Health insurance companies have become more restrictive on their lists of covered drugs.
Darwin Brandis/Getty Images/iStockphoto
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Darwin Brandis/Getty Images/iStockphoto
When it comes to prescription drugs, insurance coverage isn’t what it once was.
The list of drugs covered by insurance companies, called a formulary, is shrinking. In 2010, the average Medicare formulary covered about three-quarters of all drugs approved by the U.S. Food and Drug Administration, according to new research from GoodRx, a website that helps patients find discounts on prescription drugs. Now, it’s more than half way.
GoodRx’s report is called “The Big Dilemma” because it illustrates how patients are caught between high prices from drug companies and limited drug coverage from health insurance companies. GoodRx is an NPR funder.
“I think too often people talk about the cost of prescription drugs too much and we yell about high prescription drug costs,” said Tori Marsh, director of research at GoodRx. “But we’re not talking about low coverage.”
Commercial plans may cover fewer drugs than Medicare plans because they are not subject to the same federal coverage rules as Medicare, Marsh said.
What’s more, according to the report, patients face more barriers to getting drugs covered by insurance than they did 14 years ago.
Half of the drugs covered by insurance companies require something like a prior authorization, in which the insurance company requires doctors to take extra steps to justify their prescribing reasons. This step could cause delays and make it more difficult for patients to get their prescribed medications, or prevent people from filling prescriptions exactly.
Insurers trade patients for lower prices for access to drugs
Jeromy Bauerreich, a health economist at Johns Hopkins University, said limited formularies and access restrictions are still for commercial purposes. They provide negotiating leverage to the part of your health insurance that deals with drug coverage, called a pharmacy benefit manager.
“The way they fight price increases or spending surges is to have really tough negotiations with drug companies,” Bauerreich said.
For example, an insurance company may reject a drug manufacturer’s offer, but if the price is lowered or rebates are added, the insurance company may make the drug a preferred drug without prior authorization.
Negotiated prices and rebates typically aren’t passed directly to consumers as lower copays, but they can take the pressure off insurance premiums.
The Association for Pharmacy Service Management, a trade group for pharmacy benefit managers, questioned GoodRx’s report.
“PBMs advise and assist employers in designing drug benefits that fit the needs of their unique patient populations,” said PCMA spokesman Greg Lopes. “PBMs have a strong track record of delivering affordable medicines to payers and patients.”
Drug companies have criticized PBMs for not adequately sharing with patients the discounts they receive.
If you’re shopping for insurance, check the coverage for the drugs you need
GoodRx says prescription drugs will see the biggest declines heading into 2020.
“It’s hopeful to see that things aren’t getting worse,” said GoodRx’s Marsh. “But I would like to see this chart go in the opposite direction, covering more drugs and having fewer drugs restricted.”
However, in all the years of prescription data she has reviewed so far, drug coverage has never been expanded.
If consumers want a more generous plan, they may need to shop around and buy one, even if it means higher monthly premiums, Bauerreich said. But most people are just looking for a low premium.
“It’s unbelievable,” he said of buying health insurance. “I have a Ph.D. in this area.
