Anyone who’s followed our firm lately has probably heard us talk about the $1 million+ drugs already here and those coming to market over the next few years. While early in the game, we’ve already had a few clients incur enormous claims for these budget-busting medications.
It’s likely many of you reading this are familiar with some of the well-known drugs out there, but according to our latest survey, 73% of employers do not have a plan in place to avoid surprises related to high cost therapies like the ones we’re discussing. And while some of you may have a stop loss policy in place as a safety net to protect against such catastrophic claims, unfortunately, that may not be a foolproof strategy.
As is often the case, plan members who require these pricey drugs are already high cost claimants engaged in routine, often expensive, therapy. So, not only do stop loss vendors have the necessary claim experience to laser these members, they also frequently exclude these medications from the policy altogether.
We recently surveyed a number of prominent stop loss vendors in the market to identify what strategies were in place to help employers manage these claimants. As it turns out:
- 91% of the respondents had no plans to offer multi-year financing for payment of these drugs,
- 91% had no plans to offer performance-based payments, and
- 73% did not offer a separate insurance policy or rider to cover these medications at 100%.
In a nutshell, stop loss vendors aren’t yet able ― or willing ― to help employers fully manage the risk associated with $1 million- or $2 million-dollar plus medications.
So, what’s next? Should you be considering plan design changes, sourcing opportunities, direct contracts, or simply crossing your fingers? We believe in being prepared. However you decide to manage this risk, don’t be surprised if you have at least one of these claimants sometime in the next five years. And when that happens, don’t be surprised ― be prepared!
Interested in discussing your options? Give us a call if you would like to talk.