Blog Post

Despite Coverage Requirements, Insurers Added Barriers to Access for Drugs

Chart of the Day: Medicare, Medicaid, and Insurers Replaced High Costs With More Hurdles, LDI Expert Finds

July 8, 2026

By:

Christine Weeks

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A line graph titled "Percentage of Drugs Subject to Coverage Restrictions (2011-2019)." The x-axis represents each year between 2011 and 2019 and the y-axis represents 0-100% of drugs subject to coverage restrictions. The percentage of drugs excluded from formularies, drugs with administrative restrictions, and any coverage restriction increased over the study period. The percentage of drugs placed on the nonpreferred tier decreased over the study period.

Prescription drug costs and patient access have long been major concerns. With the Inflation Reduction Act, policymakers cut patients’ drug costs by limiting out-of-pocket expenses and mandating coverage of certain drugs. New evidence suggests that, even before the legislation took effect, insurers were already changing their formularies and shifting from financial to nonfinancial mechanisms to restrict access to costly prescription drugs.

LDI Fellow Michael Anne Kyle and colleagues analyzed national trends in formulary coverage restrictions for the most expensive brand-name prescription drugs without generic competitors that were dispensed through pharmacies from 2011 to 2019 across Medicare, Medicaid, employer-sponsored insurance, and Affordable Care Act health insurance exchange plans.

As the chart shows, overall drug formulary restrictions increased, and the types of hurdles changed over time. The percentage of drugs excluded from formularies rose slightly. However, the percentage of drugs subject to administrative restrictions increased dramatically, while the percentage of drugs placed on nonpreferred tiers declined. As a result, beneficiaries paid less for covered drugs, but they likely encountered more paperwork or other challenges when accessing their medications.

Trend Masked Differences in Formulary Generosity Among Types of Insurance

The types of barriers varied by insurance type. Generally, commercial insurance imposed fewer coverage restrictions than Medicare, Medicaid, and health insurance exchange plans. Yet administrative restrictions more than doubled, and the percentage of drugs on nonpreferred tiers fell only modestly among commercial plans.

Medicare Imposed More Financial Restrictions

Among Medicare plans, there were few exclusions among protected drugs that plans are required to cover, while more than half of the drugs in nonprotected classes were subject to formulary exclusions. Drugs in protected classes were much more likely than those in nonprotected classes to be subject to administrative restrictions and placed on nonpreferred tiers.

Medicaid Created More Administrative Burden

The researchers found a more dramatic increase in administrative restrictions among Medicaid plans than any other plan type. Medicaid plans generally cannot exclude drugs and have limited ability to steer use with financial barriers.

Taken together, these findings suggest that coverage mandates, such as those imposed on all Medicaid formularies and on drugs in Medicare protected classes, are associated with higher rates and growth of administrative coverage restrictions.

The study, “Trends in Prescription Drug Coverage Restrictions in Medicare, Medicaid, and Commercial Insurance Plans, 2011-2019” was published in Health Affairs Scholar in March 2026 by Michael Anne Kyle, Pragya Kakani, Samantha L. Burn, and Luca Maini.