The problem of expensive health care may soon cut into people who are fully insured, as health insurance companies adopt a new pricing system, sending focused stocks and exchange traded funds (ETFs) into more turbulence. 

The new pricing system focuses prescriptions for expensive drugs used for either saving lives or slowing the progress of serious diseases. Patients may now have to shell out hundreds or thousands of dollars despite the fact that they have insurance.

Gina Kolata for The New York Times says that with the new pricing system, insurers have abandoned the traditional arrangement where patients pay a fixed amount such as $10 or $20, regardless of the drug’s actual cost. Patients are responsible for a percentage of the cost of certain high-priced drugs, around 20-33%, in some cases equal to thousands of dollars a month.

The plan, known as "Tier 4," also affects drugs in which there is no generic equivalent, so patients have no alternatives. Insurers argue that this keeps the premiums lower for everyone. Unfortunately, this is an erosion of the very basis of insurance.

Pharmceutical HOLDRs (PPH) may feel a recovery from this new system. Health Care Select Sector SPDR (XLV) could also feel the nausea lift. Year-to-date, PPH is up 3.4%, while XLV is down 10%.

XShares also has its line of HealthShares, which invest in companies involved in various aspects of the healthcare industry. HealthShares Autoimmune-Inflammation (HHA) invests in companies involved in research, clinical development and/or the commercialization of therapeutic agents for the treatment of such diseases as multiple sclerosis and rheumatoid arthritis. Year-to-date, the fund is down 12.6%.

Tags: Biotechnology, Health Care, KOL, Sector ETFs