Out-of-Pocket Rx Costs Two Times Higher in Silver Plans Than Employer Plans

Out-of-pocket expenses for medications in typical silver plans are twice as high as they are in employer-sponsored plans, leading patients to fill and refill medications less frequently, which has important health implications.

The most popular health insurance plans in the marketplace exchanges created through the Affordable Care Act (ACA) have out-of-pocket prescription drug expenses that are twice as high as those in the average employer-sponsored plan, according to a new study published in the October 2015 Health Affairs. Researchers found that the higher out-of-pocket expenses in these plans resulted in fewer prescriptions being filled and refilled and higher spending on other medical services.

Using data from the Medical Expenditure Panel Survey for 2012 and the Health Insurance Exchange Compare data set for 2014, Kenneth E. Thorpe, PhD, and colleagues at Emory University’s Rollins School of Public Health examined the effects of higher cost sharing on drug and medical spending among patients with chronic conditions who are enrolled in silver plans through the ACA. For example, in silver plans:

  • 60% of people with one or more chronic conditions had medical and drug spending that exceeded the deductible
  • 31% had medical and drug spending that hit the out-of-pocket spending cap of $5725

Because the ACA potentially provides incentives for employers to drop coverage for their employees with the expectation that workers will enroll in an exchange plan, policy makers have been concerned about how enrollment in exchange-based plans will affect the use of healthcare by those who were previously uninsured and those who previously had employer-sponsored insurance. Indeed, the Congressional Budget Office estimated that employers would insure 8 million fewer people following enactment of the ACA.

Healthcare spending among previously uninsured people has been shown to generally increase by 70% when they obtain private insurance, but total healthcare spending among people previously insured through employer-based insurance plans declines if they enroll in silver plans, because these plans cover less than a typical employer-sponsored plan covers.

Higher cost sharing could be problematic for patients with chronic conditions, who usually require access to a variety of medications and primary care to remain healthy. High cost sharing on medications used by patients with chronic conditions could reduce medication use and potentially result in poorer health outcomes, the investigators warn.

“Adherence to a prescription drug regimen can reduce the rate of more expensive medical events over the long term,” the investigators note.

But if higher cost sharing makes prescription drugs unaffordable for patients with chronic conditions, any money saved by health plans or the healthcare system on drug costs might be the result of patients’ filling and refilling medications less frequently.

“In turn, this might offset any savings to payers by inducing more frequent and costly hospitalization, increased physician visits, and emergency department treatment,” they wrote. “Maintaining the use of cost-effective prescription medications might require lower cost sharing for patients with chronic conditions than is currently found in marketplaces.”