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Employer health plans that charge retirees higher co-payments for retail pharmaceuticals saved an average of 18.7% per member in 2001.
Employer health plans that charge retirees higher co-payments for retail pharmaceuticals saved an average of 18.7% per member in 2001, but their enrollees' out-of-pocket costs were 59.4% higher, on average ($389 versus $244), according to a new study published on the Web site of the journal Health Affairs (www.healthaffairs.org).
The authors studied prescription drug claims made by more than 29,000 retirees age 65 and older who were enrolled in 96 employer plans managed by one pharmacy benefit management firm, comparing prescription drug use and costs in a number of plan designs.
The authors categorized plans as "more aggressive" or "less aggressive," defined by whether they required an above-average or below-average co-payment for brand-name drugs, or whether they required coinsurance of more or less than 30% for brand-name drugs. For the "more aggressive" cost-sharing plans, average per-enrollee costs to the plan were $1,155 and average enrollee out-of-pocket costs were $389 in 2001. For the "less aggressive" plans, average per-enrollee plan costs were $1,421 and average enrollee out-of-pocket costs were $244 in 2001.
The study also found that enrollees are more likely to use generics when they fill their prescriptions at retail pharmacies under plans that have the greatest spread in co-payments between brand-name and generic drugs. This is particularly true in plans that make use of coinsurance, which as a percentage of the total cost, varies based on the total price of the drug, as opposed to a flat co-payment. For example, the authors found that in three-tier plans with a maximum 30% coinsurance for retail purchases and an actual co-payment difference of $15 between generic and brand-name drugs, 44.5% of prescriptions were generic. In a three-tier plan with a $5 to $10 difference between tiers, only 36.1% were generic. PR