There are two basic and very different types of drug plans: prescription discount plans and prescription drug insurance.
In a discount plan, you typically pay a monthly or annual fee and get a card. You present your card when you fill a prescription, and the pharmacy gives you a certain percentage off the cost of the drug. The discount may vary drug by drug or by brands versus generics. Discount plans are NOT insurance plans. Discount plans are sold by drug manufacturers, drug stores and membership organizations like AARP.
Prescription drug insurance is similar to medical insurance. You (or your employer) pay a premium, and then you pay a copay when you fill a prescription. If you are insured through an employer or other group plan, prescription drug coverage may be a stand-alone plan or integrated with your medical insurance. In the individual, non-Medicare market, you’re most likely to find prescription insurance bundled with health insurance.
Yes, the Affordable Care Act requires large employers to provide coverage to full-time employees or pay a penalty. This provision, called the “play or pay” rule, goes into effect Jan. 1, 2014. Small employers – those with fewer than 50 employees – are exempt from the coverage requirement and penalty.
As a side note, be aware that the ACA uses different definitions of “large employer” for different provisions of the overall law. While any company with 50 or more employees is considered large for the play-or-pay rule, the more frequently used definition is a business that maintains an average of 100 employees over the course of a year.
Specialty drugs are high-cost prescription medications used to treat complex, chronic conditions like cancer, rheumatoid arthritis and multiple sclerosis.
Specialty drugs often require special handling (like refrigeration during shipping) and administration (such as injection or infusion). Patients using a specialty drug often must be monitored closely to determine if the therapy is working and to watch for side effects.
Specialty drugs might be covered through either medical or prescription drug insurance. How a specialty drug is covered usually depends on where the patient receives the drug.
If the patient takes a pill or self-injects the drug at home, it is more likely to be covered through his or her prescription drug benefit. If the patient receives the drug at a doctor’s office or an outpatient clinic, it’s more likely to be covered through the medical benefit.
Specialty drugs are very expensive – $1,000 or more per month – and spending on them is growing 15 to 20 percent a year. Many prescription drug plans that cover specialty drugs have a separate “tier” that specifies how much an individual has to pay for specialty drugs. Individuals may be required to pay a percentage of the drug cost or a flat-dollar copay.
Many drugs manufacturers offer patient assistance programs to help people with and without insurance get access to specialty drugs.
The Marketplace must ensure you’re eligible for a health insurance plan through the government program. To do so, several pieces of your personal information are pulled from federal agencies, as approved by the Department of Health and Human Services (HHS). The following sources, and perhaps several more, may be used to verify your identity:
Social Security Administration (SSA) for your social security number and citizenship status
Internal Revenue Service (IRS) for household size and income
Department of Homeland Security (DHS) for citizenship information and immigration status
Consumer reporting agencies for income levels
Inconsistencies between your application for a Marketplace plan and information acquired through these agencies could lead to delays in approval. If notified of any problems, you’ll be given time to solve the issues, as well as sources you can use to do so.
To learn more about how the Marketplace verifies your identity and ways we can help you complete the process smoothly, contact us today.
Lipitor, one of the most frequently prescribed medications for lowering cholesterol and preventing heart disease, is now available in generic form. Access to atorvastatin – the generic name for the drug – is going to save residents thousands of dollars. Here’s how:
According to the American Heart Association, heart disease is the leading cause of death in Indiana. Particularly alarming are the obesity rates (more than 65 percent) and the number of active smokers (more than 23 percent), both higher than the national averages. The state has the 14th highest death rate from the disease in the country.
In the past, residents on high deductible health plans who were prescribed this medication had to spend about $80 a month for the drug. Now that the generic version is available, the cost will decrease to just a few dollars for a 30-day prescription. Even residents on a co-pay plan will realize the savings; atorvastatin is expected to fall in the $10-or-less co-pay category.
On an individual level alone, this is great news. But it’s also going to benefit those enrolled in a group health plan. Employees in group plans will not only personally save money, but they’ll save their company money by reducing the overall claims. A large company that may have been spending more than $100,000 each year on Lipitor may now be able to reduce those claims by as much as 90 percent. As a result, the group health plans will have more buying power.
Some residents may be hesitant to make the switch. Although most generic medications are usually the same, the formulations can have minor differences. Keep in mind that if you do choose to continue taking Lipitor over the generic version, you will pay a higher cost – most health plans will categorize Lipitor as a Tier 3 drug, which means the co-pay would be substantially higher. Some carriers may choose not to cover it because the generic alternative is available. In that case, a person would likely be required to provide a letter from their doctor explaining why they have to take the brand name in order to get it covered.
For local residents agreeable to the switch, the availability of the generic version of Lipitor should provide a substantial savings.
Are you or a loved one currently taking this medication? How does Lipitor going off-patent affect you?
Source: “Indianapolis Fact Sheet” American Heart Association (http://www.heart.org/idc/groups/heart-public/@wcm/@global/documents/downloadable/ucm_307172.pdf). Accessed December 10, 2011
Indianapolis has seen the introduction of several new group health products designed for companies with between 10 and 250 employees. What makes these plans intriguing is that they are self-funded health insurance vehicles.
In a traditional self-funded plan, the employer pays for its own medical claims directly. Meanwhile, a third-party administrator administers the health plan by processing claims and performing other tasks. Self-funded plans usually include stop-loss insurance, which limits an employer’s annual claims responsibility.
A self-funded health plan has several advantages, including the following:
·The employer pays only for claims incurred after the network discount
·The employer can track the types of claims being incurred
·The employer can offer the same plan throughout Indianapolis because self-funded plans are not subject to state mandates
·Self-funded plans can be tailored
·The employer receives fewer billing surprises, because claim data is accessible all year
The newest Indianapolis health plans are a hybrid of self-funded and fully insured, also called level funding plans, which enable Indianapolis companies the opportunity for future savings. Companies can realize these savings if group claims are down. When claim levels are reduced, the employer may receive a portion of the aggregate claims liability account – also known as a claim pre-fund or claims funding. Some plans are designed to return up to 50 percent of the account, which could be equivalent to about 25 percent of the overall premium.
The stop-loss protection is what enables the plan to work like a fully insured contract. Even if your medical claims are higher than your claims funding, you won’t pay a higher premium, thus removing much of the risk from the traditional self-funded plan. You can predict your monthly payments.
The value of a level-funded plan is that you have access to claims activity. When it’s time to renew your policy, you have the knowledge to target and modify specific areas of the health plan.
Self-funded, group health insurance isn’t new in Indianapolis. Level-funded vehicles have been around for some time, too. So why are companies launching these new plan designs?
Companies are offering new products in anticipation of the healthcare reform community ratings set to take effect in 2014. With community ratings, the rates for sick and healthy groups are essentially the same. Underwritten groups will no longer exist and everyone will pay similar rates.
Level-funded plans have been successful in community rated states. Health groups or low utilization groups are scoring huge savings from these types of plans. Because the plans are consider self-funded, providers have more room to operate under the health care reform law. As a result, companies have greater control of the health benefits.
Indianapolis health insurance plans begin with as few as ten people enrolled. Are you responsible for selecting the insurance options for your company? If so, please contact me today. I’d be happy to provide you with a quote.
Under the new health care reform law, if an employer’s group health insurance is considered unaffordable — a cost to the employee of more than 9.5% of household income — the employee would be eligible for tax subsidies through a health insurance exchange.
As the law was originally interpreted, if the employee was also purchasing coverage for his or her dependents, the employee’s dependents would be eligible for subsidies if 20% of household income went toward the cost. Congress’s Joint Committee on Taxation now views the law differently and has determined the subsidies are for the employee only.
Here’s an example of what could happen: An employee purchases insurance through his employer. The employer pays 88% of the employee portion of the premium, but the employee also needs to pay to cover his dependents. The employee cost is less than the 9.5% of household income. Yet the cost of adding his dependents to the plan is unaffordable. Under the new interpretation, the employee’s dependents would not qualify for tax subsidies.
The change to the law’s interpretation is a huge blow for affordable health insurance. As a result, some experts predict a 95% increase in the cost of health insurance in the individual market, in addition to current rate increases. A healthy person currently getting a good deal in the individual market could suffer because of cost redistribution. An increase of this size could have a crushing effect on the middle class, especially for those who are self-employed.
Have you seen a substantial increase in the cost of your health insurance? Are you aware of your options?
One of the hot topics of the recent health care reform debate was the creation of the Independent Payment Advisory Board (IPAB). The board would have the power to implement changes to reduce the growth rate of Medicare, though Congress would have the power to overrule the IPAB decisions.
The Independent Payment Advisory Board would have more power than the existing Medicare Payment Advisory Commission (MedPAC), which has no regulatory authority. MedPAC’s role was to submit two reports to Congress each year with suggestions for improving Medicare. Congress would then have to vote on and implement those changes.
The Independent Payment Advisory Board would consist of a 15-member panel requiring Senate confirmation. Members of the panel would be nominated by the President of the United States. As with any Senate confirmation hearing, a political battle could stall or prevent nominees from getting elected.
The Independent Payment Advisory Board has been a debated substantially among politicians and citizens. Some opponents refer to it as the Death Panel because they believe that some changes will have a negative impact on Medicare recipients. Proponents see it as a way to remove power from Congressional members and special interests and put it in the hands of those knowledgeable in health care policy. What’s your impression of the IPAB?
The state of Indianapolis recently lost five individual health carriers from the market. For those working in the health insurance industry, this comes as no surprise. Below are the five companies that exited and the reasons for their departures:
American Community Mutual Insurance Co.
American Community left Indianapolis due to insolvency. The company had struggled for years to be profitable because of poor company leadership. Michigan’s Department of Insurance took over the company last year.
Though still practicing, especially in Illinois, Pekin Insurance is no longer active in the under-65 individual health market.
Guardian Life Insurance Co.
Guardian is a large, New York based insurance carrier. The individual health market in Indianapolis wasn’t a good fit for the company.
Cigna is a large group carrier that never offered significant individual health product in Indianapolis.
The loss of Aetna is a substantial blow to competition in Indianapolis’s individual health market. Aetna offered a number of competitive products that were beginning to gain traction. Recent statistics indicate the company still has more than 700 active policies in the state.
Indianapolis’s health insurance market suffers from decreased competition. But the introduction of the Medical Loss Ratio (MLR) has made the reward in the individual market too risky for these companies. The MLR is the percentage of your premium dollars an insurance company spends on providing you with health care, as opposed to what is spent on overhead and administrative costs.
Anthem and United Health Care are the most competitive carriers in the state, followed by a few small carriers like Humana, Assurant, and Medical Mutual of Ohio.
Forbes reported on the Government Accountability Office study children on Medicaid have lower access to health care and quality.
The study showed that Medicaid patients are 13% more likely to die than uninsured patients in a hospital. 66% of children covered by Medicaid were denied appointment with a specialist for an urgent medical condition. The physicians do not want to deal with Medicaid.
With health care reform government is expecting 25 million people to join the Medicaid ranks. This is going to lead to the rationing of care and two classes of health care.
Residents will be faced with tough decisions when it comes to the future of health care. Under the health reform law, if your house hold income is under $64,000 then you will qualify for Medicaid. If you choose not to pay and take Medicaid the level of care will be much lower than an insured with private insurance. There are now studies proving this. Most parents will never see the results of these studies because they will be suppressed.