Over 99% of employees in the United States who are covered by an employer-sponsored health plan have a prescription drug benefit. Eighty-seven percent of employees covered by an employer-sponsored health plan had a tiered cost-sharing formula for prescription drugs in 2012, with over 75% having three or more cost-sharing tiers.
The cost-sharing tiers work by placing drugs on a formulary (preferred drug) list that is divided into three or more categories of drugs: generic drugs (drugs that are no longer covered by patent protection and may be produced and/or distributed by multiple drug companies), preferred drugs (drugs such as brand-name drugs that do not have a generic substitute), non-preferred drugs (drugs not on the preferred drug list such as brand-name drugs with a generic substitute), and lifestyle drugs/expensive biologics.
For 2012, the average co-payments for which employees were responsible in each of the four tiers were as follows: $10 for generic drugs, $29 for preferred drugs, $51 for non-preferred drugs, and $79 for expensive biologics. For covered-employees who had co-insurance rather than co-payments, the averages for 2012 were 20% for generic drugs, 26% for preferred drugs, 39% for non-preferred drugs, and 32% for expensive biologics.
For the 10% of covered-employees who had a two-tier drug benefit plan, the average co-payment for first tier drugs was $11 and the average for second tier drugs was $29. For those with two-tier drug plans in 2012 who had co-insurance instead of co-payments, the average co-insurance rate for second tier drugs was 27%.
For the 6% of U.S. covered-employees with drug plans for which the cost sharing was the same for all drugs, 14% were required to pay co-payments and 85% had co-insurance (the average co-payment was $13 and the average co-insurance was 22%).
For those covered-employees who had co-insurance for drug plans in 2012, 24% had a maximum dollar amount applied to the co-insurance rate and 9% had a minimum (22% had both a minimum and a maximum for first-tier drugs).
Thirteen percent of covered-employees who had prescription drug benefits had a separate prescription drug deductible in 2012, which averaged $145 per year (11% were in drug plans with a separate prescription drug deductible that also had an annual out-of-pocket limit for which the average annual out-of-pocket deductible was $1,722).
Between 2000 and 2012, the average co-payment paid by covered-employees for prescription drugs who had three or more tiers of cost sharing rose from $8 to $10 for first-tier drugs, from $15 to $29 for second-tier drugs, and from $29 to $51 for third-tier drugs. Co-insurance rates rose from 18% to 20% for first-tier drugs, from 23% (in 2003) to 26% for second-tier drugs, and from 28% to 39% for third-tier drugs.
Between 2000 and 2012, the average co-payment paid by covered-employees for prescription drugs who had two tiers of cost sharing rose from $7 to $11 for first-tier drugs and from $14 to $29 for second-tier drugs. For two-tier plans, co-insurance rates for first-tier both rose and declined between 2000 to 2008, starting and ending at 19%; and for second-tier drugs, the rate started at 28% in 2000, rose and declined between 2000 and 2012, and settled at 27% in 2012.
For covered-employees whose prescription drug plan had the same cost-sharing for all covered drugs, the average co-payment rose from $8 in 2000 to $13 in 2012. The average co-insurance stayed relatively the same, rising and falling only slightly between 2000 and 2012, starting at 22% in 2000 and ending at 22% in 2012.
If you or a family member suffered injuries due to medical malpractice or as a result of a drug reaction in the United States, you should promptly consult with a local medical malpractice attorney or drug attorney to learn about your legal rights to receive compensation for your losses.
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