Rules for prescription drug benefits can get complicated. If you have such benefits, your health insurer will probably cover most of the cost of your medication, and you will be required to pay a small copayment. But the amount of these copayments can vary widely between plans. Some health insurance plans, for example, set the same copayment for all medications, while others vary the copayment amount depending on the type (generic or brand-name) or brand of drug. And, to lower their financial burden, some health insurance companies have recently been raising their prescription drug copayments.

Variations in prescription drug coverage may not only affect your bank account. Some studies suggest that substantial changes in drug benefits are associated with higher rates of illness and death, particularly among poor and elderly patients. Other studies, however, have shown no such association.

Decreases in the use of nonessential medications may be beneficial, while decreases in essential medications may be harmful. A new study in the May 19, 2004 issue of the Journal of the American Medical Association found that while doubling copayments reduced the use of nonessential medications such as antihistamines and anti-inflammatories, it also reduced the use of essential medications used to treat chronic diseases (i.e., diabetes), which could have serious health consequences.

About the Study

This study included 528,969 people who were enrolled in health insurance plans under one of 30 employers. To analyze the drug benefits for each of the 52 health plans involved in this study, the researchers devised an index of plan generosity, representing the expected out-of-pocket cost of a standard “market basket” of drugs. The health plans were divided into three tiers, based on the drug benefit generosity:

  • 1-tier plans (the most generous): require on average a $6.05 copayment per prescription for a 30-day supply
  • 2-tier plans: require on average a $6.31 copayment for generic drugs and a $12.85 payment for brand-name drugs for a 30-day supply
  • 3-tier plans: require copayments that range from $5.70 to $20.81, on average, for a 30-day supply

The researchers kept track of which drugs were being prescribed to participants, classifying each drug into a therapeutic class (i.e., antidepressants, antihistamines, diabetes medications). They also identified participants with chronic conditions by reviewing their medical claims.

Compiling their data, the researchers simulated the effects of doubling drug copayments—moving from a 2-tier plan with copayments of $6.31 for generics and $12.85 for brand-name drugs to one with copayments of $12.62 and $25.70, respectively.

The Findings

In response to doubling copayments, the researchers predicted substantial reductions in the use of all classes of drugs, with the largest decreases occurring for NSAIDS, or nonsteroidal anti-inflammatory drugs, such as Celebrex and Vioxx (45%) and antihistamines (44%). Overall reductions in use of cholesterol-lowering medications (34%), ulcer medications (33%), asthma medications (32%), high blood pressure medications (26%), antidepressants (26%), and diabetes medications (25%) were also predicted.

Among chronically ill patients receiving ongoing care, the reduction in disease-specific drug use in response to increasing copayments was less dramatic. For example, the use of antidepressants in depressed participants declined by just 8%, compared with 26% overall (antidepressants are increasingly being used for conditions other than depression). There was one exception: patients with diabetes did dramatically reduce antidiabetic drug use in response to a doubling of co-payments—by 23%.

Participants with chronic conditions that required intermittent care—those with allergic rhinitis and arthritis —reduced their disease-specific use more dramatically—by 27% and 31% for allergies and arthritis medications, respectively.

While these findings are compelling, they do have certain limitations. First, only people with employer-paid insurance were studied, so these findings do not necessarily apply to other populations (i.e., the unemployed or the elderly), who might actually be more adversely affected by changes in prescription drug benefits. Furthermore, the reported changes in drug use were based on calculated predictions, not actual increases in copayments, which would have been a more reliable—but less feasible—measurement.

How Does This Affect You?

These findings suggest that changes in prescription drug benefits have significant effects on medication use. But what does this mean for your health? While the benefits of reducing use of non-essential medications may outweigh the risks, reducing use of essential medication (i.e., diabetes medications) could have serious health consequences. And a solid amount of research suggests that the use of blood pressure and cholesterol medications, for example, are beneficial in most people who take them.

In the confusing and constantly changing world of health insurance, these results provide valuable information for health insurance companies. As these companies strive to control costs, they may want to reconsider across-the-board increases in prescription drug copayments. While the possibility of saving money by reducing non-essential medication use may be tempting, the consequences of reducing essential medication use could be financially counterproductive if it means sicker beneficiaries.

One possible answer is to vary copayments not by their class (generic or brand-name) or brand, but by their effect on people’s health. Reducing the use of drugs like antihistamines and anti-inflammatories may not pose serious health threats, but reducing the use of drugs essential for treating chronic disease (i.e., diabetes medications) could have major health implications.