Prescription drug spending costs up under ACA, out of pocket costs down

pills and money

As health insurance enrollment has risen under the Affordable Care Act, so, too, have the number of prescriptions patients fill. And they’re are paying less out of their own pockets to do so.

The newly insured filled, on average, 28 percent more prescriptions and had 29 percent less out-of-pocket spending per prescription in 2014 compared to 2013, finds a new study from Health Affairs. It looked at prescriptions filled and out-of-pocket spending for a panel of 6.7 million prescription drug users before and after the ACA’s implementation, including those who pay entirely out of pocket.

“Those gaining Medicaid coverage had larger increases in prescription fill rates (79 percent) and reductions in out-of-pocket spending per prescription (58 percent) than those who gained private insurance (with 28 percent more fills and 29 percent less out-of-pocket spending per fill),” according to a Health Affairs blog post.

Meanwhile, reductions in out-of-pocket spending were pronounced. Just two examples: Patients with high cholesterol paid $359 less in out-of-pocket costs in 2014 compared to 2013 if covered by Medicaid in 2014 and $200 less if holding private insurance in 2014, the study found.  

This comes as providers and payers wage a protracted battle against healthcare costs in general and the high cost of prescription drugs in particular.

Although a recent report by the Robert Wood Johnson Foundation and the Urban Institute concluded that the Affordable Care Act has cut spending, many experts believe healthcare spending will comprise 20 percent of the U.S. economy by the end of next decade, FierceHealthFinance recently reported.

Pharmaceuticals had the biggest pricing increase among all sectors of healthcare. However the sub-sector's annualized growth rate fell to 4.4 percent in 2014, down from 4.8 percent in June 2015.

Many put the blame on the pharma industry. Giants such as Amgen, Allergan and Pfizer have imposed double-digit percentage price increases on dozens of their branded drugs since late last year.

And just this week, AHIP raised the alarm that pharma companies may be exploiting a legal loophole that increases utilization costs of certain drugs, FierceHealthPayer reported.

Ever-rising drug prices are squeezing hospitals’ bottom lines, too. Total prescription spending on drugs increased at a 12.2 percent clip last year, up from a 2.4 percent increase in 2014, according to data from the Centers for Medicare & Medicaid Services.

- here’s the blog post
- here’s the study