A new study has found that high-deductible plans and increased use of coinsurance are exposing health plan enrollees to higher and higher pharmaceutical costs.
One of the big problems for many enrollees in high-deductible plans is that their outlays for drugs may not count towards their health plan deductibles and, if they are enrolled in separate pharmaceutical plans, they may have to pay the full list price until they meet their drug deductible, according to the “2019 Kaiser Family Foundation Employer Health Benefits Survey.”
The report warns of a growing crisis for American workers, more and more of whom are struggling with their health expenditures, be they premiums, deductibles, copays and/or coinsurance.
Workers in small firms face relatively high deductibles for single coverage and many also are saddled with significant premiums if they choose family coverage, according to the study.
The cost of group health insurance is growing at about 4% to 5% a year, reaching $7,188 for single coverage in 2019 and $20,576 for family coverage.
Workers in small firms on average contribute 16% of the premium for single coverage, compared with workers at large firms (19%), according to the report. But small-firm employees contribute 40% on average for family coverage, compared to 26% for staff at larger firms.
That said, 35% of covered workers in small firms are in a plan where they must contribute more than one-half of the premium for family coverage, compared to 6% of covered workers in large firms.
But premium contributions are only part of the story. Eighty-two percent of covered workers have a general annual deductible for single coverage that must be met before most services are paid for by the plan, and that average deductible amount is $1,655. But, the average annual deductible among covered workers with a deductible has increased 36% over the last five years, and by 100% over the
last 10 years.
With all this as a backdrop, the cost of prescription drugs is one of the largest challenges facing group health plan enrollees, especially those who are enrolled in high-deductible health plans, whose out-of-pocket expenses for pharmaceuticals can be especially burdensome. It is the hidden cost-driver in the system.
The Kaiser survey found that about 90% of covered workers are enrolled in plans where the health plan deductible must be met before prescription drugs are covered. But, this number has been shrinking as group coverage pricing increases and employers shift more of the cost burden to employees.
There are a few ways that employees are taking on a significant load with their drug expenditures:
Even worse, patients pay the entire negotiated price when they are within a deductible and do not enjoy the benefits of rebates that the PBM may have negotiated with drug makers. Patients with these benefit designs do not benefit from rebates, though major brand-name drug makers sell their products at half of the list prices.
The disappearance of two- and three-tier benefit designs have made out-of-pocket expenses especially high for specialty drugs. Plans place therapies for such chronic, complex illnesses as cancer, rheumatoid arthritis, multiple sclerosis and HIV on the fourth and specialty tiers of benefit plan, for which the enrollee has to pay a larger share.