Why the annual health plan reboot is so troubling

For most Texans, the new year offers a time to celebrate, realign priorities and renew hope. For others, however, the new year is anything but a celebration, as it marks the reboot of their health insurance benefits.

The clock resets on annual health insurance premiums, which averaged $22,463 for family coverage in 2022, up 43 percent since 2012 and projected to rise another 5.6 percent this year.

It also means the reset of annual cost-sharing requirements. Health insurance deductibles or out-of-pocket maximum amounts can be as high as $9,100 for individuals and $18,200 for families. Deductibles have skyrocketed 111 percent since 2010, rising twice as fast as wages and far outpacing inflation. Even if someone spent enough out of pocket to meet their deductible or other cost-sharing requirements in 2022, now they must start over.

Beyond the financial obligations may be surprises buried in the fine print.

Most people don't read health plan legalese; however, those living with rare or chronic conditions must search out the details at the start of each new year, trying to recognize subtle health plan changes that, ironically, may pose risks to their health.

As the mother of an 11-year-old boy whose rare genetic disorder was supposed to end his life in infancy, I know the importance of access to consistent, cutting-edge care and treatments. My son is the reason I have become a health policy advocate who always reads the fine print.

At the start of the new plan year, Texans may discover their specialist or hospital has been bumped from the preferred network. Or that the insurer has moved their covered medication to a higher cost-sharing tier, recategorized it as a non-essential health benefit, or added new hoops to jump through before being allowed to continue taking it. These changes, made for non-medical reasons, usually come as a surprise to patients and their doctors, leading to higher out-of-pocket costs in the immediate term, as well as longer-term costs due to more doctor's visits, trips to the ER, hospitalizations and irreversible disease progression.

Even if patients can navigate the health plan's front-end hoops and hurdles, they may get tripped up by other back-end barriers buried in the fine print, such as "copay accumulator adjustment programs."

Some 60 percent of Texans grapple with chronic or difficult conditions that can exact a high emotional, physical and financial toll. Many turn to copay assistance programs to help them meet their insurer's rising cost-sharing requirements, with pharmaceutical manufacturers or nonprofit foundations offering copay assistance to help patients reduce what they pay at the pharmacy counter. Traditionally, health plans have collected the copay assistance funds and counted those dollars toward the patient's deductible or cost-sharing requirements.

However, nine out of 10 health insurers in Texas have recently added Copay Accumulator Adjustment Programs to their plans, preventing patients from counting copay assistance toward their annual deductible or cost-sharing requirements. When patients reach their limit, they are hit with a "surprise bill" where they learn they must still pay their full deductible and are no closer to reaching their annual out-of-pocket requirements -- even though the insurer has collected their copay assistance dollars.

Here is the reality. Though Texans are paying ever-higher insurance premiums and out-of-pocket costs, health plans are finding ways to "save money" by covering less or doubling up on what they collect through schemes like copay accumulators. It's a boon for shareholders but a bust for patients.

Perhaps this new year will afford the opportunity for the Texas Legislature to revisit our state's health insurance policies and reprioritize the lives of patients and their families.

Davis is the founding president of Texas Rare Alliance.