The lawsuit seeks to recoup more than $500 million in relief for student borrowers who were coaxed into taking education loan
A US federal lawsuit filed against Corinthian Colleges alleges that the for-profit education company used deceptive advertising to lure tens of thousands of students into taking out private loans, and seeks to recoup more than $500 million in relief for those borrowers.
“For too many students, Corinthian has turned the American dream of higher education into an ongoing nightmare of debt and despair,” said Richard Corday, director of the Consumer Financial Protection Bureau, which brought the complaint.
The lawsuit claims that Corinthian coaxed students — many from low-income families — into taking out loans for costly tuition expenses by falsely advertising job placement rates and career services that it couldn’t deliver. The company then engaged in a debt collection scheme that forced students to pay back those loans while still in school, the lawsuit alleges.
Last fall, California’s attorney general filed a similar lawsuit against the California-based company, which enrolls about 75,000 students nationwide under the names Everest, Heald, and WyoTech Colleges.
By charging higher prices for generic drugs that treat certain illness, health insurers may be violating the spirit of the Affordable Care Act, which bans discrimination against those with pre-existing conditions
This story was co-published with The New York Times' The Upshot.
Health insurance companies are no longer allowed to turn away patients because of their pre-existing conditions or charge them more because of those conditions. But some health policy experts say insurers may be doing so in a more subtle way: by forcing people with a variety of illnesses — including Parkinson's disease, diabetes and epilepsy — to pay more for their drugs.
Insurers have long tried to steer their members away from more expensive brand name drugs, labeling them as "non-preferred" and charging higher co-payments. But according to an editorial published Wednesday in the American Journal of Managed Care, several prominent health plans have taken it a step further, applying that same concept even to generic drugs.
The Affordable Care Act bans insurance companies from discriminating against patients with health problems, but that hasn't stopped them from seeking new and creative ways to shift costs to consumers. In the process, the plans effectively may be rendering a variety of ailments "non-preferred," according to the editorial.
"It is sometimes argued that patients should have 'skin in the game' to motivate them to become more prudent consumers," the editorial says. "One must ask, however, what sort of consumer behavior is encouraged when all generic medicines for particular diseases are 'non-preferred' and subject to higher co-pays."
I recently wrote about the confusion I faced with my infant son's generic asthma and allergy medication, which switched cost tiers from one month to the next. Until then, I hadn't known that my plan charged two different prices for generic drugs. If your health insurer does not use such a structure, odds are that it will before long.
The editorial comes several months after two advocacy groups filed a complaint with the Office of Civil Rights of the United States Department of Health and Human Services claiming that several Florida health plans sold in the Affordable Care Act marketplace discriminated against H.I.V. patients by charging them more for drugs.
Specifically, the complaint contended that the plans placed all of their H.I.V.
medications, including generics, in their highest of five cost tiers, meaning that patients had to pay 40 percent of the cost after paying a deductible. The complaint is pending.
"It seems that the plans are trying to find this wiggle room to design their benefits to prevent people who have high health needs from enrolling," said Wayne Turner, a staff lawyer at the National Health Law Program, which filed the complaint alongside the AIDS Institute of Tampa, Fla.
Turner said he feared a "race to the bottom," in which plans don't want to be seen as the most attractive for sick patients. "Plans do not want that reputation."
In July, more than 300 patient groups, covering a range of diseases, wrote to Sylvia Mathews Burwell, the secretary of health and human services, saying they were worried that health plans were trying to skirt the spirit of the law, including how they handled co-pays for drugs.
Generics, which come to the market after a name-brand drug loses its patent protection, used to have one low price in many insurance plans, typically $5 or $10. But as their prices have increased, sometimes sharply, many insurers have split the drugs into two cost groupings, as they have long done with name-brand drugs. "Non-preferred" generic drugs have higher co-pays, though they are still cheaper than brand-name drugs.
With brand names, there's usually at least one preferred option in each disease category.
Not so for generics, the authors of the editorial found.
One of the authors, Gerry Oster, a vice president at the consulting firm Policy Analysis, said he stumbled upon the issue much as I did. He went to his pharmacy to pick up a medication he had been taking for a couple of years. The prior month it cost him $5, but this time it was $20.
As he looked into it, he came to the conclusion that this phenomenon was unknown even to health policy experts. "It's completely stealth," he said.
In some cases, the difference in price between a preferred and non-preferred generic drug is a few dollars per prescription. In others, the difference in co-pay is $10, $15 or more.
Even small differences in price can make a difference, though, the authors said. Previous research has found that consumers are less likely to take drugs that cost more out of pocket. "There's very strong evidence for quite some time that even a $1 difference in out-of-pocket expenditures changes Americans' behavior" regarding their use of medical services, said the other co-author, Dr. A. Mark Fendrick, a physician and director of the University of Michigan Center for Value-Based Insurance Design.
Fendrick said the strategy also ran counter to efforts by insurance companies to tie physicians' pay to their patients' outcomes. "I am benchmarked on what my diabetic patients' blood sugar control is," he said. "I am benchmarked on whether my patients' hypertension or angina" is under control, he said. Charging more for generic drugs to treat these conditions "flies directly in the face of a national movement to move from volume to value."
If there are no cheaper drugs offered, patients might just skip taking their pills, Fendrick said.
The authors reviewed the drug lists, called formularies, of six prescription drugs plans: Harvard Pilgrim Health Care in Massachusetts; Blue Cross Blue Shield of Michigan; Blue Cross and Blue Shield of Illinois; Geisinger Health Plan in Pennsylvania; Aetna; and Premera Blue Cross Blue Shield of Alaska. They wanted to see how each plan handled expert-recommended generic drugs for 10 conditions.
The conditions are not all high cost like H.I.V. and Parkinson's. They also include migraine headaches, community acquired pneumonia and high blood pressure.
Premera and Aetna had preferred generic drugs for each of the 10 conditions the authors examined. Harvard Pilgrim, a nonprofit often considered among the nation's best, did not have a lower-cost generic in any of the 10 categories.
Four of the six plans had no preferred generic antiretroviral medication for patients with H.I.V.
In a statement to ProPublica, Harvard Pilgrim said it charges more for some generics because they are more expensive. The cheapest generics carry a $5 co-payment for a 30-day supply. More expensive generics range from $10 to $25, or 20 percent of the cost for a 30-day supply. The health plan said its members pay less for their medications than the industry average.
Blue Cross and Blue Shield of Illinois said that its preferred generics had no co-payment at all, and that non-preferred generics cost $10. "We historically only had one tier of generic drugs at a $10 co-pay," the spokeswoman Mary Ann Schultz said in an email.
The Blue Cross Blue Shield of Michigan spokeswoman Helen Stojic said the editorial looked only at its drug plan for Medicare patients, which the government closely regulates. Under Medicare, patients can appeal a drug's tier and seek to pay a lower co-payment, she said.
Geisinger did not respond to questions.
Health plans that participate in Medicare's prescription drug program, known as Part D, have been moving rapidly to create two tiers of generic drugs. This year, about three-quarters of plans had them, according to an article co-written by Jack Hoadley, a health policy analyst at Georgetown University's Health Policy Institute. The practical effect of such arrangements probably varies based on the difference in cost, he said.
Dan Mendelson, chief executive of Avalere Health, a consulting firm, has studied the way in which health insurers structure their benefits. He said the increasing number of drug tiers in some plans was confusing for patients.
"Consumers often don't understand which drugs are where," he said. "They don't understand the purpose of tiering. They just get to the pharmacy counter and it gets done to them."
At least five banks are headless, the FM has little time to spare for the banking industry, but the finance ministry is only focussed on the PM’s pet project JanDhan Yojana
The entire banking industry, led by the finance secretary, is so focussed on enrolling people into the JanDhan Yojana that there is no time for appointments to several top nationalised banks, say agitated senior bankers. While as many as four nationalised banks remain headless and two more will join their numbers, all we have is talk of more accountability and better appraisal from the Reserve Bank of India.
At a seminar earlier this week, RBI Governor Raghuram Rajan said that there will be stricter evaluation of the role of senior bankers before appointing them to the post of chairman and managing (CMD) after Syndicate Bank chairman S K Jain was arrested for corruption.
A committee headed by the RBI governor, which includes finance ministry bureaucrats, has been set up to select candidates. But senior bankers complain that that there is no hurry at any level to act even though non-performing assets (NPAs) are sky-high and there is a need for dynamic leadership and tough action at each of the many government banks.
Now consider this. If the arrest of the Syndicate Bank chairman was a trigger for better selection, why is the post of CMD at United Bank of India (UBI) lying vacant, even after Mrs Archana Bhargava's extremely controversial exit in February, which is seven months ago. That she was allowed to leave without any action against her only hints at dubious appointment considerations. Bank of Baroda (BOB) is headless after Mr S S Mundra moved to the RBI. Syndicate Bank remains headless at a time when it needs a clean and dynamic chairman. Indian Overseas Bank has no chairman either.
At the end of September, R K Dubey of Canara Bank and S L Bansal of Oriental Bank of Commerce will also complete their terms while the Punjab National Bank (PNB) chairman completes his term on 31st October and the Vijaya Bank chairman’s post falls vacant a little later.
While the top posts are vacant, things are no better at the Executive Director (EDs) level.
At least four or five positions are already vacant and every one of the current crop of EDs across all 20 nationalised banks are full engaged in doing only one thing – lobbying for the post of CMD by meeting every politician or politically-connected person who they think will carry clout with this government. And those a level below are lobbying hectically to become EDs or to get transfers to better banks. It is such lobbying that ends in quid-pro-quo deals, later leading to bad loans.
A senior banker says that the JanDhan Yojana is seen as the fastest way to attract the attention of the Finance Secretary and hopefully the Prime Minister (PM) and Finance Minister (FM). So the entire industry is focussed on furious enrolments rather than sensible deployment of funds or effective recovery of bad loans.
It is well known that industry houses have always lobbied for appointments to banks and regulatory bodies in exchange for big favours in the form of fresh loans or write offs. This has been going on for at least three decades. Nothing much seems to have changed.
A disgusted senior banker says, “this government has no time for appointments or banking reforms or for implementing the P J Nayak committee report on making the appointment process more transparent. The only focus of government JanDhan”. All bankers have been told that they will not be permitted to go on foreign tours until JanDhan targets are met.
Even proposals to raise capital are in a suspended animation. Finance Minister Arun Jaitley is already overburdened with three major ministries (finance, defence and corporate affairs) and has also been out of action when he underwent a bariatric surgery.
Meanwhile, the RBI officials are more concerned with the internal re-organisation and lateral appointments (hugely resented by all senior central bankers at the RBI) to worry about vacancies at nationalised banks.
Bankers also say that despite Mr Narendra Modi’s promise of being a chowkidar of public funds, it is business as usual when it comes to shady practices. Interestingly, this paralysis in RBI’s and MoF’s decision-making does not seem to affect private banks. The government has acted swiftly to allow private bank CEOs to continue in office until the age of 70, almost as a birthday gift to for two powerful CEOs who are soon to hit the previous limit of 65.
So what will it take for the new government to give focussed attention to the finance ministry? Another big scandal?