In this analysis, we find that as a percentage of the total cost of prescription drug benefits, enrollee cost-sharing for prescription drug benefits in the employer-sponsored health insurance (ESI) market fell significantly from 2014 to 2019. As costs associated with private health insurance (insurance paid for by individuals and businesses) have increased over time, the amount that the member is being asked to pay through enrollee cost-sharing has increased as well. But this analysis shows that this has not been the case for prescription drugs. We present some of the key findings in this article. Find the full report here.
Share of enrollee cost-sharing for prescription drug benefits in the ESI market declines
The average enrollee’s share of total prescription drug benefit costs declined from 16% to 13% from 2014 to 2019, while overall cost-sharing for all health care benefits remained essentially unchanged at 14%, as we show in Figure 1. Unsurprisingly, as overall costs have risen, the dollar amount of member cost-sharing across all services has been increasing in the ESI market, as it has in other health insurance markets. However, the percentage of the total cost enrollees have been paying has remained remarkably steady.
Average member cost-sharing for prescription drugs declined in the ESI market
In Figure 2, we show how, relative to total prescription drug benefits costs, health plan sponsors have been successful in restraining the growth in ESI enrollees’ spending on prescription drug benefits. While the total per member costs for prescription drugs increased by 14% over the study period, ESI enrollees’ average cost-sharing for prescription drugs actually declined by 5%.
Total prescription drug costs are concentrated among a small cohort of ESI enrollees
Among ESI members, only the top quartile experienced an increase in total prescription drug costs, including both the portion paid by the insurer and the member’s cost-sharing. For the top quartile of enrollees (for example those incurring the greatest prescription drug costs) and the top 5% of enrollees, total prescription drug costs increased by 17% and by 34%, respectively, over the study period as shown in Figure 3.
Only the Top 5% of ESI enrollees experienced an increase in cost-sharing for prescription drugs
For the majority of members, cost-sharing for prescription drugs declined or remained flat, including for the top quartile of prescription drug users. Cost-sharing increased in dollar terms by 22% for the top 5% of enrollees as shown in Figure 4.
ESI enrollees’ share of total prescription drug cost is trending downward for top utilizers
Although enrollee cost-sharing in dollar terms increased for the top 5%, we can see in Figure 5 that their cost-sharing still decreased when measured as a percentage of total prescription drug costs. Put another way, while the dollar amount of enrollee cost-sharing increased for the top 5%, the amount that health plans paid increased at a higher rate.
These findings highlight that health plans are absorbing a large share of prescription drug cost increases so that the members’ share of total prescription drug costs is trending downward. The vast majority of those with health plan coverage in the ESI market have been shielded from the increasing cost of prescription drugs and have experienced decline in average enrollee cost-sharing.
Download our full report to read more.