Insurance Dept. Orders Coverage for AIDS Drug

The state Department of Insurance on Friday ordered companies under its jurisdiction to cover use of the recently approved anti-AIDS drug AZT by all patients with prescription drug benefits.

The directive will immediately expand the availability of the expensive medication, which is already covered by the Medi-Cal program and many insurance plans. A year’s supply of the medicine costs $10,000 to $12,000.

The department said it was reacting to word that some insurance companies are not planning to pay for the drug.

But the order falls short of guaranteeing coverage of AZT for all AIDS patients with health insurance because some lack drug benefits and because others, including members of health maintenance organizations, fall under the jurisdiction of a different state agency.

Spokesmen for two large private health insurers, Prudential and Pacific Mutual, said the notice from the Department of Insurance came as no surprise to them. Both spokesmen said their companies have covered AZT since the U.S. Food and Drug Administration approved marketing the drug last month. A spokesperson for Blue Cross of California said more than 95% of its policyholders are already covered.

AZT, or azidothymidine, has been shown to prolong the lives of some acquired immune deficiency syndrome patients, particularly those who have developed a lung infection called pneumocystis.

‘Hiding Behind Each Other’

In an interview, Roxani Gillespie, the state insurance commissioner, said some private insurers, whom she declined to name, seemed to be “hiding behind each other” to avoid paying for AZT by claiming that the drug is still experimental.

“We want to make sure we get the situation resolved,” Gillespie said. “This drug has been proved to prolong the life of these patients. Somebody had to come up front and say this is important and not experimental.”

The insurance commissioner also issued a plea to all insurers who do not cover prescription drugs under their major medical programs “to consider allowing the AZT benefits for humanitarian reasons.”

The overall impact of the Insurance Department’s ruling is uncertain because another state agency, the Department of Corporations, regulates health-care plans, including health maintenance organizations and Blue Shield of California. About 25% of the state’s population is covered by health maintenance organizations.

Richard Camilli, an assistant commissioner in the Department of Corporations in charge of health-care plans, said he “expected” that AZT would be covered by these health-care plans but that no specific effort had been made to find out if this is the case.

“If AZT is the indicated treatment based on the medical advice of the doctor, the plan should provide it,” Camilli said. “Anybody running into trouble with that should come right to us.”

A spokesperson for Kaiser Permanente, the state’s largest health maintenance organization, said 60% of its 3.5 million members have drug benefits and therefore are covered for AZT. A spokesman for Blue Shield of California said about 80% of its clients are covered.