understanding your health insurance at work

REPRODUCTION REQUIRES PERMISSION OF SUZANNE LEPAGE CONSULTING INC. 1

“Understanding your health insurance at work”

WebinarJune 4, 2014

Canadian Cancer Survivor Network (CCSN)

Suzanne Lepage, Private Health Plan StrategistWilliam Dempster, 3Sixty Public Affairs


Overview1. Private vs Public Drug Plans2. Private Market Overview3. Drug Plan Designs4. Private Drug Plan Cost Pressures5. Emerging Trends6. Patient’s Guide to inquiring about Private

Drug Coverage7. Questions and Discussion


Private vs Public Plans• Employers view drug coverage as part of

compensation package, not for health

• Private payers don’t have the same transparency as public plans

• Confidential “Business to Business” transactions

• Concern about competitors gaining market intelligence


Private vs Public Plans• Insurers’ specific drug coverage decisions or criteria

rarely communicated publicly

• Confidential communication targeted at their customers: Plan Advisors and Plan Sponsors

• Plan Members can access their own coverage information via insurer call centre or secure web portal


1. Premiums based on the makeup of their group and claims experience from previous years

2. Pool charges for extra risk protection for claim costs that go over a threshold e.g. $10,000 per year

Employers pay for health benefits


•When it comes to group drug benefit coverage, there is no real “insurance”:

1. If drug claims increase - the insurer will increase the plan sponsors premiums at renewal to reflect the increased costs

2. If the volume or size of claims in the pool go up – so will the plan sponsor’s pool charges

Drug Benefits are not “insurance”


Plan Members~ 19M

Plan Members~ 19M

Plan Sponsors

~400-600K

Plan Sponsors

~400-600K

PlanAdvisors~3,000

PlanAdvisors~3,000

Insurers~15

Insurers~15

Pharmacies~8400

Pharmacies~8400

PBM~3

PBM~3PBM + Insurer

~8

Unions


PrescribedPrescription/OpenProvincialManaged

Formulary

Frozen/Custom

FormularyFormulary

Co-pay Multi tiered plans

Sliding Coinsurance

DeductibleFlat co-pay% Coinsurance

Limits QuantityLimits

Days Supply

TrialScript

Ther. ClassLimits

Ther. ClassIncl/excl.

Pricing andMaximums

Disp Fee Caps

Lifetime Maximum

AnnualMaximum

Generic Pricing

AllowablePrice

Plan Sponsor Plan Design Decisions


Private drug plan costsPrivate drug plan costs

44% had health benefit rate increase144% had health benefit rate increase1

1- Group Benefits Prescription Drug Outlook

2-Express Scripts Canada 2012 Drug Trend Report

Health Benefit Cost = 9.44% of payroll1Health Benefit Cost = 9.44% of payroll1

Private drug plan avg Rx cost down 0.73%2Private drug plan avg Rx cost down 0.73%2


Specialty (biologic) drugsSpecialty (biologic) drugs

22% of drug spend22% of drug spend

1.2% of claims1.2% of claims

13.3% per year increase [vs 4.2% decrease for other drugs]

13.3% per year increase [vs 4.2% decrease for other drugs]

Est. to be 25-30% of spend in 2017Est. to be 25-30% of spend in 2017

Express Scripts Canada 2012 Drug Trend Report

Avg cost per Rx is $1,240 [vs $46 for other drugs]

Avg cost per Rx is $1,240 [vs $46 for other drugs]

55% of new drug approvals64% of pipeline drugs

55% of new drug approvals64% of pipeline drugs


Emerging Trends


Emerging Trends

1. Case management of drug claims2. Mandatory generic pricing3. Increase in preferred provider pharmacy networks4. Therapeutic substitution5. Specialty drugs targeted 6. Growth of formularies

*These trends are not mutually exclusive. They can be layered on with a “multiplying effect”


“My drug is not covered!!!”

Strategies are situational

Do you know why drug is not covered?


Possible reasons a drug may not be covered by a private plan

Reason Potential Strategy

1New drug still under review

DIN not listed on payers system

Ask when review will be completed and decision(s) will be made

2

Drug plan mimics the provincial formulary

Provincial formulary doesn’t cover the drug

Listing on provincial formulary




3Drug is part of a class that is excluded/limited on drug plan

Employer would have to change drug plan

4

Drug plan is managed formulary

Formulary manager has reviewed the new drug and decided not to cover

Ask formulary manager why they decided not to cover drug. Clinical or cost effectiveness?

Develop strategy to appeal decision




5

Drug Plan has specific criteria that must be met for patient to be covered for drug (diagnosis, prior treatment, step therapy, infusion location)

Patient does not meet criteria

Ask formulary manager why they decided on specific criteria for this drug

If criteria does not align with approved indications or guidelines, develop strategy to appeal decision

6

Drug plan requires that the patient try to access alternate coverage firste.g. special government program

Ask if there is an opportunity for interim coverage by the private plan while they wait for the alternate program to review patient application

Apply for alternate coverage




7Drug is covered, but patient has reached their individual maximum on their plan

Employer would have to change drug plan or allow patient exception

Explore other potential coverage (e.g., catastrophic drug coverage in your province)


How do private drug insurance programs align with the public drug plans?


Patient’s Guide to inquiring about

Private Drug Coverage


1. Ensure you have employee (and spouse if applicable) drug plan:

• Contract or policy number

• Personal certificate or identification number

2. Get a copy of the benefits booklet that outlines the employer benefit plan

3. Get the phone number for the insurance company

4. When calling the insurance company they will ask which drug the inquiry is about:

• Drug name

• DIN (Drug Identification Number)


5. If you are told the drug is “Not Covered” get more information on why the drug is not covered

– “Can you please explain why this drug is not covered by the plan?

– I am not familiar with insurance coverage. Could you help me understand why this plan does not cover this drug? I have the benefits booklet right here. Can you explain to me the specific terms that explain why this drug is not covered?”

– “If you are unable to help me, can I please speak to someone who can? Can you transfer me to your supervisor?”

6. If you are referred back to your employer:5. “Thank you, but for privacy reasons, I would rather not discuss my

(or my family member’s) medical condition and medication needed with my employer. Can you please explain to me why this drug is not covered?


6. Consider asking your employer (plan sponsor) for an exception.

• Because the employer chose the plan, they may have the opportunity to ask the insurer to pay for a drug that is not covered by the drug plan - this is called an “exception” or “extra-contractual coverage”

• The ability to request or negotiate exceptions depends a lot on the size of the employer and their financial arrangements with the insurance company

• Develop the “business case” of why the employer should cover the drug

• If necessary get assistance from a physician or support group to make the case for drug coverage

• Put the request and all supporting evidence in writing

• Arrange a meeting with a manager, Human Resources or Benefits Department, as appropriate


Summary1. Private vs Public Drug Plans2. Private Market Overview3. Drug Plan Designs4. Private Drug Plan Cost Pressures5. Emerging Trends6. Patient’s Guide to inquiring about Private

Drug Coverage7. Questions and Discussion


Questions and DiscussionSuzanne Lepage

(519)954-8873 (Business) (519)635-5175 (Cell)

[email protected]

www.suzannelepage.caca.linkedin.com/in/suzannelepage/

@suzannelepage

understanding your health insurance at work

Healthcare

private drug plan costs

drug plan designs

private drug coverage

drug claims

plan sponsors plan members

plan advisors

private vs public drug

plan sponsors premiums