmacies, the pharmacies that carry these rare, expensive drugs, build strong personal and clinical relationships with their patients, making sure that they receive the drugs they need when they need them. Most also provide a full slate of advising and counseling services to help patients and their families navigate the challenges of living with a chronic and often debilitating condition. Many specialty pharmacies also have programs to help low-income patients afford their ever rising co-pays.”

Anthem proposes to replace that relationship with an 800 number. Anything for a buck, I suppose.

What’s not clear yet is what can be done to stop this abuse. Consumer Watchdog is investigating.  If you’ve been affected by the change please let us know.

Anthem Blue Cross could owe big refund checks to 730,000 Californians if its proposed rate hikes of up to 25% are deemed excessive thanks to an initiative voters will consider on the 2014 ballot.

The ballot measure requires health insurance companies to get approval before raising rates and allows that refunds be ordered on rates that are considered excessive after November 6, 2012.  When voters approve the measure, the insurance commissioner will have the power to retroactively order refunds for excessive rates.

Read the initiative here

“Anthem and every health insurance company in California are on notice: Excessive rate hikes they impose today could mean big refund checks for consumers down the road,” said Carmen Balber with Consumer Watchdog.

Anthem has proposed rate hikes averaging 18%, and as high as 25%, for 630,000 individual policyholders.

It has proposed rate hikes averaging 15%, and as high as 25%, for another 100,000 individual policyholders.

The Insurance Rate Public Justification and Accountability Act qualified for the ballot in August, after Consumer Watchdog Campaign and allies submitted petitions containing 800,000 voter signatures.

“Californians can no longer afford the outrageous double-digit rate hikes health insurance companies like Anthem have imposed year after year, and sometimes multiple times a year, ” said Jamie Court, proponent of the ballot measure and president of Consumer Watchdog. “This initiative gives voters the chance to take control of health insurance prices by forcing health insurance companies to publicly open their books and justify rates, under penalty of perjury.”

Senator Dianne Feinstein, the first person to sign the ballot petition, is an honorary co-chair of the ballot initiative campaign, which is also supported by California Insurance Commissioner Dave Jones.

The ballot initiative builds on California’s successful model of rate regulation for auto, home and other property and business insurance. That law, Proposition 103, was enacted by the voters in 1988 and has saved California drivers $62 billion since it was enacted.

The Insurance Rate Public Justification and Accountability Act:

• Requires health insurance companies to publicly disclose and justify, under penalty of perjury, proposed rate changes before they take effect.
• Makes every document filed by an insurance company to justify a rate increase a public record.
• Requires public hearings on proposed rate increases.
• Gives Californians the right to challenge excessive and unfair premium rate increases.
• Prohibits health, auto and home insurers from considering Californians’ credit history or prior insurance coverage when setting premiums or deciding whether to offer coverage.
• Gives the elected insurance commissioner authority to reject unjustified rate increases.

Two years ago, as federal health reform lay on death’s door, CEO Angela Braly, head of Blue Cross’s parent company Wellpoint, spit on beleaguered patients. She sat through poignant Congressional testimony from customers whose lives were being ruined by spiraling premium hikes, then Braly testified that the public outrage was “a triumph of sound bites over substance.”

The CEO’s arrogance and Anthem Blue Cross’s planned 39% rate hike were enough to revive federal reform in the court of public opinion. The federal law passed, but failed to give California the power to reject unreasonable rate hikes.

That’s why, on May 1, one million Californians began paying hundreds of millions of dollars more for their health insurance. It’s a plot right out of Groundhog Day, only it happens every Spring, Winter, Summer and Fall.

Recently Braly, the health insurance world’s Marie Antoinette, was at it again, only in a more intimate setting. On a conference call with shareholders she attacked a pending rate regulation ballot measure in California as unnecessary because she said federal reform was all patients needed. In other words, Braly’s advice for the one million who face a choice between paying for food or health insurance: Let ’em eat cake.

Want to fight back?  The final signatures are being collected in the next couple of days to submit 800,000 signatures for a ballot petition taking power from Braly and the other monarchs of health insurance to raise rates whenever they want without any justification.

Californians can download and sign the ballot petition at JustifyRates.org and vote in November to require Anthem Blue Cross and other health insurance companies to get permission before they raise rates.  But voters have to sign today in order to mail back the ballot petition in time to have theirs’ delivered with the other 800,000 Californians demanding this change.

Health insurance rates are like a runaway train and there’s no police force or firefighting squad with the power to stop them.  Thirty-five states require health insurance companies to get permission before raising rates, but not California.

Patients pay the price.

In Studio City, a self-employed single mom watched her health insurance premium triple over the last decade. On May 1st the price climbed by 16%. She asks,” If I have to get pre-approval from my insurance company every time I want my health care paid for, shouldn’t they have to get approval when they want me to pay more?”

For a decade the legislature has answered no, arguing, exactly as Braly does, that the market and federal health care reform can be trusted to moderate rates.   We can see how well enlightened despotism has worked in health care.

Over the last decade health insurance premiums have shot up 153% — growing five times the rate of inflation (29%). Four companies, including Anthem Blue Cross, control 71% of the health insurance market – competition isn’t in the cards. As a result Californians don’t just move to cheaper plans, they also drop insurance. California has one of the nation’s highest uninsured rates.

Since 2003, the California legislature has refused to pass a law requiring that health insurance companies get approval before raising rates in the same way that auto insurance and home insurance companies have to today.  That insurance company lobbying power is why consumer advocates like myself have joined with Sen. Dianne Feinstein and Insurance Commissioner Dave Jones to qualify the ballot measure that requires health insurance companies to live up to the same standards as other insurance companies.

It’s high time to dethrone Braly and the other health insurance monarchs who are accountable to no patient and no insurance commissioner in the state of California.  They raise rates because they can, not because it’s necessary.  800,000 California voters are about to take on Braly’s “Let ’em eat cake” corporate views.  Act now and you can be with us.