With prescription drug costs rising, employers and insurers are placing more of the burden on consumers, especially those with health conditions that require expensive brand-name drugs.

If you're in an employer-sponsored or Medicare Part D plan with higher co-pays or co-insurance, you may have to pay thousands of dollars a year for life-saving prescription drugs.

Insurance companies typically classify prescription drugs into tiers based on the type of drug and the co-pay or co-insurance you are charged for a drug in that category. Some health insurance plans have only one tier, with one co-payment regardless of the type of drug, while others have two or three, with generic drugs typically having lower co-pays than brand name drugs.

More companies add Tier 4
In the past several years, more insurance companies are adding Tier 4 and in some cases Tier 5, which typically include biologics -- biotechnology drugs with exceptionally high prices -- and lifestyle drugs such as those for erectile dysfunction, baldness and obesity.

More than 75 percent of employees covered by health insurance with a prescription drug benefit have three or four payment tiers, and the percentage of workers covered facing Tier 4 cost-sharing plans has increased from 3 percent in 2004 to 7 percent in 2007, according to a survey of employer health benefits conducted in 2007 by the Kaiser Family Foundation and the Health Research and Educational Trust.

The impact? Devastating, especially for consumers with chronic or life-threatening illness, who are faced with the prospect of financial ruin.

"Cancer patients deserve the right to fight for their lives without risking their own and their families' financial security," says Christy Schmidt, senior director of policy at the American Cancer Society.

"A study by Kaiser and Harvard last year looked at issues of adequacy in health insurance for cancer patients and found that one in five who had insurance used all or most of their savings during the course of their treatment."

With life spans increasing, one in three women and half of all men will get cancer in their lifetime, according to the American Cancer Society. Couple those statistics with other life-threatening and chronic conditions experienced by hundreds of thousands of Americans and you've got a recipe for a major problem. (To compare insurance policies and quotes, visit Insureme.com, a Bankrate company.)

The fear among health advocacy and consumer rights activists is that higher-tiered pricing will continue to make inroads in health insurance plans, transforming the newest medications -- those that offer the best hope to many patients with cancer, AIDS, multiple sclerosis and other conditions -- into costly burdens that are, in essence, unaffordable to all but the wealthy.