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Obamacare health plans and prescription drugs

If you're going to select a new health plan under the Affordable Care Act (a.k.a. Obamacare), you'll be glad to know these plans provide prescription drug coverage as an essential health benefit.

Among current individual and family health insurance plans, nearly one out of five health plans don't include prescription drug coverage.

"Some only offer copays for generic drugs, or don't offer brand names or specialized drugs," says Dominic Massi, founder and president of Massi Insurance Consulting in Las Vegas and a certified benefits and wellness adviser. Now under health care reform, all plans sold through the new health insurance marketplaces (formerly called exchanges) must include prescription coverage.

The open enrollment period for 2014 plans purchased through the state health insurance marketplaces is Oct. 1, 2013, through March 31, 2014. Coverage begins Jan. 1, 2014, or after. After March 31 you won't be able to purchase a marketplace plan until the next open enrollment period, which begins Oct. 15, 2014. (Health insurance plans offered through employers have their own open enrollment periods, usually in the fall.)

Which drugs will be covered and what they will cost under marketplace plans is unknownWhich drugs will be covered and what they will cost under marketplace plans is unknown. Information about specific drug benefits won't be released until the end of September 2013 at the earliest.

According to the Centers for Disease Control and Prevention, 48.5 percent of people have used at least one prescription drug in the last month. If you purchase a plan through a state marketplace, it's important to understand how your drug benefits will work.

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Obamacare plans and medications

Obamacare plans are going to be named based on the levels bronze, silver, gold and platinum.

"Some of the carriers actually had to worsen their benefits under the plans to get a bronze level plan," says Massi.

A bronze or silver plan may require very high copays for prescription coverage while having very affordable premiums.

Where currently someone might pay $10 for a generic drug, that person could pay $25 or $30 with a bronze plan. The cheaper the premiums, the higher the copays and deductibles at each plan level. Many Obamacare plans will also apply the deductible to drug costs, so the full price of drugs must be paid by you until the deductible is satisfied.

Specialized drugs, or what are called Tier 4 drugs, such as very expensive medications for cancer and other complex medical conditions, may be quite costly. Patients with Obamacare plans will pay for these drugs by a percentage of cost. Coinsurance will be the most common method of cost-sharing required for specialty drugs among ObamaCare plans.

Coinsurance fees are a percentage of the total price of the drug that is the enrollee's responsibility to pay. Someone currently paying 10 percent to 15 percent for a cancer or multiple sclerosis drug may be bumped up to 30 percent to 40 percent of the drug's cost, depending on the level of plan purchased.

"In some cases that could equate to $1,500 or more in drug costs monthly," says Massi. This is one way these plans will help control costs: higher copays and higher coinsurance for specialized drugs.

Plans and formularies

While every insurance carrier's formulary is different, there shouldn't be an issue with the availability of drugs. If a drug is deemed medically necessary and is not labeled experimental, members should be able to obtain it.

However, find out if the medications you take are on each plan's formulary and, if they are, what the copay is, says David Hom, chief solutions and business development officer at SCIO Health Analytics, a predictive health care analytics company headquartered in Hartford. And if the medications you need aren't in the insurer's formulary, then what?

You could ask your doctor to switch the prescription to one in the carrier's formulary, pay out of pocket, or re-evaluate whether you need to choose a higher-level policy with better drug coverage benefits.

Choosing a health insurance policy

People who take multiple drugs -- like daily maintenance medications for high blood pressure or high cholesterol, episodic drugs, like antibiotics or antidepressants, or specialized medications for serious illness -- must weigh the drug benefits of their health plans carefully before choosing.

"My fear is most people won't really understand the complications until they start using the system and then around March say, 'Wow, I didn't know I had to pay this much for my prescriptions,'" says Hom.

If you choose a plan that doesn't work for you, you're stuck with it for that year's plan period.

Here's advice for shopping on a marketplace for an Obamacare plan when it comes to drug coverage:

  • Understand what you're buying.
  • Talk to someone within the plan to ask specific questions about drug coverage.
  • Look at how many medications you and your family take and whether the plan's formulary covers them.
  • Find out what your copay or deductible will be for drugs.
  • Understand your coinsurance payment for specialized Tier 4 medications.

Remember, you can still buy an individual plan outside the exchanges. Health insurers will continue offering a variety of plans with various levels of prescription drug coverage.

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