Consumers in the individual or small group markets usually end up paying more out-of-pocket for prescription drugs than people in large group employer plans pay, a new study suggests.
According to a recent study by the Robert Wood Johnson Foundation (RWJF), medications in lower plan tiers usually require a modest copay versus a higher tier, where consumers are exposed to a negotiated copay.
At higher tiers, out-of-pocket spending increases considerably. Less than 10% of silver plans in the individual market have copayments that are not subject to a deductible, and for those that are, the median copay is $550. In the small group market, about 25% of silver plans use copays before the deductible, with a median copay of $250, according to the study.
But in the large group market, cost-sharing is more moderate with more than 40% of plans using copayment in the fourth tier.
Specifically, 51% of plans in the large group market had four or more tiers, compared with 86% in the small group and 93% in the individual market. And according to the survey, more tiers usually equate with higher costs for patients. Small group markets are more likely to have cost-sharing for drugs that are subject to the deductible.
Fifteen-dollar copays are the median price for generic medications under silver plans in both the individual and small group markets. Still, more than 25% of both markets have cost-sharing that is subject to an annual deductible, according to the study.
Overall, 75% of all plans in the individual market are designed to only offer co-insurance after the deductible is met. The median co-insurance of these plans is about 40%. But in the small group market, less than one-third of silver plans are designed this way and the median co-insurance is about 30%.
Drug manufacturers also play a role in this trend, according to the study. For years, drug companies have offered patients copay coupons to offset costs, which negates the idea of the cost-sharing benefit design.
But the insurance companies have their own move as well: copay accumulators, which prohibit copay coupons from being applied to patient deductibles and maximum out-of-pocket limits.
In addition, many states are passing legislation to limit the use of copay coupons, especially when a generic-level drug is available.
“While much of the broader policy discussion about drug costs has focused on list prices, plan design will continue to be an important issue for consumers and many other stakeholders,” the study concludes.