Blue Cross Blue Shield NC is discriminating against people with HIV, advocates claim

The state’s largest health insurance provider is discriminating against people with HIV by forcing them to pay more for their drugs, two advocacy groups claim in a complaint filed with the federal department of health and the North Carolina Insurance Department.

Blue Cross Blue Shield of North Carolina placed nearly all standard HIV medications in drug tiers with the highest out-of-pocket costs in its 2022 and 2023 formularies, the groups say.

HIV medications on lower tiers either can’t be used on their own or are no longer recommended, according to an analysis from the HIV+Hepatitis Policy Institute and North Carolina AIDS Action Network.

Advocates say the insurance giant is intentionally making these medications unaffordable to dissuade people from enrolling in their plans if they have HIV, which can be a costly condition for insurers.

Carl Schmid, executive director of the HIV+Hepatitis Policy Institute, said he believes the insurance company is violating health discrimination laws and federal regulations that say placing the majority of drugs for a medical condition on a high-cost tier is “presumptively discriminatory”.

A spokesperson for Blue Cross NC said the company is working to respond to the complaint and will continue to collaborate with regulators to comply with the law.

“We take this very seriously and stand against discrimination of any kind,” the spokesperson said in a statement. The spokesperson said the methodology used to determine drug tiers is the same regardless of the condition.

This practice is not unique to Blue Cross Blue Shield NC.

A 2015 study found that a quarter of insurance companies used discriminatory drug tiering for HIV medications, which cost people with the condition several thousands more dollars per year than those enrolled in other plans.

But at least in North Carolina, Blue Cross has most aggressively practiced “adverse tiering,” said Allison Rice, an emeritus law professor at Duke who puts out annual reports on HIV insurance coverage in the state.

“Absolutely they’re the worst,” she said. “There is no other company that has all the HIV drugs essentially at 50% coinsurance.”

Huge out-of-pocket expenses

Once a year, insurance companies release a long list of prescription drugs they cover along with corresponding “drug tiers.” Generally, the higher the tier, the more patients should expect to pay out-of-pocket for the medication.

Insurers often place pricey, name-brand drugs in the highest tiers to encourage patients to opt for cheaper generic medications.

However, Schmid noticed that BCBS NC put not only name-brand HIV medications in its top tiers but also several inexpensive generic medications.

For example, the generic version of Truvada — used for HIV treatment and prevention — is in the second-highest tier despite costing about $1 per pill at some pharmacies.

Rice said it’s hard to interpret the BCBS NC’s formulary as anything other than an attempt to get rid of HIV patients.

“You’re putting everything up there for this particular disease, even stuff that is generic,” she said. “What other reason would you have to do that? What is the nondiscriminatory reason?”

The insurance company has placed almost all HIV drugs in top tiers since 2016, Rice said. However, in recent years, Blue Cross has asked patients to pay more for medications in those tiers, according to Rice’s research.

For many years, patients enrolled in most Blue Cross plans paid about 25% of the price of a top-tier medication. In 2021, cost-sharing shot up to 50%.

While other NC insurers have similar cost-sharing policies in their highest tiers, Rice said most other insurers placed their HIV drugs on lower tiers.

For people with HIV who take daily pills to manage symptoms and prevent transmission, 50% coinsurance could amount to thousands of dollars a month, Schmid said.

Rice said this cost burden would mostly fall on middle-class North Carolinians who do not qualify for federal and state programs that cover the cost of HIV medications. Schmid said he is worried this pricing practice will widen health disparities, given that Black people make up 58% of new HIV diagnoses in the state.

“The formulary design creates arbitrary financial and administrative barriers to HIV treatment…and will undoubtedly have negative individual and public health consequences,” the letter to regulators read.

Teddy Rosenbluth covers science and healthcare for The News & Observer in a position funded by Duke Health and the Burroughs Wellcome Fund. The N&O maintains full editorial control of the work.