PhRMA, the pharmaceutical industry group which played a key role in President Obama’s secret deal making to craft the Affordable Care Act, wants you to know the “silver” insurance plans people are buying under the program kinda suck.
Today they released a new report from Milliman which shows the out-of-pocket costs for so called “silver” level coverage are significantly higher than for typical employer provided insurance. From Milliman Report:
- Typical employer-sponsored plans are significantly more generous than typical Silver plans found in HIX. In a typical Silver plan, the member cost sharing (prior to any government subsidies) is 38% more than the typical cost sharing in an employer plan in aggregate. The majority of HIX enrollment, as of February 2014, is in Silver plans (62%).
- Silver plans offered on HIX are nearly four times more likely to have a single combined deductible for medical and pharmacy benefits than typical employer-sponsored plans (46% of the time compared to 12%, respectively).
- Silver plans with combined deductibles impose significantly higher member cost sharing for pharmacy benefits than a typical employer-sponsored plan (130% higher)
While I have little sympathy for the drug industry, this report does draw attention to a subject I don’t think is talked about. The number of metal tiers on the exchange can be misleading. The quality of coverage is often much lower than typical employer plans and many could be surprised by what they need to pay when they try to use their new plans. Given the incredible complexity involved in selecting a plan, I strongly suspect many people didn’t choose their best option.
Of course, I imagine the drug industry solution is to turn the money faucet on for them because that way some help is sure to splash onto regular people. My solution would be to stop the systematic overcharging by drug companies and hospitals so we could provide way better coverage for the same premium.