By Bill Geraci, CEO of MAGIC Health Insurance Solutions
I recently took a trip to see several of the sites mentioned in the song, “Walking in Memphis.” I saw ghost of Elvis on Union Avenue (Sun Records) and followed him up to the gates of Graceland. I also had the most amazing lunch on Beale Street. In fact, there was so much food left over I took about half of it home in a doggie bag.
As I was “walking with my feet ten feet off of Beale,” I heard a voice behind me. It was a very kind and humble homeless man. He said he could tell by the way I was walking I must have been an officer in the military. I told him I was enlisted in the Air Force. After a nice conversation about his (and his daughter’s) situation, he asked me for some money. I offered the leftovers of my lunch, and he gratefully accepted them.
Unfortunately, many employees don’t have the same spirit of gratitude as this kindly man had.
A recent survey found, “While 73% of employees have an employer-provided health benefits plan that includes prescription drug coverage, 80% said it is important that their current or future plan cover the cost of their and their family members’ specialty medications.”
What really stood out from this survey was the following comment. “Employers must have a sustainable strategy to provide a rich pharmacy benefit that is both cost-effective for the company, as well as attractive to current and future employees.”
How is it possible to provide “a rich pharmacy benefit” that is “cost-effective for the company,” when Specialty medications such as Humira can cost up to $84,000 a year or Tremfya $150,000 a year?
This is an oxymoron.
Providers and members are absolutely oblivious to the cost of Specialty medications.
Because, like everything else with a health insurance plan, the true cost is hidden behind deductibles and minimal copays.
Who is going to pay for the “rich pharmacy benefit”?
I don’t know why, but the answer to this question seems to be lost on everyone.
Of course, the employer, ultimately, has to “pay the piper.” The buck stops with them.
The cost of Specialty medications is projected to increase by 12% this year. A similar increase is forecasted for 2022, as well. Furthermore, approximately 66% of the drugs that gained Food and Drug Administration (FDA) approval in 2019 were specialty drugs, pointing to a steady rise in usage.
This problem is never going to go away. It’s only going to get worse.
Several years ago, we had a member who was being treated for cancer. The net charge for each chemotherapy treatment was approximately $15,000. The member was driving almost two hours to a well-known cancer facility for their regular treatments. We spoke with our case management company about how to reduce the cost of the treatments. They suggested getting the medication directly from the manufacturer, at a much-reduced cost, and have them infuse at a center closer to the member’s home.
When we offered this option to the member, they were very surprised to hear how much the medications were being marked up. Knowing the higher price was ultimately going to be assumed by the employer, they still decided to continue going to the cancer center.
This is what we run into every day.
Once a member meets their deductible, coinsurance, and copays, which isn’t hard to do with Specialty medications, they could care less about the cost of anything. If I’ve heard it once, I’ve heard at least a hundred times, “My insurance will pay for it.”
There’s a part of me that would like everyone to be responsible for the first $5,000 of their medical costs. It would be an eye-opening experience for them, just like when someone sees their COBRA rates.
Many would complain to the government, which would bring us closer to the disaster called “free” healthcare.
As we’ve all heard, “There’s no such thing as free!”
Only if more people were like the kindly homeless man at the beginning of this post; grateful for their employers who are trying to provide steady work, good pay, and the best benefits they know how to provide in a very competitive global economy.
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