Virtually all covered workers have prescription drug benefits. About three in four covered workers are in plans with a three-tier or four-tier cost-sharing arrangement for prescription drugs. The average copayment amounts in these plans have risen steadily over the past few years.

This year we changed the way in which we calculate estimates related to prescription drug cost sharing. In previous years, the values reported for those with the same cost sharing regardless of the type of drug were used in calculating the preferred and nonpreferred drug average copays and coinsurance. Similarly, for those reporting a two-tier cost sharing structure, we applied the second-tier information to the nonpreferred drug copays and coinsurance. For the first time this year, we present cost sharing for prescription drugs by tier level. For example, average copayments are presented separately for those that report three or four-tier cost sharing, two-tier cost sharing, or the same cost sharing regardless of type of drug. We have applied the new methods to data from prior years to show the change over time.

• As in prior years, nearly all (98%) covered workers in employer-sponsored plans have a prescription drug benefit.
  
  
• A majority of covered workers (91%) in 2007 have some sort of tiered cost-sharing formula for prescription drugs (Exhibit 9.1). Cost-sharing tiers generally are associated with the placement by a health plan of a drug on a formulary or preferred drug list. The formulary or drug list generally classifies drugs as a generic, a preferred brand-name, or a nonpreferred brand-name drug. More recently, a few plans have created a fourth tier of cost sharing, which is used in some cases for lifestyle drugs or expensive biologics.¹
  
  
• Seventy-five percent of covered workers are enrolled in plans with three or four tiers of cost sharing for prescription drugs, a similar percentage to last year (74%) (Exhibit 9.1).
  
• • HDHP/SOs have different cost-sharing patterns for prescription drugs than other plan types. Only 45% of covered workers in HDHP/SOs are in a plan with three or four tiers of cost sharing for prescription drugs, compared with 75% of covered workers overall. Twenty-eight percent of covered workers in HDHP/SOs are in plans that apply the same cost-sharing structure regardless of the type of drug, and an additional 15% are in plans that pay 100% of prescription costs once the plan deductible is met (Exhibit 9.2).
    
    
• Among workers covered by plans with three or four tiers of cost sharing for prescription drugs, a large majority face copayments rather than coinsurance when they use generic, preferred, and nonpreferred drugs (Exhibit 9.3). The percentages differ slightly across drug types because some plans have copayments for some drug types and coinsurance for other drug types.
  
• • For covered workers in plans with three or four tiers of cost sharing for prescription drugs, the average drug copayments for generic ($11), preferred ($25), and nonpreferred ($43) drugs are the same amounts as last year (Exhibit 9.4).
    
    
  • For covered workers in plans with three or four tiers of cost sharing for prescription drugs who face coinsurance rather than copayments, coinsurance levels average 21% for generic drugs, 26% for preferred drugs, and 40% for nonpreferred drugs (Exhibit 9.5).
    
    
• Seven percent of covered workers are in a plan that has a fourth tier of cost sharing for prescription drugs (Exhibit 9.1). Some plans use these fourth tiers for lifestyle drugs or specialty drugs such as biologics. For covered workers in plans with four cost-sharing tiers, 42% face a copayment for fourth-tier drugs and 38% face coinsurance (Exhibit 9.3).
  
• • The average copayment for fourth-tier drugs is $71 (Exhibit 9.4). The average coinsurance amount for fourth-tier drugs is 36% (Exhibit 9.5).
    
    
• Sixteen percent of covered workers are in a plan that has two tiers for prescription drug cost sharing (Exhibit 9.1). Of those with two-tier cost sharing, 78% have copayments for the first tier (generic drugs) and 68% have copayments for the second tier (preferred drugs) (Exhibit 9.6). The average copayment for the first tier is $10, while the average copayment for the second tier is $23 (Exhibit 9.7).
  
  
• Six percent of covered workers are covered by plans in which cost sharing is the same regardless of the type of drug chosen (Exhibit 9.1). Among these covered workers, 55% are in plans that apply copayments and 42% are in plans that apply coinsurance (Exhibit 9.9). These percentages vary by plan type. The vast majority of covered workers in HPHD/SOs with this type of cost sharing face coinsurance rather than copayments (94% vs. 6%) when filling prescriptions.
  
• • For those workers with the same cost sharing regardless of the type of drug, the average copayment is $13 (Exhibit 9.10) and the average coinsurance is 22% (Exhibit 9.11).
    
    
• About 11% of covered workers with drug coverage face a separate drug deductible, in addition to any general annual deductible the plan may have. There were no statistically significant increases or decreases from the levels reported in 2005, the last time the question was asked (Exhibit 9.12).
  
  
• For the first time this year, the survey asked about a separate out-of-pocket maximum for prescription drugs. A small percentage (8%) of covered workers have a separate annual out-of-pocket maximum that applies to prescription drugs (Exhibit 9.13). The variation between plan types is not statistically significant.
  
  

Click here to continue on to Exhibit 9.1