Rx Expenses Double for Health Insurance Exchange Patients

May 20, 2014

by Amanda Conschafter, Blog Editor

Americans covered by a health insurance exchange plan may be paying out for prescription medications in a big way, a new study finds. The report, issued by Milliman, Inc., says that out-of-pocket expenses for patients on a Silver plan (the exchanges’ most popular option) more than double the amount required by the typical employer-sponsored plan. Particularly for patients with chronic diseases who regularly rely on prescription medications, high costs can discourage adherence to the treatment plans prescribed by their doctors.

The substantial cost difference likely stems from Silver plans’ combined deductible approach. Rather than establishing two separate deductibles – one for care, one for prescription drugs – these plans lump the two together, requiring patients to pay 100 percent of both care and medication expenses until they meet their annual deductible. As the report notes, Silver plans combine deductibles 46 percent of the time, while traditional employer-sponsored plans do so only 12 percent of the time.

The study further notes, combined deductibles do not compute in the patient’s favor. “Given the high frequency and low severity nature of pharmacy claims and the fact that a high percentage of members will have at least one pharmacy claim in a given year, combined deductible plans disproportionately impose a much higher member cost sharing burden for pharmacy benefits relative to other types of benefits.”

Deterred by higher out-of-pocket costs, patients may opt not to fill, refill or take their medications as prescribed. Nonadherence can incur higher costs in the long term, as expenses are driven up by unexpected hospitalization and emergency care procedures. Patient health likewise suffers.

PhRMA President and CEO John Castellani, whose organization sponsored the study, says this isn’t what Americans signed up for. “Americans participating in the Exchanges were promised coverage comparable to employer plans and yet the reality is that many new plans are failing to provide an appropriate level of access to quality, affordable health care,” Castellani noted. The study also found higher payments for hospital expenses (122 percent that of employer-sponsored plans) and professional services (118 percent that of employer-sponsored plans).

Though most exchange patients have already elected their coverage for 2014, enrollment reopens on November 15, 2014. Issues of cost and access will likely play a key role in patients’ decision making then and in the intervening time, as the national conversation continues on the Affordable Care Act and accessible health care for all Americans.

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