What other innovative things are health insurance companies doing?
Since a prescription drug plan accounts for 20 to 25 percent of the total cost of a health care plan, many health insurance companies are moving from offering two-tier prescription plans to three- and four-tier plans. With three- and four-tier plans, the amount a member pays for a drug depends on which tier that drug has been classified. For example, a generic drug would be placed in the least expensive category, while a brand name or designer drug would be classified in the most expensive. Tiered benefit designs result in higher member cost-sharing when the member elects the more costly drug option.
The goal of a tiered plan is to encourage the member to use the most cost effective and appropriate drug that will meet the needs of the condition — in most cases, reducing the amount the member is spending on drugs.
Many prescription plans also have prior authorization and step therapy protocols in place to help monitor costs. Prior authorization program requirements are placed on medications when the medication has limited conditions for which it is prescribed, special monitoring or dispensing requirements or an extremely high cost.
Step therapy policies require that the member start with lower-cost medications before moving up to more costly ones if the former do not work. Step therapy policies are also used to educate physicians about generics and provide that information to members to encourage them to switch to effective, lower-cost medications.
How does plan design affect cost?
The cost impact of plan design depends on several factors, including size of the group, health status of the group and if the group switches type of plan entirely.
Consumer-directed health plans have the potential to help employers lower their costs, but possibly at the expense of raising costs for their employees. However, if employees are healthier than average, and therefore have lower health care costs, the impact on spending could be minimal. And because the employee is taking on more of the risk and paying a higher deductible for services, premiums on these plans are generally lower, so those who use fewer services could actually see a decrease in their overall out-of-pocket costs.
How does an employer determine the right plan for its employees?
An employer has to consider several factors, including the cost of its current plan, the age and income level of its work force, the general health of its employees, the benefits provided and the needs of its employees. Employers may invest in a more expensive health insurance plan, only to find that employees aren’t using it because it isn’t what they want or need.
By assessing its current situation, the situation of its employees and anticipating and projecting future costs, an employer can choose a plan that best meets its needs.
Marty Hauser is president of SummaCare, Inc., a provider-owned health plan located in Akron, Ohio. SummaCare offers a full line of health plans and ancillary products. Through its extensive network of more than 7,000 providers and more than 50 hospitals, SummaCare offers coverage to more than 115,000 members throughout northern Ohio. Reach him at [email protected].
