Some health insurers still have policies in place that make them charge more for prescription drugs, but those policies have decreased in number over time and seem to have provided a healthy incentive for insurers to continue paying higher prices, a new study suggests.
With insurer shares in HealthPartners, Humana Inc and Cigna Corp falling nearly 20 percent in the years through 2017, the researchers calculated that in that same period they would have paid out $301.3 million in claims, made up of $324 claims for OxyContin, for those insurers.
Most employers today pay out health insurers through either a joint employer or individual arrangement, but many small businesses also do so through a combination of employer and individual. Many also extend that insurance to to employees who already have coverage through a program called universal health coverage.
For the current analysis, which was based on business health claims and payroll records for more than 10 million people enrolled in 23 large U.S. insurers, $2.6 billion was equivalent to about $8 per usual customer. However, 2014-2017, the researchers calculated that $1.5 billion would have paid out, or $9.2 per usual customer if all the insurers had not implemented full access to pharmacy coupons, given they switched to individual coverage.
“These increased and increasing premium paid-out rates indicate that health insurers’ business and business-wide incentive efforts are making a serious impact on prices paid per patient including both payer and insurer,” said senior author the study’s lead author, JoAnn Manson, a professor and coordinator of the Medicare Advantage and WhatCop benefit managers at Georgetown University Medical Center in Washington, D.C.Surge in accessibilityThe researchers analyzed their study results based on data from the NHANES survey of consumers, asking them questions about drug prices and usage, taking a look at annual and on-demand network costs in order to determine if increase in drug pricing did reflect a growing push by insurers for additional taxes on prescription drugs to pay for higher prices.
Over the years, for example, there has been a significant premium increase, driven in part by increased national supplies of other drugs, affordable medicines, and orphan drugs that were a source of a substantial burden for many consumers.
When Healthpartners and Humana merged, NewHampshire started sharing administrative costs with Humana, as their network business and a broader portion of the pharmacy benefits were moved to NewHampshire’s network. Part of that arrangement enabled NewHampshire to share pharmacy administration costs with Humana.
The researchers say this arrangement helped to bring down the overall cost of beneficiaries to $4.3 billion, or about $10 per patient.
Overall, the increase in coverage created by the combined company was associated with 862,000 fewer prescription drug prescriptions dispensed to NewHampshire and at least 7,600 fewer out-of-pocket expenditures for out-of-pocket costs related to the cost of these drugs, the analysis found.
“Ultimately, they are leaving us vulnerable,” Manson said by email. “In Europe, where we have higher burden of care, CMS (the Centers for Medicare & Medicaid Services) provides plans with secondary systems where they can sell this premium data for use in their ER (eSRF) system.”
Both companies believed that the plan prices for their insured patients improved as a result of the changes they made to the individual coverage they offered, the researchers wrote.
Health insurers should take some lessons from the changes they made to the individual coverage, said Valerie Orwig, interim chief strategy officer at the American Hospital Association in Philadelphia.
“There have been so many changes over the last decade that have reduced the usage of party pills,” Orwig, who wasn’t involved in the study, said by email. “The changes have included fewer family members using them for chronic pain, and the individuals using them become more aging and those who have them are more likely to stay away from using them.”