Rising health care costs are nothing new. But the ways employers are managing their pharmacy benefit costs are changing.
United Benefit Advisors® (UBA) surveyed more than 10,000 employers nationwide.1 The results showed that costs are rising, and vary significantly by industry:
- Retail, construction and hospitality employees cost the least to cover
- Government and finance employees cost the most
And by geography:
- Northeast plans cost the most
- Plans in the central United States cost the least
Plan options — the more, the merrier
So how are employers fighting the financial pinch? The UBA summary showed that almost 18 percent of employers are offering three or more health plan options to their employees — a 28 percent increase over the past five years. Many feature high- , medium- and low-cost options, depending on employees’ needs.
Copays and coinsurance
Another way employers deal with rising costs is through copays and coinsurance. According to the summary, most employers used copays (61 percent) or a blend of copays and coinsurance (30 percent) in their prescription drug plans.
Some mixed it up by using a copay structure in the first two tiers and a coinsurance model for the higher tiers. Other plans used a percent-based cost-sharing model for higher priced specialty medicines (for example, 20 percent with a $100 maximum).
4-tier, 5-tier — do we hear 6?
The summary found that four-tier prescription plans made a big impact on savings.
- Four-tier is popular — in the past two years, the number of plans with four or more tiers grew 58 percent.
- Almost half of those plans included three tiers (generic, formulary and non-formulary).
- 44 percent of plans offered four or more tiers. The higher tiers covered specialty drugs — the most expensive, with significantly higher copays.
With Employer Advantage, self-insured employers are in control
Every employer is different, and as a result needs different options to drive down pharmacy costs. We created Employer Advantage™ to help. It combines our best products, together, to drive down the total cost of health care. Unique to Prime and your Blue Cross Plan, employers can choose the right products based on your unique needs.
One of those products is benefit design. Employer Advantage benefit designs include many options: cost sharing for members, different ways to reinforce generic drug use, and options for 90-day long-term medicine fills to name just a few.
Our consultative approach offers you several benefit designs, with our 5+-tier benefit design with two-tier generics as our strongest recommendation for 2017.
Fighting higher drug costs with smarter tools
The more options employers have in their arsenals, the more ways you can lower health care costs. Employer Advantage offers everything — 5+ tier benefit design, managed networks, formulary, utilization management and specialty pharmacy. That way, self-insured employers receive our best products, together, to drive down costs for you and your employees.
Want more information on Employer Advantage? Contact your health plan representative.
1 Brio Benefits Consulting. (February 4, 2016). How Do Your Copays and Deductibles Stack Up? Benchmark Your Employees’ Out-of-Pocket Costs.