GovernmentExecutive.com

Hundreds of thousands of federal employees and retirees have selected health plans where they could end up paying hefty prices for specialty prescription drugs, according to new findings from the Government Accountability Office.

The study came after Sen. Edward Kennedy, D-Mass., asked GAO to look into reports that many Federal Employees Health Benefits Program participants spend thousands of dollars annually on drugs to treat chronic or life-threatening illnesses because they are enrolled in co-insurance plans requiring them to cover a percentage of the drugs' costs rather than a set amount.

Specialty drugs often have unique requirements for storage, patient education and administration -- and they have few competitors or generic alternatives - so the cost can range from $1,200 to $40,000 for a 30-day supply, according to GAO.

"Depending on the plan, these varying requirements can result in a wide range of costs for enrollees for the same drug," the report stated. "For example, we estimate that an enrollee taking the multiple sclerosis drug Betaseron for a year could pay $420 if subject to a co-payment, $2,400 if subject to a co-insurance with a per prescription dollar maximum, or $6,000 if subject to a co-insurance with an annual out-of-pocket maximum."

According to the report, 86 percent of FEHBP enrollees -- 6.6 million people -- have co-payments that limit their costs to $55 on average for a 30-day supply of specialty drugs. But about 11 percent, or 900,000 enrollees, have co-insurance as part of their plan for more than one of 18 specialty drugs. Those enrollees pay, on average, nearly 31 percent of the drugs' cost. About 700,000 have plans that require coinsurance for all 18 of the specialty drugs reviewed. The remaining 3 percent have specialty drugs covered under medical benefits, because they are administered in a therapeutic setting, such as a doctor's office.

GAO also found that cost limits for those with co-insurance vary, depending on the plan. Sixty-three percent of those with co-insurance for more than one of the specialty drugs have a per prescription maximum ranging from $50 to $400 for a 30-day supply. Another 35 percent of the enrollees have an annual out-of-pocket maximum between $1,500 and $7,000. The remaining 2 percent have plans where specialty drugs are not subject to cost-sharing limits, with some exceptions.

John Dicken, GAO's health care director and author of the report, said he did not know how many of the 900,000 enrollees subject to co-insurance are federal workers, and how many are retirees or family members of employees. A 2008 Government Executive analysis found that 87,242 federal employees were subject to co-insurance payments for specialty drugs. The analysis did not include retirees.

Last week Office of Personnel Management Director John Berry said one of his long-term goals is to get medical costs under control for the FEHBP.