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
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.
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.
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.
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 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
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.