The 2008 survey captured copayment and coinsurance amounts on six drug categories (Generics, Preferred Brands, Nonpreferred Brands, Brands, Lifestyle, and Specialty Drugs) for retail and mail prescriptions. In addition to providing average amounts of copayments and coinsurance, the range with low, median, and high points is reported to give drug benefit decision makers actionable information for setting cost sharing amounts. Additional detail and drill-down tables on copayments and coinsurance are in this online report.

Employers establish drug plan designs to share some portion of drug costs with members, usually based on an amount for each tier or drug category. Members paid a greater percentage of retail costs than mail-service costs. On average, members paid 26.6% of a retail prescription and 19% of a mail prescription. Table 11 illustrates the range of claim cost paid by members.

Historically, employers created incentives for members to use mail service by keeping mail-service cost sharing low relative to retail cost sharing. Although mail-service discounts are higher, the lower cost sharing amounts common at mail often result in mail-service prescriptions costing employers more than retail prescriptions. Employers learned that mail service will not produce savings for them unless cost sharing is structured appropriately. Average mail copayments are now slightly more than two times the average retail copayments for generics, preferred brand, and nonpreferred brand categories.

In general, survey data show increases in both retail and mail copayments for generic, preferred brands, and nonpreferred brands as shown in Table 12. Average coinsurance for retail cost sharing amounts showed very small increases. The mail cost sharing coinsurance for nonpreferred brands was the only category that showed a small increase.

Plan Design Configurations
Employers and PBMs use fairly standard terminology to identify cost share amounts. Table 13 illustrates how the industry categorizes drugs for cost sharing and reimbursement purposes. Managed care’s original tiered drug benefit with generic and brand-name drug categories has been replaced with three-, four-, and five-tier configurations as shown in Table 14.

Three or more tier plan designs are used by 86.5% of employers as illustrated in Table 14. The most commonly used cost sharing approach is a three-tier copayment plan design (generics, preferred brands and nonpreferred brands). Average copayments and coinsurance amounts are provided for these multi-tier plan designs for retail and mail dispensing channels in Tables 15-20. Because of the small sample size for the four-tier plan designs, average copayments and coinsurance percentages in Tables 19 and 20 should be used with caution.

Retail Copayments
Copayments are flat-dollar cost sharing amounts. Copayment plan designs are simple and easy to communicate to members. This approach also is easy to implement for mail-service pharmacies where payment for prescriptions is made before dispensing and mailing of the drug.

Retail Coinsurance
A coinsurance cost share amount is a percentage of the total prescription cost. Although implementing coinsurance cost sharing requires clear and frequent member communication, the approach buffers the employer from prescription drug cost inflation and engages beneficiaries in understanding drug costs. As prescription costs increase, the member pays more. In many cases, employers may add a dollar minimum and/or a dollar maximum. For example, a preferred brand prescription cost share might be 25% of the total prescription cost. Or it might be 25% of the cost of the drug with a $3 minimum amount to be paid for the prescription. A different employer might not set a minimum but set a maximum so its member would pay 25% of the cost of the drug with a maximum of $150 to be paid.

Mail Copayments
Mail copayments are flat-dollar amounts for a 90-day supply of medication. Mail-service prescriptions are most commonly used for the prescription drugs that members use to treat chronic conditions such as asthma, high blood pressure, and high cholesterol.

Mail Coinsurance
Mail coinsurance amounts are a percentage of the total cost of the prescription. Increased access to the mail-service pharmacies through the Internet has made implementation of mail coinsurance simpler and less confusing for members. The cost of mail-service prescriptions can be calculated before members have to order and pay for prescriptions.