Question:
I’m really confused about prescription drug coverage, can you explain more about how it fits into an employee benefit plan?
Answer:
We get a lot of questions from people about the ins and outs of drug coverage, because it is complicated! Drugs are one of the most expensive components of Canadian healthcare which is why prescription drug coverage is at the foundation of most employee benefit plans. To help control the rising costs of prescription drugs, you’ll see insurance carriers implement “drug management strategies.” These strategies can often lead to frustration at the pharmacy if employees do not understand how or why they’re incorporated in their benefit plan. Let’s look at how these strategies are implemented and I’ll share some tips on overcoming the pharmacy frustration.
Understanding Drug Management Strategies
To better understand drug management strategies and how they impact your drug coverage we can look at a few common strategies used by Chambers Plan including, generic substitution, co-insurance, and the National Formulary. Before your eyes glaze over, I promise to keep this short and sweet!
Did you know generic drugs are equivalent to ‘brand’ drugs in function, manufacturing, and ingredients? But…they cost less to make because the manufacturers don’t have to invest in research to develop and test the drug. Generic drugs are significantly less expensive which means using these alternatives (when possible) will lower out-of-pocket expenses at the pharmacy.
For example a common Brand Name drug for blood pressure Lipitor – a 90 day supply will cost around $200. This same drug but manufactured as a generic is only $40.
Co-insurance sounds more complicated than it is and this is probably the strategy you’re most familiar with. If your benefit plan uses co-insurance, you pay a portion of your prescription cost each time you visit the pharmacy. The most common coinsurance amount is 80%. This means your benefit plan will pick up 80% of the cost and you’ll pay 20%.
The last strategy we’ll look at is “The National Formulary.” The Formulary is an evolving list of prescriptions physicians, pharmacists, and scientists (the who’s who of healthcare) have determined are the lowest cost alternatives. Basically, the most comparable, effective drug you can get for the best price. The National Formulary covers 85% of the most frequently prescribed drugs in Canada. Under Chambers Plan, drugs that are listed on the National Formulary are covered at a higher reimbursement percentage while drugs not listed on the formulary are covered at 50%. As new drugs become available to the market the list is reviewed to ensure the most cost-effective treatments are available to employees.
By using these expense control strategies Chambers Plan can ensure we are keeping your out-of-pocket expenses as low as possible, while also encouraging employees to make informed choices about their health and treatment options.
Danielle’s Tips for Managing Drug Coverage
I have a few tips to get you out of paying (potentially) high co-insurance amounts for expensive brand drugs or drugs not covered on the National Formulary.
- Use the Medication Look-up function in my-benefits, Chamber Plan’s online benefit portal. This will allow you to see if your current medication is on the National Formulary to ensure there are no surprises at the pharmacy. Going forward you can have a discussion with your doctor, to ask him or her to prescribe an alternative medication “that IS on the TELUS National Formulary.”
- Sign up for free supplementary drug programs. These supplemental drug programs are sponsored by drug companies to help with the affordability of their products. Anyone can sign up and use these programs designed to offset the costs of brand name drugs that you might be prescribed. You can sign up for Innovicares and RX Help One at no extra cost and potentially have the portion not covered by your benefit plan covered by one of these programs!
- Use Pocketpills. As a Chambers Plan member, you have access to Pocketpills which is an online pharmacy service that provides fast home delivery for non-narcotic prescription medications and vitamins. Blood pressure medication, birth control, and inhalers can be delivered to your door. As a bonus to not having to trek to the pharmacy, you will save an additional 10% on your co-insurance.
If you have more questions about drug claims and your benefit plan, I encourage you to reach out to your local Chambers Plan advisor who would be happy to assist you in navigating the various drug management strategies. Wait – are you NOT a member yet? Fill out our request a quote form and one of our experienced advisors will follow up.
