The Impact of Sharing Drug Rebates at the Point of Sale on Out-of-Pocket Payments for Enrollees in Employer-Sponsored Insurance.

OBJECTIVES: This study aimed to estimate the impact of sharing drug rebates at the point of sale on out-of-pocket spending by linking estimated rebates to administrative claims data for employer-sponsored insurance enrollees in 2018. METHODS: We applied the drug rebate rate to the retail price of each brand name drug fill, allocated the reductions to out-of-pocket spending based on cost-sharing provisions, and aggregated each individual's out-of-pocket spending across drug fills. We assumed that generic drugs have no rebates for employer-sponsored insurance. We assessed the impact of sharing rebates at the point of sale on out-of-pocket spending overall, for the therapeutic classes and specific drugs with the highest average out-of-pocket spending per user, and by health plan type. RESULTS: Across 4 simulations with different assumptions about the degree of cross-fill effects, we found that 10.4% to 12.2% of enrollees in our sample would have realized savings on out-of-pocket spending if rebates were shared to the point of sale. Among those with savings, approximately half would save $50 or less, and 10% would save > $500 annually. We calculated that a premium increase of $1.06 to $1.41 per member per month among the continuously enrolled, insured population would be sufficient to finance the out-of-pocket savings in our sample. CONCLUSIONS: Our study suggests that, for a small percentage of enrollees, sharing drug rebates at the point of sale would likely improve the affordability of high-priced brand name drugs, especially drugs that face significant competition.

Net Spending On Retail Specialty Drugs Grew Rapidly, Especially For Private Insurance And Medicare Part D.

Specialty drugs are expensive, but spending on specialty drugs is difficult to measure because of proprietary rebate payments by manufacturers to insurers, pharmacy benefit managers, and state Medicaid agencies. Our study extends recent research that documented growing use of and spending on specialty drugs by incorporating manufacturer rebates for both public and private payers. Although specialty drugs make up a small portion of retail prescriptions filled, we found that they accounted for 37.7 percent of retail and mail-order prescription spending net of rebates in 2016-17. From 2010-11 to 2016-17, spending net of rebates tripled for Medicare Part D beneficiaries and more than doubled for people with private insurance. Medicaid spending net of rebates rose more slowly. These results can help inform decision makers as they strive to balance the costs and benefits of innovative drugs.

Decomposing changes in the growth of U.S. prescription drug use and expenditures, 1999-2016.

OBJECTIVE: To analyze factors associated with changes in prescription drug use and expenditures in the United States from 1999 to 2016, a period of rapid growth, deceleration, and resumed above-average growth. DATA SOURCES/STUDY SETTING: The Medical Expenditure Panel Survey (MEPS), containing household and pharmacy information on over five million prescription drug fills. STUDY DESIGN: We use nonparametric decomposition to analyze drug use, average payment per fill, and per capita expenditure, tracking the contributions over time of socioeconomic characteristics, health status and treated conditions, insurance coverage, and market factors surrounding the patent cycle. DATA COLLECTION/EXTRACTION METHODS: Medical Expenditure Panel Survey data were combined with information on drug approval dates and patent status. PRINCIPAL FINDINGS: Per capita utilization increased by nearly half during 1999-2016, with changes in health status and treated conditions accounting for four-fifths of the increase. In contrast, per capita expenditures more than doubled, with individual characteristics only explaining one-third of the change. Other drivers of spending during this period include the changing pipeline of new drugs, drugs losing exclusivity, and changes in generic competition. CONCLUSIONS: Long-term trends in treated conditions were the fundamental drivers of medication use, whereas factors involving the patent cycle accelerated and decelerated spending growth relative to trends in use.

Despite Coverage Gains, One-Third Of People In Small-Firm Low-Income Families Were Uninsured In 2014-15.

Obtaining health insurance coverage has historically been challenging for workers at small firms and the self-employed. Using data from the Medical Expenditure Panel Survey, we found that the overall uninsurance rate for these workers and their families declined by 5 percentage points over the past decade, but one-third of those with lower incomes remained uninsured in 2014-15.

High-Deductible Health Plan Enrollment Increased From 2006 To 2016, Employer-Funded Accounts Grew In Largest Firms.

Over the past decade, employers have increasingly turned to high-deductible health plans (HDHPs) to limit health insurance premium growth. We used data from private-sector establishments for 2006 and 2016 from the Medical Expenditure Panel Survey-Insurance Component to examine trends in HDHP enrollment and heterogeneity in HDHPs by firm size. We studied insurance plan offerings along the following dimensions: whether employers fund accounts to help defray employees' out-of-pocket health care spending, the availability of non-HDHP plan choices, and single and family deductible levels. We extend the literature by examining these characteristics by detailed firm-size categories and by including all plans with deductibles that met or exceeded Internal Revenue Service thresholds to be qualified for health savings accounts. We found that in 2016, 78.0 percent of HDHP enrollees in the smallest firms (those with fewer than 25 employees) lacked an employer-funded account, compared to 35.2 percent in the largest firms (those with 1,000 or more employees). Overall, HDHP enrollees in the largest firms had significant advantages relative to workers in smaller firms along all of the dimensions examined.

Substantial Churn In Health Insurance Offerings By Small Employers, 2014-15.

New data for 2014-15 from the Medical Expenditure Panel Survey-Insurance Component longitudinal survey show substantial churn in insurance offers by small employers (those with fifty or fewer workers), with 14.6 percent of employers that offered insurance in 2014 having dropped it in 2015 and 5.5 percent of those that did not offer it adding coverage.

The availability and marginal costs of dependent employer-sponsored health insurance.

In this study, we examine differences by firm size in the availability of dependent coverage and the incremental cost of such coverage. We use data from the Medical Expenditure Panel Survey - Insurance Component (MEPS-IC) to show that among employees eligible for single coverage, dependent coverage was almost always available for employees in large firms (100 or more employees) but not in smaller firms, particularly those with fewer than 10 employees. In addition, when dependent coverage was available, eligible employees in smaller firms were more likely than employees in large firms to face two situations that represented the extremes of the incremental cost distribution: (1) they paid nothing for single or family coverage or (2) they paid nothing for single coverage but faced a high contribution for family coverage. These results suggest that firm size may be an important factor in policy assessments, such as analyses of the financial implications for families excluded from subsidized Marketplace coverage due to affordable offers of single coverage or of potential rollbacks to public coverage for children.

Does increased adherence to medications change health care financial burdens for adults with diabetes?

BACKGROUND: The aim of the present study was to investigate increased out-of-pocket drug costs and financial burdens of achieving adherence to oral antidiabetic medications and medications for prevalent comorbidities. METHODS: Concurrent adherence to medications, out-of-pocket drug costs, and financial burdens were measured among non-elderly adults with diabetes in the Medical Expenditure Panel Survey. "Financial burden" was defined as spending on health care exceeding 10% of family income. This study simulated the increased out-of-pocket drug costs and financial burdens that would result if non-adherent adults in our sample had obtained sufficient medications to be adherent. For each adult, for all therapeutic classes in which they were non-adherent, we calculated the additional days supplied required to become adherent, as well as out-of-pocket spending on these additional days supplied. RESULTS: Approximately one-quarter adhered to all required medications. Among non-adherent adults with employer-sponsored insurance and public insurance, the mean annual out-of-pocket drug costs of achieving adherence were US$171 and US$68, respectively, which was generally affordable. However, 35.6% of the uninsured lived in families that spent 10% or more of their income on health care. Mean simulated additional out-of-pocket drug costs of achieving adherence were US$310 for the uninsured. These additional drug costs would increase those spending 10% or more of income to 39.6% of the uninsured. CONCLUSIONS: Efforts to reduce the costs faced by the uninsured and insured will make adherence more affordable and, therefore, more attainable for some adults with diabetes.

Many families may face sharply higher costs if public health insurance for their children is rolled back.

Millions of US children could lose access to public health care coverage if Congress does not renew federal funding for the Children's Health Insurance Program (CHIP), which is set to expire September 30, 2015­the end of the federal fiscal year. Additional cuts in public coverage for children in families with incomes above 133 percent of the federal poverty level are possible if the Affordable Care Act's "maintenance of effort" provisions regarding Medicaid and CHIP are allowed to expire as scheduled in 2019. The potential for a significant rollback of public coverage for children raises important policy questions regarding alternative pathways to affordable and high-quality coverage for low-income children. For many children at risk of losing eligibility for public coverage, the primary alternative pathway to coverage would be through their parents' employer-sponsored insurance, yet relatively little is known about the cost and quality of that coverage. Our estimates, based on data from the Insurance Component of the 2012 and 2013 Medical Expenditure Panel Surveys, show that many families would face sharply higher costs of covering their children. In many cases, the only employer-sponsored coverage available would be a high-deductible plan.

Racial and ethnic differences in childhood asthma treatment in the United States.

OBJECTIVE: To examine racial-ethnic differences in asthma controller medication use among insured U.S. children. DATA SOURCES: Linked nationally representative data from the Medical Expenditure Panel Survey (2005-2008), the 2000 Decennial Census, and the National Health Interview Survey (2004-2007). STUDY DESIGN: The study quantifies the portion of racial-ethnic differences in children's controller use that are attributable to differences in need, enabling and predisposing characteristics. PRINCIPAL FINDINGS: Non-Hispanic black and Hispanic children were less likely to use controllers than non-Hispanic white children. Blinder-Oaxaca decomposition results indicated that observable characteristics explain less than 40 percent of the overall differential in controller use between non-Hispanic whites and non-Hispanic blacks. In contrast, observable characteristics explain more than two-thirds (71.3 percent) of the overall non-Hispanic white-Hispanic differential in controller use. For non-Hispanic blacks, a majority of the explained differential in controller use were attributed to enabling characteristics. For Hispanics, a significant portion of the explained differential in controller use was attributed to predisposing characteristics. In addition, a larger portion of the differential in controller use was explained by observable characteristics for publicly insured non-Hispanic black and Hispanic children. CONCLUSIONS: The large observed differences in controller use highlight the continuing challenges of ensuring that all U.S. children have access to quality asthma care.

Tax subsidies for employer-sponsored health insurance: updated microsimulation estimates and sensitivity to alternative incidence assumptions.

OBJECTIVE: To estimate 2012 tax expenditures for employer-sponsored insurance (ESI) in the United States and to explore the sensitivity of estimates to assumptions regarding the incidence of employer premium contributions. DATA SOURCES: Nationally representative Medical Expenditure Panel Survey data from the 2005-2007 Household Component (MEPS-HC) and the 2009-2010 Insurance Component (MEPS IC). STUDY DESIGN: We use MEPS HC workers to construct synthetic workforces for MEPS IC establishments, applying the workers' marginal tax rates to the establishments' insurance premiums to compute the tax subsidy, in aggregate and by establishment characteristics. Simulation enables us to examine the sensitivity of ESI tax subsidy estimates to a range of scenarios for the within-firm incidence of employer premium contributions when workers have heterogeneous health risks and make heterogeneous plan choices. PRINCIPAL FINDINGS: We simulate the total ESI tax subsidy for all active, civilian U.S. workers to be $257.4 billion in 2012. In the private sector, the subsidy disproportionately flows to workers in large establishments and establishments with predominantly high wage or full-time workforces. The estimates are remarkably robust to alternative incidence assumptions. CONCLUSIONS: The aggregate value of the ESI tax subsidy and its distribution across firms can be reliably estimated using simplified incidence assumptions.

Changes in pharmaceutical treatment of diabetes and family financial burdens.

Recent changes in diabetes treatment guidelines and the introduction of new, more expensive pharmaceuticals appear to increase the financial challenges for nonelderly adults with diabetes. The authors used Medical Expenditure Panel Survey data to examine changes in the prevalence of diabetes and comorbidities, diabetes treatment, financial burdens, and the relationship between high financial burdens and patient characteristics. From 1997-1998 to 2006-2007, the total number of nonelderly adults treated for diabetes nearly doubled, from 5.4 to 10.7 million, and the proportion of diabetes patients using multiple drugs to treat their condition increased significantly. About a fifth of diabetes patients spent 10% or more of their family income on health care, and about one in nine spent 20% or more of their family income on health care. In 2006-2007, diabetes patients who were older, female, in poor health, or lacked insurance were more likely than others to have high burdens.

Health expenditure estimation and functional form: applications of the generalized gamma and extended estimating equations models.

Health-care expenditure regressions are used in a wide variety of economic analyses including risk adjustment and program and treatment evaluations. Recent articles demonstrated that generalized gamma models (GGMs) and extended estimating equations (EEE) models provide flexible approaches to deal with a variety of data problems encountered in expenditure estimation. To date there have been few empirical applications of these models to expenditures. We use data from the US Medical Expenditure Panel Survey to compare the bias, predictive accuracy, and marginal effects of GGM and EEE models with other commonly used regression models in a cross-validation study design. Health-care expenditure distributions vary in the degree of heteroskedasticity, skewness, and kurtosis by type of service and population. To examine the ability of estimators to address a range of data problems, we estimate models of total health expenditures and prescription drug expenditures for two populations, the elderly and privately insured adults. Our findings illustrate the need for researchers to examine their assumptions about link functions: the appropriate link function varies across our four distributions. The EEE model, which has a flexible link function, is a robust estimator that performs as well, or better, than the other models in each distribution.

Explaining racial and ethnic differences in children's use of stimulant medications.

OBJECTIVES: To document and explain racial/ethnic differences in the use of stimulant drugs among US children. DATA AND METHODS: We use a nationally representative sample of children ages 5-17 years old from the Medical Expenditure Panel Survey (MEPS) for the years 2000-2002. We estimate race-specific means and regressions to highlight differences across groups in individual/family characteristics that may affect stimulant use and differences in responses to these characteristics. Then, we use Oaxaca-Blinder decomposition methods to quantify the portion of differential use explained by differences in individual/family characteristics. Finally, we use pooled regressions with race/ethnicity interactions to formally test the hypothesis that responses to perceived mental health and behavioral problems vary across groups. RESULTS: White children are about twice as likely to use stimulants as either Hispanic or Black children. Differences in individual/family characteristics account for about 25% of the difference between whites and Hispanics, but for none of the difference between whites and blacks. Pooled regressions show that racial/ethnic gaps in stimulant use persist among children with otherwise similar reported mental health conditions. CONCLUSIONS: Our finding that the majority of racial/ethnic differences in children's stimulant use is explained by differences in responses to individual/family characteristics highlights the importance of further research to examine the reasons for these differences. It is striking that children with otherwise similar reports of mental health problems have such different outcomes in terms of stimulant use. Potential explanations range from discrimination to cultural differences by race/ethnicity or community.

Trends in prescription drug expenditures by Medicaid enrollees.

OBJECTIVE: As prescription drug expenditures consume an increasingly larger portion of Medicaid budgets, states are anxious to control drug costs without endangering enrollees' health. In this report, we analyzed recent trends in Medicaid prescription drug expenditures by therapeutic classes and subclasses. Identifying the fastest growing categories of drugs, where drugs are grouped into clinically relevant classes and subclasses, can help policymakers decide where to focus their cost containment efforts. METHODS: We used data from the Medical Expenditure Panel Survey linked to a prescription drug therapeutic classification system, to examine trends between 1996/1997 and 2001/2002 in utilization and expenditures for the noninstitutionalized Medicaid population. We separated aggregate trends into changes in population with use and changes in expenditures per user, and percent generic. We also highlighted differences within the Medicaid population, including children, adults, disabled, and elderly. RESULTS: We found rapid growth in expenditures for antidepressants, antipsychotics, antihyperlipidemics, antidiabetic agents, antihistamines, COX-2 inhibitors, and proton pump inhibitors and found evidence supporting the rapid take-up of new drugs. In some cases these increases are the result of increased expenditures per user and in other cases the overall growth also comes from an increase in the population with use. CONCLUSIONS: Medicaid programs may want to reassess their cost-containment policies in light of the rapid take-up of new drugs. Our analysis also identifies areas in which more information is needed on the comparative effectiveness of new versus existing treatments.

Gender differences in drug use and expenditures in a privately insured population of older adults.

We examine gender differences in use and expenditures for prescription drugs among Medicare and privately insured older adults aged 65 and over, using data on a nationally representative sample of prescription drug purchases collected for the Medical Expenditure Panel Survey Household Component. Overall, women spent about $1,178 for drugs, about 17% more than the $1,009 in average expenditures by men. Older women constituted 50.7% of the population and had average annual aggregate expenditures for prescribed medicines of $6.93 billion compared to $5.77 billion for men. Women were more likely than men to use drugs from a number of therapeutic classes-analgesics, hormones and psychotherapeutic agents-and therapeutic subclasses-thyroid drugs, COX-2 inhibitors and anti-depressants. Women also had higher average prescriptions per user for a number of therapeutic classes-hormones, psychotherapeutic agents and analgesics-and therapeutic subclasses-anti-diabetic drugs and beta blockers. Prescribed medications are, arguably, the most important healthcare technology in preventing illness, disability, and death in older adults. It is critical that older women and men have proper access to prescribed medicines. Given the financial vulnerability of this priority population, particularly women, the expanded drug coverage available under the Medicare Modernization Act is of particular relevance in meeting this goal.

New cardiovascular drugs: patterns of use and association with non-drug health expenditures.

The potential role of new drugs in reducing expenditures for non-drug health services has received considerable attention in recent policy debates. We estimate expenditure models to determine whether the use of newer drugs to treat cardiovascular conditions is associated with lower (or higher) non-drug expenditures for these conditions. We fail to substantiate the findings of previous research that newer drugs are associated with reductions in non-drug expenditures. We find, however, that increases in the number of drugs used, or the mix of drugs of different ages, are associated with increased non-drug expenditures and find that the number or mix of drugs used are important confounders in the estimated association between drug age and non-drug expenditures.

Looking inside the nation's medicine cabinet: trends in outpatient drug spending by Medicare beneficiaries, 1997 and 2001.

We examine trends in outpatient prescription drug spending by the Medicare civilian, noninstitutionalized population in 1997 and 2001 using nationally representative data from the Medical Expenditure Panel Survey. We find that the 72 percent increase in drug spending over this period, in excess of price inflation for all goods and services, is primarily attributable to increases in the number of prescriptions per drug user and in the price per prescription. We also find, however, that an increase in the number of users is the primary reason for growth in a number of the fastest-growing subclasses of drugs.