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Employer Health Benefits 2003 Annual Survey |  |
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Prescription Drug Benefits - Prescription drugs continue to be a standard benefit provided for covered workers, (99%) (Exhibits 8.2, 8.3). To combat rising prices, firms are increasingly providing employees with financial incentives to encourage use of generic drugs and certain categories of preferred brand name drugs.
- The use of three-tier cost sharing arrangements, where a worker faces one copay for generic drugs, a higher one for preferred drugs (such as brand name drugs with no generic substitutes), and an even higher one for non-preferred drugs (such as brand named drugs with generic substitutes) has increased over the past year, growing from 55% of covered workers in 2002 to 63% in 2003 (Exhibit 9.1). Over the same time frame, two-tier cost sharing arrangements, where employees face one payment level when purchasing brand name drugs and another when using generic drugs, declined from 30% to 23% of covered workers. The prevalence of plans that charge workers the same amount, regardless of the type of drug purchased, has remained constant.
- The majority of workers in conventional, HMO, PPO, and POS plans have either a two-tier or three-tier cost sharing formula for prescription drugs. Workers in PPOs are most likely to have a three-tier cost sharing formula (65%).
- The average copayment requirement for employees when buying a non-preferred drug has risen from $17 in 2000 to $29 in 2003 (Exhibit 9.2).
- Copays average $9 for generics, $19 for preferred drugs, and $29 for non-preferred drugs, with little variation by plan type. Average copays for non-preferred drugs have increased over the last year, especially in PPO and POS plans. Copays for such drugs remain highest in PPO plans, where they increased from $26 in 2002 to $30 in 2003.
- For workers with coinsurance rather than copays (between seven and eleven percent of workers, depending on drug type), cost sharing levels average 20% for generic drugs, 24% for preferred drugs, and 29% for non-preferred drugs (Exhibit 9.3).
- Seventy-one percent of workers are in plans that use a for-mulary that restricts which drugs will be covered, statistically unchanged from 2002 (70%) (Exhibit 9.5).
- Twenty-eight percent of covered workers are in firms that “carve out” prescription drugs and provide this benefit separately from their standard health plans, a similar percentage to last year.
- Among these firms, employers reported that prescription costs for family coverage increased 15%.
- Eight percent of covered workers face a separate deductible for prescription drugs in 2003, and the average deductible has risen from $88 in 2000 to $161 this year.
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EMPLOYER HEALTH BENEFITS 2003 ANNUAL SURVEY
The Kaiser Family Foundation and Health Research and Educational Trust
Information provided by the Health Care Marketplace Program. Publication Number 3369. |
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