high deductible

Coupons for Prescription Drugs: The Good, The Bad and The Ugly

Drug Coupons Explained

We encourage and help anyone we can to obtain a coupon for their prescriptions.. We know, however, that there are emerging issues with them.

Some background 

Drug manufacturers have some amazing but expensive medications. They have created coupon programs that help the consumer pay for the prescriptions up until that consumer reaches their insurance company deductible (most coupon programs require the consumer has insurance).

For the consumer, that appears to be fine.  That is the good.

Once the member meets their deductible (even though they may not have actually paid that full amount, due to the coupon), the insurance company is hit with the cost.  For the remainder of the year the carrier is paying the full cost on refills for that prescription.  That is the bad (at least for the insurance company).

The battle between the manufacturer and insurance company is now heating up. The manufacturer wants to let the consumer off the hook for the cost (so they will use their product) but wants to get to the carrier reimbursement portion. Some insurance carriers have concluded that since the consumer did not actually pay for the prescription, deductible credit should only be given for what the consumer actually paid. We assume more carriers will follow suit.

We are beginning to see the consumer caught in the middle. The manufacturers do not want to keep filling the prescriptions for free.  If they see that the member was not given deductible credit from the insurance carrier, the member is then billed for the full cost.  The consumer assumes the coupon will work and does not find out it was rejected until after the prescription has been filled. The consumer then gets billed.  And, that is the ugly.

We at BBG still see the coupon option to be worth researching and using.  However, we are urging our clients’ employees and dependents to research this and reach out to us for help. We know a lot about these options and are learning how get ahead of being blindsided.

About High Deductible Health Plans — Say It Ain’t Always So Joe!

Great friend, colleague, and highly respected industry consultant Joe Paduda writes today in his widely read Manage Care Matters column about the possible cost and claim shifting implications of uninsured and underinsured workers. In it he makes specific reference to HDHP’s.  Among the points Joe makes about ‘High’ deductible health plans are the following:

“44% of working-age adults were covered by high-deductible plans – but more than half of them don’t have health savings accounts needed to fund those high deductibles.”

“ ‘High’ deductible health plans aren’t much different than no insurance at all if the patient can’t afford the deductible – and over half can’t. So, more incentive to cost- and claim-shift.”

I have great respect for Joe and his point of view. He’s as smart as they come, his points are always thoughtful, well-supported by research, and totally authentic (well maybe except for April 1 every year).

However, when it comes to high deductible plans I’d like to remind Joe and others — let’s not throw the baby out with the bath water. There are some innovative and practical uses of HDHP’s to lower costs and deliver better coverage that are most times overlooked by the national stats, commentators and think tanks.

As famed radio commentator the late Paul Harvey used to always say “And now for the rest of the story”.

The “rest of the story” is this: HDHP plans can be and are often used, at least in our little slice of the healthcare world, by savvy and practical employers to lower costs while still providing strong benefits. There’s a core of strong employers out there — many that we are very grateful to count as clients — that are utilizing high deductible plans in combination with reimbursement plans like our own SharedFunding  to reduce costs AND provide better coverage to their employees.

Comments like these from a recent conversation among a group of CEO’s speaking to a fellow CEO about SharedFunding are not unusual:

“Helped us tremendously with health costs.”

“We have had zero increases in premiums in the last 4 years.”

“We hired them last year (our year 1) to replicate the comprehensive plan most of our employees had……….. They did it – even using same insurer.”

“Here’s the key – they contract a very high deductible plan (like $11,000 for a family), and then manage all claims & reimbursements. All the paperwork flows through them. Our employees have much lower deductibles and copays they have to meet….”

Just sayin’.

Have a great Memorial Day Weekend.

Insurance policies are like pay-day lending.

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?

  1. 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).
  2. 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:

  1. People tend to be terrified when the hear they have to pay up front for prescriptions…. even if they are going to get reimbursed.
  2. 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.
  3. Employers want to save money and offer smart strategies, but they don’t want to inject anxiety into their workforce.
  4. 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.

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