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CCH® BENEFITS — 10/14/11

Some 70% Of Private Industry Workers Had Access To Outpatient Prescription Drug Coverage In 2010: BLS

from Spencer’s Benefits Reports: In March 2010, 69% of all private industry workers had access to outpatient prescription drug coverage, according to the Bureau of Labor Statistics (BLS). The takeup rate, which is the percentage of workers with access to outpatient prescription drug coverage who actually participated in this benefit, was 73%. Outpatient prescription drug coverage varied widely by worker and establishment characteristics, the BLS noted in the recently released Program Perspectives on Outpatient Prescription Drug Coverage.

Higher wage workers (the highest 25% of wage earners) had greater access and participation in outpatient prescription drug coverage than lower wage workers (the lowest 25%), 70% versus 21%. The takeup rate for low-wage workers was significantly less than that for high-wage workers, meaning that a larger percentage of lower wage workers did not accept coverage.

Outpatient prescription drug coverage varied widely by worker characteristics. Private industry workers in management, professional, and related occupations had nearly double the access rate of service workers, and participation was 65% and 27%, respectively. Full-time worker participation (62%) was significantly higher than part-time worker participation (13%). Union workers also had greater access (89% versus 67%) and participation rates (75% versus 47%) than did non-union workers.

Outpatient prescription drug coverage also varied by firm size. Workers in firms with 500 or more workers had a 67% participation rate, compared with 38% for smaller firms with 1 to 49 workers.

Coverage Characteristics

Generic and brand-name drugs are still covered in nearly all outpatient prescription drug plans. In 2009, 100% of private industry workers participating in outpatient prescription drug plans had coverage for generic drugs and 99% had coverage for brand-name drugs, a trend that has continued over the past 15 years. Seventy-nine percent of the private industry workers participating in outpatient prescription drug plans had coverage for mail-order drugs, while 74% of workers received higher reimbursement for formulary drugs.

Also over the past 15 years, higher reimbursement for generic drugs trended upward, starting at 41% in 1995 and rising to 89% in 2005. In 2009, all private industry workers had coverage for generic drugs. Coverage for mail-order drugs also has risen considerably over the past 15 years, from 32% in 1995 to 79% in 2009. The percentage of coverage for higher reimbursed formulary drugs rose from 44% in 2005 to 74% in 2009.

Most workers are in plans that require a copayment for each prescription—a set amount, rather than a proportion of the prescription’s price. Eighty-two percent of all workers had copayment restrictions for generic drugs, the median copayment of which was $10 per prescription. Seventy-nine percent of workers had copayment restrictions for brand-name drugs, the median copayment of which was $25 per prescription. Median copayments for generic drugs and for brand-name drugs were similar at $10 and $25, respectively, for full- and part-time workers, for union and nonunion members, by industry, and by firm size, the BLS noted. Those plan participants who are not subject to a copayment may have other limits imposed, such as paying a proportion of the cost of the drug.

These data are from the National Compensation Survey. For more information, visit http://www.bls.gov.

For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer's Benefits Reports.

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