A recent article has highlighted the breadth of Big Pharma’s control of information regarding their medications, even reaching as far as drug research papers that are published in major medical journals.
The article “America’s Broken Health Care: Diagnosis and Prescription” in the Imprimis publication of Hillsdale College, cites studies finding that 74% of pharmaceutical research is conducted by for-profit research companies and only 26% by universities, which calls into question how much the results can be relied upon.
Even more surprising, 50% of contracts that drug companies have with academic institutions allow drug makers to ghostwrite articles and allow the named authors to only suggest revisions, but not make corrections or edit the articles. After seizing control of these “research” papers, the pharmaceutical companies will often use the published papers to market their expensive drugs and send their sales reps to doctor’s offices to convince practitioners to prescribe their medications … but at whose expense?
Many of these new drugs are extremely expensive and they may have a host of side-effects that plan sponsors and patients would want to avoid. Particularly since there are often alternative proven therapies on the market that are effective and significantly less expensive.
With that in mind, how can plan sponsors ensure their members are getting the best medications for their specific conditions and that they aren’t being steered towards expensive alternatives that may not be any better than established alternatives?
That’s where US-Rx Care can help by ensuring Better Outcomes and Lower Costs.
Through our fiduciary pharmacy risk management services, our clinicians work in your and your members’ best interest. They evaluate prescriptions written by your employees’ doctors with the goal of helping you and your members access the best therapies and where possible save money with less expensive pharmaceuticals. To ensure both the effectiveness and the health of your members, US-Rx Care relies on a combination of resources, including National Organizations’ guidelines, such as the American College of Rheumatology, American Academy of Dermatology, our practicing physicians that participate on our P&T Committee, in addition to academic research.
US-Rx Care’s programs are proven to deliver Better Outcomes and Lower Cost, the holy grail in care management.
A new report has found that small businesses that purchase their group health insurance online or through payroll vendors saw the largest premium hikes in 2022, significantly higher than those that went through brokers.
Overall rates for employers with 10 or fewer employees saw their family plan health insurance premiums jump 12% from 2021, compared to just 5.4% for all small to mid-sized businesses with up to 250 employees, according to the report by HR and benefits software company Ease.
The cost for individual group health plans increased 6.7% for the smallest SMBs, compared to just 4.3% overall between 2021 and 2022. As stated, the numbers for smaller companies were the most pronounced for those who buy their coverage online or via payroll vendors.
Meanwhile, employees’ share of premiums increased at a slower rate overall of 4.15% between 2021 and 2022, meaning that employers were not passing on the full increases in group health plan premiums to their staff.
Since 2018, individual premiums have increased by 21% while family premiums have increased by 18%. To put it into dollar signs, that’s an extra $104 for individuals and $231 for families each month for medical insurance.
The Ease report notes that those higher premiums are likely hurting those small employers more than larger SMBs with between 51 and 250 workers. The latter have seen an increase in health plan enrollment among their employees between 2018 and 2022, while those with one to 50 employees saw overall decreases. Overall, more than half of SMB employees opt out of their employer-sponsored coverage.
The HDHP effect
The report found that health maintenance organizations and preferred provider organizations continue to dominate the landscape in group health benefits for SMBs. While high-deductible health plan (HDHP) enrollment grew at an astounding 68% between 2021 and 2022, they only accounted for 6% of group health plan enrollment.
Some employers have gravitated towards HDHPs to reduce their and their employees’ overall premium spend, but these plans come at a cost: more out-of-pocket costs for workers.
In those cases, Ease CEO and co-founder David Reid recommends pairing an HDHP plan with other voluntary benefit plans that can “insure” gaps in coverage, such as short-term disability plans and group supplemental health insurance plans called Gap plans. They are similar to the Medigap supplemental insurance plans millions of seniors purchase each year to fill in holes in Medicare parts A&B.
Gap plans can help by providing coverage when employees have not met their health care deductible. These plans may cover most inpatient and outpatient services that are covered by the underlying primary health care plan and applied to the deductible or coinsurance provision.
Plans differ and employers may choose a variety of coverage options, including varied inpatient and outpatient benefits. Deductibles can be added to the plan to manage premium costs.
Coverage can often be configured to be compatible with HDHPs using health savings accounts.
Importance of your broker
Reid said that the report’s findings illustrate the importance of employers working with brokers and consultants to purchase their employee benefits.
“[SMBs] getting good advice are using more innovative solutions that allow them to make their dollars go as far as a large corporation’s dollar-spend on benefits,” he told the trade publication BenefitsPro. “Those who are bypassing a consultant and purchasing benefits through, say, their payroll vendor are generally seeing fully insured, off-the-shelf plans that increase in cost more quickly.”
As your broker, we have access to plans from different carriers and can work with you to put together offerings that will best accommodate your employees.
Both employers and employees have much to gain from a solid voluntary benefits program.
For employees, being able to enroll in an insurance product through a workplace voluntary benefits program offers them the advantage of group pricing, the convenience of paying through payroll deduction, and perhaps access to insurance that would be difficult to get on an individual basis.
For employers, offering a range of voluntary insurance products can help increase employee satisfaction – along with loyalty and morale – and make the business more competitive in attracting and retaining the best talent.
These advantages alone, however, do not ensure that a voluntary benefits program will be a success. Careful planning, including the selection of benefits to offer, choice of vendors and well-crafted communications, are keys to program success. Consider the following:
Get the right mix – Bring in the kinds of benefits that employees want and will enroll in. Survey employees as to what types of additional benefits they would participate in if given the opportunity. Depending on your employee demographics, these could include additional life insurance options, long-term care – or even pet insurance.
Voluntary benefits enable employees to self-customize an individual benefits package that is uniquely appropriate to them.
Look for gaps – Look for gaps in your company’s current benefits coverage, and consider how voluntary benefits plans can be used to fill them.
For companies that have had to scale back on their regular benefits package, voluntary benefits can be particularly helpful. If your benefits budget is tight and, for example, needs to be dedicated to helping fund medical benefits, offering dental and vision on a voluntary basis gives employees easy and affordable access to these benefits.
Get the word out – While we can often supply some communications materials, your internal communications concerning the program will help to incorporate it into your overall benefits program in the eyes of employees, making it more likely they will enroll.
Consider announcing new voluntary benefits offerings in a communication from top management, which will demonstrate the company’s commitment to the program.
Make voluntary benefits enrollment a part of your annual enrollment process, and incorporate descriptions and information on voluntary benefits offerings into the communications materials for your core plans.
Work closely with us – We are here to help you make a selection that best fits your company’s needs, and to help you communicate with your employees and enhance enrollment.
This will be particularly important if any of the voluntary benefits have minimum participation requirements. We can come in for presentations, individual meetings or enrollment sessions, all of which can be very effective in increasing participation in these programs.
The takeaway
Voluntary benefits can be a great add-on to any company’s benefits program. Careful planning and consideration of the various issues that can affect participation can increase the chances of program success.
The Centers for Medicare and Medicaid Services has proposed new rules aimed at streamlining the prior approval process for most health plans in the U.S. Under the proposal, starting in 2026, insurers would be required to render a decision within seven days for a non-urgent service or item (compared to the current 14 days), and 72 hours if it is urgent. It would also require most group and individual health plans, Medicare Advantage, Medicaid managed care and state Medicaid agencies to implement electronic prior authorization systems by 2026 and streamline their processes for approving care. The rule is aimed at tackling one of the biggest headaches for patients and practitioners alike. Prior authorization can sometimes take time to receive, often delaying much-needed care. Waiting for approval can have serious consequences, with studies finding:
It often leads to delays in care for serious conditions like cancer.
It often leads to more people being hospitalized as their condition worsens as they wait for care or medicine to be approved.
Prior authorization rules can also be confusing, time-consuming and frustrating for both patients and doctors, with the latter often feeling as if the insurer is questioning their expertise.
Insurers use prior authorization as a cost-containment tool that requires providers to seek approval from them before referring a patient for certain services and prescribing some medications. Studies have found that the number of prior authorization requests has exploded in the last few years, straining the system and delaying care. The proposed rule The goal of the rule is to reduce the bureaucracy around prior authorizations and cut wait times for responses that some providers say sometimes take weeks to get approved. The proposed rule — a revised version of a similar one floated by the Trump administration that was withdrawn due to cost concerns — applies to all Affordable Care Act-qualified health plans, Medicare Advantage plans and state Medicaid programs. As mentioned above, the time insurers have to approve a prior authorization request would be reduced to seven days, and 72 hours if it is urgent. Additionally, if the insurer denies the request, it would be required to include a specific reason for doing so. Under the proposed rule, insurers will be required to build and maintain a system for electronically approving prior authorizations, known as a fast healthcare interoperability resources application programming interface (FHIR API).
The FHIR API must be able to ascertain whether a prior authorization request is required and “facilitate the exchange of prior authorization requests and decisions” from the provider’s electronic health records or practice management system. Some doctor’s groups have said the new rule doesn’t go far enough and that seven days is still too long.
While drugmakers have been assailed for years for increasing their prices and driving the cost of medications higher and higher, there is another player in the health care space that is receiving increased scrutiny: pharmacy benefit managers.
PBMs are intermediaries, acting as go-betweens for insurance companies, self-insured employers, drug manufacturers and pharmacies.
They can handle prescription claims administration for insurers and employers, facilitate mail-order drug delivery, market drugs to pharmacies, and manage formularies (lists of drugs for which health plans will reimburse patients.)
Express Scripts, which provides network-pharmacy claims processing, drug utilization review, and formulary management, among other services, is the best-known PBM. CVS Caremark and UnitedHealth Group’s OptumRx are other major players.
PBMs typically contract with both insurers (or self-insured employers) and pharmacies. They charge health plans fees for administering their prescription drug claims and create formularies that spell out the prices pharmacies receive for each drug on the list.
Commonly, the price the plan pays for a drug is more than the pharmacy receives for it. The PBM collects the difference between the two prices.
It can do this because the health plan does not know what the PBM’s arrangement is with the pharmacy, and vice versa. Also, the plan doesn’t know the details of the PBM’s arrangements with its competitors.
A PBM could charge one plan $200 for a month’s supply of an antidepressant, charge another plan $190 for the same drug, and sell it to a pharmacy for $170. None of the three parties knows what the other parties are paying or receiving.
Additionally, PBMs have been accused of pocketing the rebates that drug manufacturers offer, instead of passing them on to the end users: the patients who are prescribed the medications. Those rebates can be significant.
In the crosshairs
In theory, the PBMs should pass these rebates back to the individuals who are prescribed the medication so that they can reduce their out-of-pocket costs. However, if most of those costs are born by the insurer, those rebates would conceivably be transferred to the insurer that is paying for the drugs and the insurer could pass some of those savings on to enrollees.
But, because these arrangements are also confidential, the extent to which these savings are passed back to health plans is unknown.
As pressure on PBMs has grown, federal and state lawmakers, attorneys general in various states and state regulators have been taking action.
In 2022, 12 states enacted 19 measures that included a variety of restrictions and requirements for PBMs, according to the National Academy for State Health Policy.
A number of state attorneys general have filed lawsuits against some of the country’s largest PBMs. Ohio Attorney General David Yost has managed to wring more than $100 million in settlements with PBMs in the last three years, after filing lawsuits accusing them of violating state antitrust laws and overcharging state agencies like the Ohio Bureau of Workers’ Compensation and the Ohio Department of Medicaid.
And in Washington D.C., a bipartisan bill introduced in the U.S. Senate would require PBMs to file an annual report with the Federal Trade Commission about fees charged to pharmacies and reimbursements sought from drug companies.
The bill also authorizes state attorneys general “to conduct investigations, to administer oaths or affirmations, or to compel the attendance of witnesses or the production of documentary or other evidence.”
A recent decision by a federal judge in Texas to issue an injunction on a pivotal part of the Affordable Care Act requiring insurers to offer certain types of free preventative care, has raised concerns that some health plans will stop paying for these services.
However, since most employer-sponsored plans are on annual contracts, the decision is unlikely to affect policies in 2023, but beyond that, it’s uncertain how things will play out. The Biden administration has appealed and called for a hold on the ruling until the decision is settled by higher courts.
If the ruling by Judge Reed O’Connor of the Federal District Court for the Northern District of Texas sticks, it would roll back the health insurance market to the days prior to the ACA when health insurers decided which preventative care services they would cover with no cost-sharing.
The ACA changed all that, requiring insurers to pay for preventative services, such as:
Cancer screenings, like breast cancer screenings and colonoscopies
HIV screenings
Diabetes screenings
Heart disease screenings
Pap smears
Depression screenings
Statins
Immunizations and PrEP for HIV and HPV.
Judge O’Connor in 2018 issued a decision striking down the entire ACA, which was later reversed by the U.S. Supreme Court.
The most recent ruling is really two decisions:
That a panel of volunteer experts that issues binding recommendations on what preventative care must be covered under the ACA violated the Constitution because its members are not appointed by the president or confirmed by the Senate.
That the ACA requirement that insurers must cover PrEP and HPV vaccines as well as certain HIV/Aids-prevention drugs violates the religious beliefs of Christians, which in turn violates the Religious Restoration Freedom Act.
The fallout
The consequences of the ruling are unlikely to be felt immediately, particularly for group health plans, the annual contracts of which include coverage for preventative services.
Matt Eyles, president and CEO of the trade association America’s Health Insurance Plans, issued a statement saying that: “As we review the decision and its potential impact with regard to the preventive services recommended by the United States Preventive Services Task Force, we want to be clear: Americans should have peace of mind there will be no immediate disruption in care or coverage.
“We fully expect that this matter will continue on appeal, and we await the federal government’s next steps in the litigation, as well as any guidance from relevant federal agencies.”
That said, if the Biden administration fails in convincing higher courts to put a hold on the injunction while the appeal of the decision plays out, changes could come over time.
In this continuing tight job market, many employers would likely be reluctant to roll back these preventative services in their health plans. And if insurers plan to make changes to their plans’ benefits, they are required to give advance notice.
Other pundits have said that the preventative care provisions of the ACA have become so ingrained in the health care system that employers and insurers would have a hard time rolling these benefits back, and many may not consider it.
