Silver is the new Black

  • by: |
  • 08/19/2014

Referring to the Model T, Henry Ford famously said, "Any customer can have a car painted any color that he wants so long as it is black.” That worked out fine – until there was competition. Choice is the great emancipator. The same is true when it comes to healthcare – and a lot more important.

When it comes to the Affordable Care Act, patients can access any medicine they need -- as long as it's on the exchange formulary. Sure, the ACA limits the degree to which insurers can charge higher premiums for sicker patients, but ObamaCare plans found a way around these rules: impose higher out-of-pocket costs for all or most specialty drugs. High co-pays effectively remove choice from the system for many patients.

The breakdown of Silver plans (the most popular category) is particularly revealing. In seven classes of drugs for conditions from cancer to bipolar disorder, more than a fifth of these plans require patients to shoulder 40 percent of the medicine’s cost. And 60 percent of Silver plans place all drugs for illnesses like multiple sclerosis and rheumatoid arthritis in the “formulary tier” with the highest level of cost-sharing.

Nearly every Silver plan across the country, in fact, puts at least one class of drug exclusively in the top cost-sharing tier. In effect, this leaves patients with a given condition — whether HIV or Crohn’s disease — without a single affordable treatment option. Silver is the new Black.

And those signing up for Silver plans don’t know what’s going to hit them until they access the healthcare system. It’s time, at least, for that to change. It’s time for exchange transparency.

The American Legislative Exchange Council (a forum for state legislators and private sector members to collaborate on model legislation that members can customize and introduce for debate in their own state legislatures) has drafted the “Exchange Transparency Act.” Whatever your position on ObamaCare (or, if you prefer, the Affordable Care Act), it makes a lot of sense. If there’s nothing to hide then there shouldn’t be a problem.

Exchange Transparency Act


Requires health plans offered through a state-based health exchange to provide specific information in order for consumers to draw meaningful comparisons between plans.

Model Policy

Section 1. Title. This Act shall be known as the “Exchange Transparency Act.”

Section 2. Form of Information Available to the Public and Disclosures Required of Health

Insurers. The following information about each health plan offered for sale to consumers shall be available to consumers on {insert state-based exchange website} in a clear and understandable form for use in comparing plans, plan coverage, and plan premiums:

 (1) The ability to determine whether specific types of specialists are in network and to determine whether a named physician, hospital or other health care provider is in network;

 (2) Any exclusions from coverage and any restrictions on use or quantity of covered items and services in each category of benefits;

 (3) A description of how medications will specifically be included in or excluded from the deductible, including a description of out-of-pocket costs that may not apply to the deductible for a medication;

 (4) The specific dollar amount of any copay or percentage coinsurance for each item or service;

 (5) The ability to determine whether a specific drug is available on formulary, the applicable cost-sharing requirement, whether a specific drug is covered when furnished by a physician or clinic, and any clinical prerequisites or authorization requirements for coverage of a drug;

(6) The process for a patient to obtain reversal of a health plan decision where an item or service prescribed or ordered by the treating physician has been denied; and

(7) An explanation of the amount of coverage for out of network providers or non-covered services, and any rights of appeal that exist when out of network providers or non-covered services are medically necessary.

Section 3. Enforcement. The {insert state insurance commissioner} may impose fines on any entity failing to meet the requirements of this act.

What’s the ETA of the ETA? Stay tuned.


Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.

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