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In an unusual funding arrangement, California is paying private health plans hundreds of millions of dollars in supplemental payments to cover the high price of hepatitis C drugs for patients in Medi-Cal managed care plans.
While Medi-Cal is California’s program of health insurance for people who are low income, nearly 80 percent of beneficiaries are in managed care plans run by private health insurance companies. The companies are paid a flat rate per member each month to cover all health care needs.
The funding agreement was reached after health plans raised “alarm” over the high cost of new hepatitis C drugs and plans had to dig into reserves because of the drugs’ cost, says Charles Bacchi, president of the California Association of Health Plans, an industry trade group.
“Dollars that were intended for a wide array of medical services started being gobbled up by just one drug,” Bacchi said.
A spokesperson for the state’s Department of Health Care Services says it’s the first time the state has paid health plans a supplemental money just to cover the high cost of a drug. Specifically, Sovaldi, a hepatitis C drug retailing at $1,000 per pill, has sent treatment prices soaring. The drug is made by Gilead Sciences in Foster City.