Impact of the Health Insurance Marketplace on Participant Cost Sharing for Pharmacy Benefits

PhRMA engaged Milliman to analyze the differences between health care benefit designs offered to individuals in the public health insurance marketplace, also called Health Insurance Exchanges (HIX), and typical plans sponsored by employers. The focus of the analysis was to determine the impact on pharmacy benefits in HIX as a result of the relatively high prevalence of plans with combined deductibles for both medical and pharmacy benefits, compared to employer-sponsored plans. Milliman evaluated the prevalence of various benefit design structures as well as the financial impact to the member of a combined deductible.

Milliman's analysis confirmed the following conclusions: 

  • Typical employer-sponsored plans are significantly more generous than typical Silver plans found in HIX. In a typical Silver plan, the member cost charing (prior to any government subsidies) is 38% more than the typical cost sharing in an employer plan in aggregate. The majority of HIX enrollment, as of February 2014, is in Silver plans (62%).

  • Silver plans offered on HIX are nearly four times more likely to have a single combined deductible for medical and pharmacy benefits than typical employer-sponsored plans (46% of the time compared to 12%, respectively).

  • Silver plans with combined deductibles impose significantly higher member cost sharing for pharmacy benefits than a typical employer-sponsored plan (130% higher).

This report details Milliman's analysis and the methodology used to develop these conclusions. 

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