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Limited payer prescription drug coverage pinches patients

As payers limit prescription drug coverage, they are increasingly setting up restrictions like prior authorizations and step therapy.

Sara Heath
By
Published: 12 May 2025

Across commercial payers, Medicare and Medicaid, healthcare consumers are facing what a recent GoodRx report is calling "the big pinch": a crossroads of health insurance coverage for certain drugs and a litany of cost containment strategies that restrict access.

Indeed, nearly a fifth of all medications receive no coverage at all under the typical commercial insurance plan, the report revealed. Further, 35% of the medications that are covered under the typical plan come with access restrictions, like prior authorizations and step therapy.

This trend persists to varying degrees when looking at public health insurance coverage options, with Medicare representing some of the strictest barriers to medications and Medicaid boasting broad coverage but ample use of access restrictions.

These findings come as healthcare experts across the industry eye the biggest barriers to healthcare treatments and medication adherence. It's long been accepted that cost is among the biggest hurdles when it comes to prescription drug access, but this latest report underscores the way complex health insurance plans can also get in the way.

A fifth of meds left without commercial health plan coverage

As noted above, around a fifth (21%) of medications are not covered by the average commercial health plan, leaving just under 80% of prescriptions being covered for the typical enrollee.

This alone is notable, considering that nearly half of all Americans have commercial health insurance, such as the plans offered by their employers or purchased on the individual market. GoodRx pointed out that members could face the full cost for a one in five prescriptions even after paying their insurance premiums.

But the limits don't end there, the report continued.

Just over one-third (35%) of medicines covered by commercial health plans come with restrictions like prior authorizations and step therapy. This is problematic, the GoodRx authors noted, considering previous company research showing that 30% of folks facing insurance restrictions decided to access a different -- potentially less effective -- drug, pay cash or skip the medication.

"The reality for many is that coverage doesn't automatically mean access," the report authors said. "As plans tighten formularies and increase utilization management, patients are left navigating a bureaucratic maze in search of relief."

Medicare beneficiaries face steep prescription barriers

The GoodRx report showed that Medicare beneficiaries face bigger drug access issues, with Medicare Part D covering fewer drugs than commercial plans and putting in place more restrictions.

Overall, Medicare Part D covers 56% of prescription medications. However, only about half (51%) of those medications come without prior authorization and step therapy restrictions. Notably, drugs with restrictions include those in what are called "protected classes."

Protected class medications include the following:

  • Antidepressants.
  • Antipsychotics.
  • Anticonvulsants.
  • Immunosuppressants.
  • Antiretrovirals.
  • Antineoplastics.

Medicare must cover these drugs because they are clinically important or there is potential for great harm if patients cannot access them when needed. However, although Medicare covers these protected classes, it also potentially limits access by putting in place restrictions.

Medicaid offers best drug accessibility to members

Of the three insurance types analyzed, Medicaid offers the greatest access to members, although roadblocks remain.

Indeed, the typical state Medicaid plan covers 97% of prescription drugs, far surpassing both Medicare and the commercial insurance sector.

However, those drugs come with some red tape, the report authors said. Only 37% of covered medications come without access restrictions. For the remaining 63%, members must either complete step therapy or prior authorizations, or else pay for the drug out-of-pocket or forego the treatment.

"Such restrictions are part of a broader pattern GoodRx Research has identified: Insurance plans are covering fewer medications overall, while placing more conditions on access to those they do cover," the report authors said. "That's left many Americans caught in what we've called the Big Pinch — where price is only part of the problem, and the real hurdle becomes navigating increasingly burdensome policies."

Sara Heath has covered news related to patient engagement and health equity since 2015.

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