Mike Dendy, AMPS CEO interviewed on Bloomberg Radio, “Taking Stock” to discuss the problem and solution to rising healthcare costs in the US. Click on the icon below to listen to the full interview.
By William Rusteberg
What constitutes minimum compliance under the Rx minimal essential benefit mandate? Minimum requirements are set by each state. In Texas the minimum benchmark is the BCBS Best Choice PPO – RS26 plan.
According to 45 CFR 156.122, to offer essential health benefits, health plans must cover at least the greater of (1). one drug in every USP therapeutic category and class or (2) the same number of drugs in each USP category and class in the state’s benchmark plan.
Does your current Rx plan comply or does it over-comply, i.e., more expensive than it is mandated to be? For example, if your current plan covers 20 different medications for a given category when only 10 is the required minimum mandated number, you may want to remove 10 of the more expensive medications from that class.
With drug costs accounting for as much as 25% of a plan sponsor’s spend, it may make sense to develop a Minimum Compliant Rx Plan utilizing the least expensive drugs in each therapeutic category and class. Minimum compliance benefits for Texas can be found here - texas-ehb-benchmark-plan (pharmacy is the last five pages).
It may make even more sense to subject Rx benefits to a deductible and eliminate co-pays. Consumers would be required to pay cash up front for drugs at the point of sale before filing a claim like in the old days. The shoe box effect, along with the behavioral effect of “skin in the game” at the point of sale should reduce claims even further. Of course our PBM friends won’t like this idea. Neither will HR directors.
When people talk about expensive drugs, they usually are referring to drugs like Lipitor for high cholesterol ($1,500 a year), Zyprexa for schizophrenia ($7,000 a year) or Avastin for cancer ($50,000 a year). But none of these medicines come close to making Forbes’ exclusive survey of the most expensive medicines on the planet.
September 2, 2014 Agenda Item: Recommend awarding CSP #15-033 Third Party Administrative (TPA) Services for the Self-Funded Group Health Plan to BlueCross BlueShield of Texas, Stop Loss to Voya Financial, Basic Life and AD&D Insurance to Aetna Life Insurance for a three (3) year term with an option to renew for two (2) additional one (1) year terms.
Editor’s Note: Though this is agenda item calls for approval of BCBS, Don Pedro says “Something tells me, based on ant activity this afternoon, a storm is brewing.” And out he went.
Bush regards health care from the perspective of a successful entrepreneur, and sees the health care industry as “the new oil”—a vast landscape of opportunity with untapped potential. All the waste and inefficiency—estimated by the Institute of Medicine to account for one-third of the spending—are gushers waiting to be discovered.
Go to www.CostPlusInsurance.com for powerful ideas & common sense solutions
Excellent video by Cost Plus Advisors
Excerpt of Article Written by Amy Monahan and Daniel Schwarcz, Associate Professors of Law – University of Minnesota Law School
“Exchange dumping is a risk transfer mechanism whereby plan sponsors may induce high-risk plan participants to opt out of employer-sponsored coverage in favor of insurance available on the individual market. ”
“The risk of employer dumping of high-risk employees is hardly exotic. In fact, dumping of high-risk policyholders is merely a subset of the larger insurer practice of risk classification.” Do lasers come to mind?
“If properly designed, such an employer dumping strategy can promote the interests of both employers and employees by shifting health care expenses on to the public at large. ”
“The ACA leaves self-insured employer plans virtually unregulated allowing employers a tremendous amount of freedom in designing the terms of their plans. Such employers are consequently free to design plans that appeal to relatively young and healthy employees but are unattractive to high-risk employees. Strategies include exclusion from coverage of certain high-cost conditions such as AIDS, diabetes and hemophilia. Neither ACA nor other existing sources of law substantially restrict the ability of self-insured plans to engage in indirect risk classification through design of plan benefits. ”
RiskManagers.us offers solutions for self-funded plan sponsors who seek innovative risk transfer alternatives. For more information visit www.RiskTransfer.us or write RiskManager@RiskManagers.us