The Affordable Care Act, otherwise known as Obamacare, requires insurance companies in 2014 to offer new categories of health insurance plans to consumers: Bronze, Silver, Gold, and Platinum. These plans will all offer a minimum standard of benefits determined by the government, known as the plan’s “essential health benefits”. What many don’t realize, however, is that out-of-pocket prescription drug costs will rise for many who buy these plans.
If you buy one of the less expensive “bronze” or “silver” insurance plans sold through the Affordable Care Act’s online healthcare exchanges, you will likely be surprised at how many of these plans will not pay for a doctor visit or for prescription drugs before you meet your annual deductible, which could result in thousands of dollars of out-of-pocket medical expenses each year, or more.
There is growing concern among the medical community that this may discourage people who buy these plans from actually using many of the health services they need, especially for preventative care and prescriptions for management of chronic health conditions.
“This could be the next shoe to drop, as people don’t realize that if they’re buying a bronze plan, they may have to pay $5,000 out of pocket before it contributes a penny,” said Carl McDonald, senior analyst with Citi Investment Research, speaking at a Washington, D.C., conference last month. Analysts throughout the industry are concerned about the resulting rise in out-of-pocket prescription drug costs that will be seen.
Out-of-Pocket Prescription Drug Costs To Surprise Many New Insurance Consumers
Bronze and silver plans * which have lower monthly costs but typically, higher deductibles – are the most likely to require consumers to spend that amount themselves before the insurer pays any claims. There is no nationwide data on how many do that. But in seven major cities, half of bronze plans on average require policyholders meet the deductible before insurers help with the cost of a doctor visit, according to an analysis by eHealthinsurance.com, a private online marketplace, for Kaiser Health News. Patients in those plans who haven’t yet met their annual deductible would have to pay the full cost of the visit, unless it was for a preventive service mandated by the law. A typical office visit can run $65 to $85, while more complex visits can cost more.
Silver plans, which generally have higher monthly premiums, are more generous, with more than three-quarters paying for doctor visits before the deductible is met. The analysis included most or all of the plans available through the health law marketplaces in Atlanta, Philadelphia, Dallas, Tampa-St. Petersburg, Miami, Chicago and Phoenix.
Meeting the deductible before most coverage kicks in is common in the individual market, but differs sharply from job-based health insurance. More than three-fourths of the insurance plans offered to Americans with coverage through their jobs pay a substantial chunk of the cost of doctor visits without the worker having to meet the annual deductible first, according to the annual survey of employers by the Kaiser Family Foundation. (KHN is an editorially independent program of the foundation.)
Don’t Assume the Lowest Premium Health Insurance Plan Is Best
Experts say consumers should review a wide range of plan options when they purchase – and not assume that the plan with the lowest monthly premium will be the best choice for them. A consumer must examine the potential out-of-pocket costs they will bear with any plan they select. Still, learning about what healthcare services are covered before the deductible is met can take some research before purchase.
Plans that list a price for a doctor visit followed by the phrase “after the deductible is met” mean the consumer must pay the full deductible before getting doctor visits for a small copayment. Additional information can be found by clicking the “details” button and reading the summary of benefits. Consumers can also call insurers directly or look up the information under the policy name on an insurers’ website.
All qualified health plans will be required to include prescription drug coverage starting in 2014. However, that does not mean that your specific medications will be covered. The Affordable Care Act requires that at least one drug is covered in each therapeutic category and class. However, an individual state’s choice of a benchmark plan will provide the exact number of drugs that are required within each category and class. Depending on the health plan, this can mean that the cholesterol lowering drug Zocor may be covered but Lipitor is not covered. Before enrolling in a Bronze plan (or any health plan), it is important to determine:
- Are your medications covered?
- What are the copayment or coinsurance fees for your medications?
- Are there any restrictions placed on your medications (e.g. the need for prior authorization)?
Another consideration regarding drug costs is a deductible amount may need to be satisfied before the plan begins to share the cost of drugs. This is where out-of-pocket prescription drug costs could really surprise many who are accustomed to having low co-pays for their prescription drugs.
Consumers who regularly take medication will need to examine their Obamacare plan options carefully. Even before considering cost-sharing rates, the consumer must confirm that their drugs are covered by the health plan. Uncovered drugs are not subject to any limitations on annual out-of-pocket costs. The Affordable Care Act requires only one drug per category and class be covered within a health plan formulary, though the benchmark plan chosen the consumer’s state can increase that number on a per category/class basis. Depending on the state, the minimum number of drugs to be covered by the prescription drug benefit varies from 485 medications to 1,070 medications. Additionally, a particular drug’s tier assignment to “preferred brand name drug,” “non-preferred brand name drug,” and “specialty drug” is left to the discretion of the health plan. Consequently, a drug that is classified as a “preferred brand name drug” in one plan may be a more expensive “non-preferred brand name drug” in a different plan. All of these factors suggest that consumers should do their homework prior to enrolling in a health plan.
Use a Prescription Discount Card to Reduce Out-of-Pocket Prescription Drug Costs
Discount Drug Network would like to remind our readers that since you will be paying out of pocket for many prescription drugs you have to purchase, it is in your best interest to compare the price you can get at the pharmacy through your insurance plan to the price we have negotiated for cash payers. Our online pharmacy drug pricing comparison tool is a game-changer in saving you money on prescription drugs. You have the ability through our comparison engine to look up our lowest-negotiated drug prices at every pharmacy near you. If our negotiated price beats your out-of-pocket costs from your insurance, then just use our Prescription Discount Card to make your purchase. If you don’t have one, you can print one online here and we will mail you a permanent card as a follow-up. To learn more about Discount Drug Network’s Prescription Discount Card, check out our blog or our “How This Works” page which explains how we negotiate with the pharmacies and how we are able to offer the Prescription Discount Card for free to consumers.
About Discount Drug Network
At Discount Drug Network, we’ve got your back! We put you in the driver’s seat and help you become your own advocate. We save our cardholders time and money by filling in the gaps that insurance and Medicare don’t cover. For our cardholders without insurance, we do our best to make health care affordable and accessible. It’s simple – we compare pharmacy prices, you save!
In short, we provide easy access to the largest collection of the best discounts available in the industry.