Consumers Likely Face High Out-Of-Pocket Costs for Specialty Drugs In Exchange Plans

In most exchange plans, consumers will face paying a percentage of the costs—known as coinsurance—rather than fixed-dollar copayments for many specialty medications used to treat rare and complex diseases.

According to a new Avalere Health analysis, some plans require enrollees to pay 50 percent of the specialty drug’s cost. (This analysis specifically focuses on drugs dispensed through the pharmacy-benefit, which includes self-administered products. Many specialty drugs must be physician-administered and will be covered under the medical benefit, which will have separate cost-sharing requirements from the coinsurance rates described here.) If exchange plans use coinsurance for specialty medications, patients may incur several thousands of dollars of cost-sharing for high-cost drugs before reaching the out-of-pocket maximum.

“This latest analysis further underscores that exchange enrollees could face high out-of-pocket costs, particularly for specialty medications,” said Caroline Pearson, vice president at Avalere Health. “High prevalence of coinsurance can also make costs unpredictable for patients who struggle to translate cost-sharing percentages into actual dollars.”

Specifically, 59 percent of Silver plans on exchanges across the nation use coinsurance for consumer cost-sharing on the specialty tier. Among Silver plans, the analysis also found that 23 percent of plans have coinsurance rates of 30 percent or more on the highest formulary tier. Sixty percent of lower-premium Bronze plans apply specialty tier coinsurance greater than 30 percent of the drug price. By contrast, only 38 percent of Platinum plans require coinsurance.  

“Health plans operating in the exchanges are using significant cost-sharing to meet actuarial values set forth in the law and limit premium costs. However, these formulary designs often result in high costs for patients with chronic illness who need biologics and other products on the specialty tier,” said Dan Mendelson, CEO and founder of Avalere Health. “Tracking these patients to ensure that they are getting appropriate care is a critical quality need.”

Methodology

Avalere Planscape examined 603 different plan designs across metal levels offered by 60 different carriers in 19 states, both federally facilitated marketplaces (FFMs) and state-based exchanges (SBEs). The distribution of metal level and plan type of the plans included is similar to the distribution of plans offered on the FFM. High deductible plans are not included in this analysis.

For more information about Exchange Plans, contact Caroline Pearson at CPearson@Avalere.com.

View Avalere's full press release attached.

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