Not as much as you might think. Health insurance companies often point toward more complex prescription drug formularies that require patients to shoulder higher out of pocket costs as a way to keep coverage affordable. The fact is that requiring patients to pay more upfront in the form of deductibles and copays does little to bring down premiums. But it does impact your out-of-pocket costs significantly.
If your monthly premiums aren’t affected much by cost-sharing and deductible requirements, what does affect them? Research from Avalere has found that spending for hospital land healthcare provider services are the largest drivers of insurance premium growth—not prescription drugs, which represent only 14% of premium growth. This amount is largely consistent with drugs’ share of healthcare spending, which has been remarkably stable for decades. In contrast, hospital outpatient spending (services performed at a hospital not requiring an overnight stay) accounted for 29.9% of planned premium hikes in 2017, while professional services (e.g. doctor visits, lab work) accounted for 27.7%. A previous 2015 study from Avalere found the same trend. It confirmed that two-thirds of premium increases are directly attributed to hospitals and doctors—not prescription drugs.
So let’s see exactly how changes to your insurance plan coverage for drugs could really impact you and your premiums.
The tool below demonstrates how the structure of your insurance plan makes the biggest different on your monthly costs—not just your premiums, but your total out-of-pocket costs.