Benefit packages in employer-sponsored health plans have become more generous over the past twenty years, most notably with regard to prescription drug coverage and preventive services. The shirt from conventional to managed care plans was a driving factor in the rise of prescription drug coverage and preventive services. Managed health plans have historically favored preventive care such as adult physicals, annual OB/GYN visits, well-baby care, and comprehensive care in the form of prescription drugs and ambulatory coverage.

• Seventy-nine percent of covered workers are employed in firms reporting that the level of benefits offered in 2004 is unchanged from 2003 (other than changes in cost sharing) (Exhibit 8.1).
• Most health plans offer an annual adult physical, prescription drug coverage, prenatal care, annual OB/GYN visit, well-baby care, and inpatient and outpatient mental health services (Exhibit 8.2).
  • In general, all small firms (3-199 workers) offer the same level of benefits as all large firms (200 or more workers), although, as discussed in Section 7, workers in all small firms on average face higher deductibles than workers in all large firms.
  • Conventional plans provide less comprehensive coverage for preventive care. While most covered workers are covered for an annual adult physical (95%), only 77% of those enrolled in conventional plans have this benefit (Exhibits 8.2, 8.3).
  • Eighty-nine percent of covered workers have coverage for oral contraceptives in 2004, up from 70% in 2000. Still, covered workers across all plan types are less likely to have coverage for oral contraceptives than for other types of prescription drugs (Exhibit 8.2).
• Covered workers in all small firms (3-199 workers) are more likely to have a limit on out-of-pocket spending than covered workers in all large firms (200 or more workers), although the vast majority of covered workers (80%) have this protection (Exhibit 8.4).
• The majority of covered workers in HMO and POS plans have no lifetime limit on benefits —the maximum amount of benefits a plan will pay for an employee over his or her lifetime. Covered workers in PPO and conventional plans are more likely to have a limit, although the limit is typically more than $1,000,000 (Exhibit 8.5).
  • Only one percent of covered workers have a lifetime limit on benefits of $1,000,000 or less (Exhibit 8.5).