Chronically Ill Pay More For Marketplace Plans Than Employer Coverage
Chronically ill people enrolled in individual health plans sold on the Affordable Care Act insurance exchanges pay on average twice as much out-of-pocket for prescription drugs each year than people covered through their workplace, according to a study published Monday in the Health Affairs journal.
Patients with at least one chronic condition such as diabetes or asthma pay on average $621 out–of-pocket for prescription costs on the popular, mid-priced silver exchange plans compared to $304 for those with employer coverage, researchers at Emory University in Atlanta found.
The findings draw more attention to rising drug costs, now a hot button topic in the run-up to the 2016 presidential campaign.
An important reason why people on exchange plans pay more is they often must meet a deductible before their insurance coverage kicks in, the study said. Employer-sponsored plans usually exempt prescription drugs from their deductibles, but they still may have stiff co-pays.
As a result, the study said, patients in the most-popular silver plans pay 46 percent of their total drug spending on average, compared to 20 percent for patients in typical employer-sponsored plans.
Kenneth Thorpe, the study’s lead author and chair of the health policy department at Emory University, said the report underscores the need for people to consider more than the premium when they compare health plans on an exchange.
Health plans have been shifting more drug costs to consumers in part to hold down monthly premiums, he said. But studies have shown most people choose their health plan because it has the lowest premium.
The risk of higher cost sharing for people with a chronic disease, Thorpe said, is that they won’t fill or renew prescriptions, leaving them sicker and in need of costly hospital care.
Insurers are required by law to offer many proven preventive services such as mammograms and colonoscopies without any cost sharing. The same should apply to prescription drugs known to prevent illnesses, such as Metformin for diabetics, Thorpe said.
Health plans are shortsighted in saving money on drug costs by shifting expenses to consumers, he said. “It’s penny wise and pound foolish,” Thorpe added.
Larry Levitt, a senior vice president of the Kaiser Family Foundation, said most people buying exchange plans get subsidies to help reduce their out-of-pocket spending.
Levitt also said comparing employer-sponsored plans to those sold on exchanges has limited value because employer plans typically offer more generous benefits than the silver plans in the marketplaces, and employer plans also have higher premiums.
Some insurance exchanges this fall plan to offer software that allows comparisons of health plans’ costs based on consumers’ health status. The federal government has offered that ability for private Medicare drug and health plans for over a decade.
Cori Uccello, a senior health fellow at the American Academy of Actuaries, said health plans are shifting more costs to policyholders to manage their increased drug spending, which is rising faster than overall medical spending.
Mila Kofman, executive director of the Washington, D.C., health exchange, said officials there have been watching to make sure plans are not discriminating against sicker consumers — such as those with HIV– by putting all their drugs in the highest tier for out-of-pocket spending. Four Florida insurers agreed to lower their rates for HIV drugs after AIDS activists filed lawsuits last year accusing them of discrimination by making those drugs too expensive.
Kaiser Health News is an editorially independent program of the Kaiser Family Foundation.