Under Silver health benefit plans with combined deductibles offered via health insurance exchanges, patients may have to pay more than twice as much out of pocket for prescription drugs overall as they would under a typical employer plan, according to a study commissioned by the Pharmaceutical Research and Manufacturers of America (PhRMA).


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PhRMA: Rx out-of-pocket costs higher in exchange health plans

May 15th, 2014

WASHINGTON – Under Silver health benefit plans with combined deductibles offered via health insurance exchanges, patients may have to pay more than twice as much out of pocket for prescription drugs overall as they would under a typical employer plan, according to a study commissioned by the Pharmaceutical Research and Manufacturers of America (PhRMA).

PhRMA said Thursday that the research, conducted by consultancy Milliman Inc., analyzed the differences between common health benefit designs offered to individuals through the exchanges and typical employer-sponsored plans.

With combined deductible plans, patients are responsible for 100% of their nonpreventive medical and pharmacy costs before meeting the deductible. The findings revealed that the large combined deductibles for all medical spending common in Silver plans in exchanges may disproportionately impact out-of-pocket costs for patients relying on prescription medicines, according to PhRMA. The report looks at Silver plans because they were the most popular in the enrollment period that ended March 31.

For prescriptions, patients under Silver plans with combined deductibles obtained via the exchanges face a 230% higher out-of-pocket cost sharing compared with employer-sponsored coverage, the study found. The out-of-pocket increase for those exchange plans versus employer coverage was 122% for hospital services and 118% for professional and other health services.

"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," PhRMA president and chief executive officer John Castellani said in a statement. "Patients face hurdles in accessing the medicines they need to manage their conditions, which is particularly problematic for Americans trying to control their chronic diseases."

The Milliman report also noted that Silver plans are nearly four times more likely to have a single combined deductible for medical and pharmacy benefits (46% of the time) compared with typical employer-sponsored plans (12% of the time). That's a key point, especially for patients with chronic illnesses, since their prescriptions are not covered until patients meet the deductible, PhRMA noted.

According to Milliman's analysis, the typical deductible for Silver plans is $2,000. Previous research from Avalere Health found that in the lower-cost Bronze plans, deductibles are higher, averaging more than $4,000, PhRMA reported. 

Research shows that higher out-of-pocket costs lower patients' likelihood of taking their prescription medicines to manage chronic conditions, resulting in increased hospitalizations and higher health care costs overall, according to PhRMA.

"Medicines are one of the most significant contributors to improved quality and length of life for people with serious diseases, such as chronic illnesses, cancer, and HIV/AIDS," added Castellani. "To improve health and, in turn, control health care costs, we must continue to work toward a health care system that improves access and adherence to medicines."

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