When Is an Insurance Benefit Discriminatory? Landmark Complaint Seeks to Answer the Question

Formal complaints were recently filed with the U.S. Department of Health and Human Services’ Office for Civil Rights (OCR) regarding alleged discrimination against HIV patients in individual market health plans. Filed by the Center for Health Law and Policy Innovation of Harvard Law School (CHLPI) in coordination with local advocacy organizations, the complaints argue that health plans offered by seven insurers in eight states are discriminatory due to either: 1.) lack of coverage for drugs that are essential for the treatment of HIV, or 2.) high out-of-pocket costs that deter the use of essential drugs.

The Affordable Care Act (ACA) specifically authorizes regulators to examine and correct “discriminatory benefits” in the individual and small group markets. This power was put into the ACA not only to protect consumers but to also prevent insurers from “pushing” sick and expensive members to other carriers. Despite prodding from patient advocates, most regulators have not yet invoked this regulatory power. Given the difficulties in the ACA-reformed insurance markets, regulators may be reluctant to take actions that might compound insurer losses or lead to the discontinuation of certain plans.

The complaints were filed against Humana, Cigna, Highmark, Independence Blue Cross, UPMC Health Plan, Community Health Choice and Anthem Blue Cross Blue Shields. Humana faces complaints in Alabama, Georgia, Illinois, Louisiana, Tennessee and Texas — more than the other issuers. Other complaints focused on insurance benefits in Pennsylvania and Wisconsin.

These complaints follow a 2014 discriminatory benefit complaint lodged by the AIDS Institute and the National Health Law Program against four insurers in Florida. That complaint focused on so-called “adverse tiering” by which all drugs in a therapeutic class are placed on the highest cost-sharing tier of a drug formulary. Those complaints resulted in insurers reducing cost sharing for certain HIV drugs by moving them to less expensive drug formulary tiers. But, importantly, the 2014 complaints were focused on one state and handled by a state regulator with explicit authority to act on HIV concerns. These new complaints cross state lines, rely on more vague authority, and put a federal regulator in the driver’s seat.

As with most things related to the ACA, politics will likely impact OCR’s consideration of these complaints. OCR resisted consumer advocate calls to regulate more specifically on this topic in its recent non-discrimination regulation and may be reluctant to take novel action at the end of an administration. The boundaries of its authority are unclear vis-à-vis the Centers for Medicare and Medicaid Services (which oversees compliance with ACA insurance market reforms) and state regulators. So it is unlikely that these complaints will receive quick or decisive attention. But we imagine these complaints re-surfacing in 2017. If they do, the results could have national implications.