Some insurance policies remind me of pay-day lending. People are strapped for cash and prescriptions are expensive. So, we buy insurance policies with “baked-in” prescription co-pay plans. Is it efficient? NO. Is it expensive? YES!
It is like pay day lending. You can’t afford the short-term cash flow challenge (the copay solves that) so you end up buying a much more expensive policy than what you really need.
Employers often do the same thing because they don’t want to impose on their workforce the worry or challenge of paying the full cost for their prescriptions at the point of sale.
This is a real problem. So we developed a solution.
Several years ago we partnered with our clients and a group of pharmacies. This partnership allows employees to pay ONLY their share of the costs at the time of purchase. The employer pays the balance using a program we developed called SharedFunding. SharedFunding has worked great for our clients. Why?
- The employer saves a substantial amount of money by purchasing a high deductible plan where even prescriptions are subject to the high deductible. They then promise to cover a set portion of the prescription for the employee (a copay, for example).
- The employee has the option to fill a prescription at one of our partner pharmacies and only pay their share when they pick up their script.
I was naive at the beginning, but then I learned:
- People tend to be terrified when the hear they have to pay up front for prescriptions…. even if they are going to get reimbursed.
- Some people are in a tight financial situation and cannot deal with any float — it is embarrassing to them and many end up NOT getting the prescriptions they need.
- Employers want to save money and offer smart strategies, but they don’t want to inject anxiety into their workforce.
- The total financial equation saves everyone a lot of money and no one gets hurt.
We can’t help you much with payday lending, but we CAN help you with the equivalent scenario baked into some health plans.