The 2019 Milliman Medical Index (MMI), calculated annually by Milliman, Inc., looks at healthcare costs for individuals or families covered by an employer-sponsored preferred provider plan. The $28,386 family-of-four estimate represents an increase of 3.8% from the year prior; the increase the year before that was 2.9%. The individual cost was $6,348, also up 3.8% from the previous year.
MMI is defined by five components: inpatient/outpatient care; pharmacy; professional services and other services. Prescription drug costs continue to be a big part of the healthcare MMI story, says the company, “though this year they are playing a different role.”
“This year’s 2.1% prescription cost increase helps to moderate the overall healthcare cost trend,” said Sue Hart, co-author of the MMI. “Still, we know from prior years how volatile prescription drug prices can be.”
Although not core to the MMI report, a discussion of rebates shows how complex unwinding the current system can be. First, it’s worth noting that “In 2018, rebates received as a percentage of prescription drug claims reached 19.5%, up from 10.2% in 2013. With rebates nearly doubling over a five-year period, rebates have an increasingly large impact on total healthcare costs.”
Rebates provided to the PBM and passed on to the insurer generally lead to lower premiums for all covered lives; one of the alternatives under discussion these days is to deliver the rebate directly to the patient who is using the drug—a point of sale (POS) rebate, which some PBMs are beginning to provide. While the patient can benefit from a lower coinsurance cost, that patient might also reach a plan’s out-of-pocket maximum more slowly, resulting in the effective cancellation of some or all of the savings, while still potentially paying a higher annual premium.
“Given all the issues at hand, careful evaluation of POS rebate programs is needed as these options continue to become more prevalent in the market,” concludes the report.