Groups representing people with hemophilia filed a civil rights complaint Tuesday against health insurer Wellmark for leaving the Obamacare exchange in Iowa to avoid paying the medical bills of patients with the disorder, including one patient whose medical bills amounted to $1 million a month.
The complaint, filed with the Office for Civil Rights at the Department of Health and Human Services, says Wellmark violated Obamacare by preventing people with hemophilia from accessing coverage, first by only selling plans in certain counties in Iowa and then by declaring it wouldn't sell these plans in the entire state for 2018.
The National Hemophilia Foundation, the Hemophilia Federation of America and Hemophilia of Iowa, all of whom filed the complaint, are asking the agency to "take all necessary steps to remedy Wellmark's unlawful conduct."
Michelle Rice, spokeswoman for the National Hemophilia Foundation, said she isn't sure what the remedies would be, noting that it was unlikely that the federal government would make Wellmark return to the exchange. Under Obamacare, participation in the exchanges is voluntary.
The groups pointed out that before Obamacare, it was common for insurers to deny coverage to people with pre-existing illnesses and to set annual and lifetime caps on how much insurers would pay for medical care. The exchanges allow people who don't have coverage through a job to buy tax-subsidized plans. Withdrawing from selling such plans, the groups suggested, was a way that insurers could avoid paying for pre-existing illnesses.
"We want to bring more to this conversation and see whether insurers are finding ways to get around what is required of them to provide coverage on the exchanges," Rice said. "Are they structuring their plans in a way that might discourage people from applying, or carving out certain areas based on their experience? ... If I lived in Iowa the concern would be, 'Am I going to be able to get any kind of coverage if I'm someone with a disability?'"
Another portion of the complaint has clearer remedies by law and could result in Wellmark incurring fines it would pay to the federal government. The second part of the complaint accused Wellmark, which is part of Blue Cross Blue Shield, of violating medical privacy laws by publicly disclosing information about the $1 million-a-month patient, because they identified him as a 17-year-old male. His illness likely requires weekly or daily infusions to treat the life-threatening disorder, which prevents blood from clotting and can lead to internal bleeding, joint damage or infections.
Wellmark, which plans to exit the Obamacare exchange in Iowa for 2018, cited the example of the patient during a recent presentation in Des Moines to demonstrate an example of rising medical costs. The company, which has lost $90 million through the exchange, raised premiums by between 38 percent and 43 percent for this year, though most customers also received tax subsidies from the federal government that cushioned the effect of those increases. Treatment for people with hemophilia typically costs $250,000 to $1 million a year, and it's not clear if the patient, who has not been named, has other medical conditions.
Rice explained that the $1 million-a month-pricetag likely represents charges, and not what the insurer actually paid. She also said that spending that much on care for someone with hemophilia is unusual and likely means the patient "had a really bad year" that may include an injury.
Iowa's case illustrates some of the underlying troubles Obamacare's individual insurance exchange has had in finding enough young, healthy people to enroll in plans so that more costly patients with complicated medical conditions can receive adequate coverage for their care. It also reveals the difficulties that arise from guaranteeing coverage for pre-existing illnesses while trying to ensure affordable plans for other customers, even as medical costs escalate.
Minnesota-based Medica is the only insurer that has committed to selling plans on the exchange in Iowa, and it has filed premium rates that are 45 percent higher than what customers paid this year. Most customers who buy coverage on the exchange receive higher premiums from the federal government, and don't personally feel the effect of rising premium, but those who make more than $48,000 a year for an individual will see rising costs. Customers also would likely have to change doctors and hospitals who fall under the Medica network if they didn't have these plans in 2017.
Wellmark has said it is open to re-entering the exchange in Iowa if the state approves a short-term solution it has proposed, which would include a federally funded reinsurance program. The program allows insurers to use those funds to pay for more costly patients, without raising premiums on other customers. It's not clear whether the program will be approved because it needs to fulfill several regulatory requirements first.