The new health-care reform legislation, signed into law on March 30, 2010, introduced major changes to the current system that likely will affect many of the 46 million people with some form of arthritis – including 300,000 children with juvenile arthritis – across the country. While many of the provisions won’t take effect for several years, others have already started. Below is a brief summary of some of those key items and how they may affect you.

Gradually closing the Medicare Part D doughnut hole

The “doughnut hole” is jargon for the lapse in Medicare prescription, or Part D, coverage when beneficiaries, who have been paying a portion of their medication costs through copays, hit the annual limit ($2,830 in 2010) in medication expenses. After that, recipients are responsible for all drug costs until their out-of-pocket expenses reach $4,550 (the limit in 2010), the catastrophic coverage point at which the program will kick in 95 percent of costs until the end of the year.

Everyone on Medicare, such as disabled people less than 65, is eligible for Medicare Part D and, therefore, potentially subject to a coverage gap.

Effective in calendar year 2010, the Medicare Part D drug program provides a $250 rebate to Medicare beneficiaries who hit the doughnut hole. Effective 2011, beneficiaries who reach the donut hole receive a 50 percent on band name drugs. By 2020 beneficiaries will receive discounts of 75 percent on brand name and generic drugs.   

The gap in coverage has been an important advocacy issue for the Arthritis Foundation since so many people with arthritis fall into the doughnut hole. Those on biologic therapies, which can cost anywhere from $20,000 to $50,000 a year, easily reach this threshold.

According to the Freedonia Group, an international business research company, the demand for biologics is expected to grow 6.5 percent per year to $102 billion in 2015. Currently, many people discontinue use of their biologic medications because they cannot absorb the 100-percent cost of the medications when they reach the doughnut hole.

Allowing adult children to stay on their parents’ health insurance policies up to the age of 26

As the economy continues to stagnate, it is harder for college graduates to find full-time jobs. That could mean a sizeable population living without health insurance. This provision, which took effect shortly after the signing of the legislation, allows adult children to stay on their parents’ plans longer than most plans currently allow. (Some states have passed legislation requiring insurers to offer parents the option of covering children into their 20s.)

This could be particularly beneficial for young adults with the pre-existing condition of juvenile arthritis who must take powerful drugs for their disease, according to rheumatologist Nathan Wei, MD, of the Arthritis and Osteoporosis Center of Maryland in Frederick. Dr. Wei, whose college-age son has juvenile arthritis, is pleased that his child will not have to leave the family plan, which is helping pay for his expensive biologic medications. Currently, Dr. Wei pays a $70 per month co-pay for the drugs, which cost $1,500 a month.   

“Once he leaves college it’s highly unlikely that without this new health-care reform bill he would have been able to secure a job with health care that would pay for his pre-existing condition,” Dr. Wei says of his son.


 

This provision could have a major impact on the nearly 300,000 children who have a form of juvenile arthritis. It will take effect six months after the law’s enactment. The provision will apply to all people, including adults with pre-existing conditions, starting in 2014.

It certainly will have implications for those who are taking arthritis medications. A recent study by the Centers for Disease Control and Prevention found that the average amount individuals spend on arthritis prescriptions has nearly doubled between 1997 and 2005, from $970 to $1,811.

“It’s an expensive condition,” notes Meg Doherty, a nurse practitioner and CEO of Norwell Visiting Nurse and Hospice in Massachusetts.  

As result of the passing of the law, “those children [with juvenile arthritis] cannot be discriminated against by insurance companies, which is a great thing,” she says. “Within [four] years, adults with pre-existing conditions cannot be discriminated against either … It’s a huge, huge thing for people with chronic disabilities.”

Her company handles 550 patients a day. Approximately one-third are 85 and older and have osteoarthritis.  

Banning insurance companies from dropping people from coverage when they get sick

This provision, which also took effect shortly after the law was signed, may have been one of the most significant provisions for the first year of the law’s implementation. Arthritis is a common cause of disability that can afflict people at any time of life. Those who develop it easily can rack up thousands of dollars in bills from diagnostic testing and drug treatments.

A couple of statistics from the Centers for Disease Control and Prevention:

• Each year, arthritis results in 992,100 hospitalizations and 44 million outpatient visits.
• Arthritis and related conditions in 2003 cost the U.S. economy nearly $128 billion per year in medical care and indirect expenses, including lost wages and productivity.

Knowing they are not at risk of losing their health insurance likely will provide peace of mind for many who fight arthritis on a daily basis.

Forbidding restrictive annual limits on coverage

Starting in 2014, the law will prohibit insurance companies from placing annual limits – or caps – on coverage. Until then, Kathleen Sebelius, the secretary of the Department of Health and Human Services will determine annual limits.  This means that initially insurance companies will be able to place financial caps on annual coverage, but Sebelius can tighten the rules regarding these thresholds until 2014, when caps are prohibited.


 

Because of the high cost of biologics, such a provision is good news for those with inflammatory forms of arthritis who can swiftly meet the annual maximums, experts say.

Prohibiting individual and group health plans from placing lifetime limits on coverage

Whether it’s $1 million, $2 million or another amount, many insurance policies have a cap on what they will pay for coverage over a person’s lifetime.  

Effective six months after the law’s enactment, companies are no longer able to impose such a limit. It’s worth knowing that it can only take some major surgeries such as transplant operations to meet the lifetime cap, offers Eric Rackow, MD, president and CEO of SeniorBridge, a care management company that helps people with the challenges of complex chronic illness, such as arthritis.   

“Let’s say you have liver disease and need a liver transplant, you can use up your lifetime cap very quickly,” he explains.

The same scenario could be true for someone with severe rheumatoid arthritis who has to take expensive biologic medications, he adds.  

“Depending on your policy, [if] you had a severe exacerbation [of arthritis], you might exceed the limit in a year or over your lifetime,” he says.

Providing a temporary high-risk pool for uninsured beneficiaries until state-based exchanges become available

This pool, which went into effect almost immediately after the law’s enactment is a way station of sorts for people with pre-existing conditions until the insurance exchanges become available. The state-based American Health Benefit Exchanges and Small Business Health Options Program (SHOP) Exchanges are not set to start until Jan. 1, 2014. (These will allow individuals and small businesses with up to 100 employees to purchase qualified coverage.) The provision will affect approximately 45 million Americans who are without health insurance. Arthritis can be a debilitating disease, resulting in the inability to hold a full-time job. This can mean the loss of health insurance.  

Those who can join the temporary pool have been uninsured for six months, are not eligible for Medicaid and not on Medicare. They also are not receiving employer-sponsored insurance.  

“It means that people, including those with arthritis, who have been unable to get health care coverage in any other way, will be able to get health coverage this year,” explains Bill Erwin, communications director for the Alliance for Health Reform based in Washington, D.C.  


 

He notes that premiums for beneficiaries in the pool are projected to be lower than premiums in existing state high-risk pools. Annual out-of-pocket costs are capped at $5,950 for individuals and $11,900 for families.  

This provision has major implications for those with arthritis, adds Joel J. Ohman, an independent certified financial planner from Health Insurance Providers.

“If they are on a plan and want to switch, the precondition will at best allow them to be approved. Their treatments for arthritis either will not covered right away or at all,” Ohman says.

Authorizing the Food and Drug Administration to approve generic versions of biologic drugs

This provision sets the course to allow for the manufacturing of cheaper, generic biologic medications.  

Generic biologics, also called follow-on biologics, refer to certain products produced through biotechnology processes that are essentially “copies” of the original product. While current biological therapies have proven effective at reducing the pain and inhibiting the progression of joint damage for those with chronic and debilitating disease, because of their cost and availability access to these therapies either is limited or non-existent.     

This provision also grants biologics manufacturers 12 years of exclusive use before generics can be developed.  

The Arthritis Foundation has strongly advocated for follow-on biologics legislation that would allow the Food and Drug Administration (FDA) to set up a regulatory pathway to allow manufacturers to make generic biologics.

“The innovation of biological therapies has transformed the treatment and care of many different forms of arthritis, including rheumatoid arthritis, ankylosing spondylitis, psoriatic arthritis, and juvenile arthritis,” according to an April 2009 policy statement on follow-on biologics from the Arthritis Foundation. “The current biological therapies profoundly reduce the pain and inhibit the progression of joint damage for these chronic and debilitating diseases, which affect an estimated 4 million people in the U.S.”

Creating a process for reviewing increases in health plan premiums and require plans to justify increases.

One of the most immediate provisions of the law should empower consumers who don’t have recourse when their premiums begin to skyrocket. And statistics indicate it is a growing problem.  

According to a recent survey from the Kaiser Family Foundation and Health Research & Education Trust, the typical annual health insurance premium for an American family is $15,073 and the average rate for an individual is $5,429 annually.


 

In the past decade, premiums have increased 113 percent, while workers' wages and inflation have only risen 34 percent and 27 percent, respectively. High premiums make health insurance unaffordable for many who have it.  

This provision also requires states to report on trends in premium increases and recommend whether certain plans should be excluded from the upcoming exchanges based on unjustified premium increases.

Also this year, health plans are required to report the proportion of premium dollars spent on clinical services, quality and other costs.

Other provisions that have already taken effect include:

• The establishment of an website to help residents identify health coverage options and development of a standard format for presenting information on coverage options.

• Creation of a grant program to support the delivery of evidence-based and community-based prevention and wellness services aimed at reducing chronic disease rates. (Both osteoarthritis and rheumatoid arthritis are chronic conditions.)

• The establishment of the National Prevention, Health Promotion and Public Health Council to coordinate federal prevention, wellness and public health activities. On June 13, 2012, U.S. Surgeon General Regina Benjamin and council members announced the release of the plan, which can be downloaded here.