Research out today from the Employee Benefit Research Institute (EBRI) Center for Research on Health Benefits Innovation found that expanding pre-deductible coverage to chronic disease management medications under employer-led health plans would lower costs for patients while adding only minimal costs to health insurance premiums.
In this report, EBRI researchers examined the impact of expanding pre-deductible coverage to 116 drug classes used to treat chronic conditions on insurance premiums and factors influencing the premium increases. Importantly, researchers found that expanding pre-deductible coverage to 116 chronic drug classes would have a relatively small impact on premiums, ranging from “1.3% to 4.7%.”
Additionally, researchers found that premiums increased the least (only 1.3%) when employers imposed their usual coinsurance cost-sharing percentage and increased prescription medication use reduced other medical services such as hospitalizations or office visits.
Under current law, Health Savings Account-eligible high-deductible health plans offered by employers have the flexibility to cover 14 medications and other health services used to manage chronic conditions before meeting the plan deductible. Expanding coverage before patients meet their deductible eliminates a financial barrier by lowering their out-of-pocket costs and increasing utilization of essential medicines, medical devices, and diagnostic tests, ultimately improving health outcomes. Earlier research has shown that providing pre-deductible coverage for these services had virtually no impact on premiums.
Providing coverage before patients meet their deductible eliminates a financial barrier for patients by lowering their out-of-pocket costs. Improving access to essential medications to treat chronic conditions can improve utilization and adherence patterns, ultimately improving health outcomes and avoiding the need for other health services such as emergency department and hospital visits.
The white paper builds on prior research indicating that many employers are already offering expanded pre-deductible coverage and would add more services on a pre-deductible basis if allowed by the IRS. Congress is considering legislation that would allow employers to further increase pre-deductible coverage.
The paper was written by Paul Fronstin, PhD, of EBRI, Christopher Roebuck, PhD, of RxEconomics LLC, and Mark Fendrick, MD, of the University of Michigan, and supported by the National Pharmaceutical Council and other organizations.