As the cost of health care continues to rise, more and more health plans are transferring the increased cost of prescription drugs on to patients in the form of cost-sharing arrangements. These cost sharing arrangements include higher premiums, co-payments, deductibles, and coinsurance. Patients living with rare, serious, or chronic conditions are disproportionately impacted by this shift in cost-sharing. A priority concern for patients is insurers who are implementing “specialty tiers” for prescription drug plans (PDP’s).
Tiering is a cost-sharing strategy employed by insurers that places drugs into groups called “tiers” based on criteria determined by the insurer.
The most common drug tiering structure used by insurers categorizes drugs in the following way:
When insurers require patients to pay a percentage of the cost of a drug, this is known as coinsurance. Specialty tier coinsurance rates can vary from 20% to 50% or more.
A specialty tier drug is defined as a category of prescription drugs within a tier in a drug formulary for which a beneficiary’s cost-sharing is greater than tiers for generic drugs, preferred brand drugs, or non-preferred drugs in the prescription drug plan’s formulary.
In the 2013 survey of Employer Health Benefits, the Kaiser Family Foundation found that 81% of covered workers are in plans with three or more cost-sharing tiers. They also found that coinsurance is the most common form of cost-sharing for the fourth tier.
HFA is tackling this issue on the Federal Level and in the States.