Out-Of-Pocket Costs For Drugs Will Increase Significantly Under Obamacare

Trade-Off: More People Get Drug Coverage But at Higher Costs
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A new analysis from HealthPocket of early health insurance rate filings finds that consumers who choose the lower cost Bronze Plans and Silver Plans under the Affordable Care Act (aka “Obamacare”) will likely be paying more for prescription drugs than they do now. Compared to comparable existing individual and family plan copays and coinsurance costs, consumers with prescription drug coverage can expect to pay an average of 34 percent more out of pocket for these medications if trends continue.

In the current individual and family health insurance market, nearly 20 percent of plans do not include prescription drug coverage. The good news for consumers is that the ACA will eliminate any exclusion of drug coverage by requiring it as an Essential Health Benefit in all health plans. The bad news is that in most instances, what they pay out of pocket for those drugs is likely to increase substantially from the current average annual per capita expenditure of $758. Importantly, drugs not covered by a specific health plan are not subject to any out-of-pocket limits, so checking to make sure a particular medication is included within the drug benefit is key to selecting the right plan.

“About 70 percent of Americans use prescription drugs, and they are going to need to pay very, very close attention to what plans offer to minimize out-of-pocket increases for medications,” said Kev Coleman, head of research & data at HealthPocket and author of the study. “When it comes to drug costs and changes in our newly reformed health care system, the fine print really matters.”

The analysis also found that the higher the premium cost of the health plan category under the ACA, the lower the drug costs. In most cases, the higher-end Gold and Platinum Plans had an average lower drug cost-sharing than the averages for comparable existing plans. However, experts expect the less expensive Bronze and Silver Plans with higher out-of- pocket drug costs to be the most popular for cost-conscious consumers.

In addition, consumers with complex conditions needing specialty drugs—higher cost medications that are typically injected—need to be keenly aware of what their cost-sharing obligations will be under each metal plan as coinsurance rates for these medications vary widely.

Cost-sharing for 2014 qualified health plans is based on rate filings in California, Connecticut, Ohio, Oregon, Rhode Island,Washington State, and Vermont. Drug costs assume on-formulary drugs of a 30-day supply obtained through an in-network pharmacy provider.

This HealthPocket InfoStat is part of a series using health plan data to produce unbiased market analysis and guidance for consumers navigating America's changing health insurance environment. More information about out-of-pocket costs and the Obamacare metal plans can be found at www.HealthPocket.com.