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Disease Matters: Comparing Prescription Drug Benefits in Covered California Plans

Avalere Health

How hard is it for consumers in Covered California plans to get prescription drugs? It depends on the condition, which reflects trends in the larger insurance market.

Pills spilling out from a larger pill.

In 2014, prescription drug benefits varied greatly among the health plans offered through Covered California, the state's health insurance marketplace. There were also differences in coverage between these plans and California's most common employer-based health plans. In a project supported by CHCF, Avalere Health compared these new individual market plans to one another and to employer-sponsored insurance, the coverage source for most Californians. Researchers examined 2014 pharmacy benefits and how easily consumers were able to compare their options.

The report offers insights into how barriers to necessary prescription drugs might further be reduced and how consumer access to drug cost and coverage information could be improved across the individual market. While this report focuses on health plans offered through Covered California, many of the issues it raises reflect larger trends in formulary design in the broader individual market.

Highlights of the research findings:

  • For consumers with relatively limited drug needs, Covered California plans provided comprehensive, affordable access to the most commonly used medications, which were predominantly generic drugs.
  • Among the different plans offered on Covered California, formulary breadth varied widely.
  • Covered California plans were more aggressive than selected employer plans in managing drug use through administrative controls, such as prior authorization and step therapy.
  • Products used to treat complex chronic conditions, especially those for autoimmune disorders like rheumatoid arthritis, were disproportionately placed on the specialty tier in Covered California plans compared to the selected employer plans.
  • Comprehensive information on drug coverage and out-of-pocket costs was difficult to find. This lack of access could be a barrier to consumers who wish to make informed purchasing decisions.

The full report, as well as a zipped file with the data used in the report, can be found under Document Downloads. A chart deck with additional data is available through External Links.

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