By Bill Rusteberg
Most plans these days are not health plans anymore, they are drug plans with diminishing left overs to cover everything else. Drug costs can be as high as 40% of a plan’s spend and it’s increasing every year.
A small percentage of brand name prescriptions are driving most of the cost while cheaper generic drugs represent 85-95% of all prescriptions dispensed to plan members.
Plan members receive free financing at the point of sale, financing they never have to repay. They pay a small copay and don’t have any idea what their prescriptions cost. They don’t care and neither do their doctors.
But the one paying for all of this does care.
CMS and the Kaiser Family Foundation report the average cost of generic drugs for a 30 day supply is $35–45 while brand name drugs average in the hundreds or thousands of dollars.
There are over 35,000 FDA approved generic drugs covering every therapeutic class. The average cost for a 30 day supply is less than a tank full of gas, a new shirt at JC Pennys, lunch with friends. (You don’t need insurance to pay for any of those things). And there are 1,000 generics costing less than $5 to treat common every day ailments.
ACA compliant generic only prescription drug plans are becoming more common out of necessity. No insurance is necessary since it makes no sense to insure a $35-45 loss. To remain ACA compliant plan sponsors reimburse loss after a plan member “pays their fair share.”
No PBM needed. Plan members pay cash at the point of sale and file a claim when they have nothing else to do. Some save their receipts to be filed just before Christmas as their “Christmas Bonus.” Most don’t file at all.
Those plan members needing brand name or specialty drugs can:
- Pay cash
- Apply for patient assistance programs
- Apply for individual coverage through Federal marketplace plans
- Go to work for a plan that covers high cost drugs
Plan sponsors can either adopt a generic only drug plan or they can get out of the health insurance business and offer ICHRAs instead.
Have you reached that point yet?
