What if employers cut health plans costs by allowing insured workers to be pushed into assistance programs for needy patients? That’s exactly what’s happening now under so-called “alternative funding programs.”
A new policy paper from the Alliance for Patient Access takes a closer look at how they work and what they could mean for patient health.
About Alternative Funding Programs
With alternative funding programs, companies reduce their health care costs by offloading the responsibility of covering certain specialty drugs. Here’s how they work:
Employer-sponsored health plans revoke coverage of high-cost drugs. At the advice of third-party vendors, employer-sponsored health plans eliminate coverage for specific high-cost drugs by categorizing them as “non-essential health benefits.”
Affected patients require financial assistance. Without coverage for their prescribed medication, affected patients may qualify for assistance programs designed to help low-income and uninsured patients.
Alternative funding program enrolls patients in assistance program. Next, the alternative funding vendor tries to enroll affected patients into a charitable patient assistance program.
Assistance, not insurance, covers patients’ medication costs. If all goes according to plan, the assistance program covers most or all costs for the patient’s medication and the employer-sponsored health plan sidesteps the expense.
Unintended Consequences for Patients
Alternative funding programs treat insured patients like uninsured patients. In the process, they also introduce a host of complications, such as:
Increasing out-of-pocket costs and red tape. When patient assistance maxes out, patients must pay potentially thousands of dollars out of their own pocket. Patients must also take the time to navigate alternative funding programs, which can be exhausting and stressful.
Reduced quality of care. When patient assistance programs are not an option, alternative funding vendors may source drugs from overseas sources that are outside of the secure supply chain, exposing patients to drugs that lack safety and efficacy guarantees.
Impact on the Broader Health Care System
Alternative funding programs can also harm the broader health care system, as well as employers themselves. They can:
Divert resources away from the truly needy. Insured patients are positioned to compete with low-income patients and uninsured patients for limited assistance funding.
Introduce new challenges for employers. As employees face health complications and treatment disruptions, employers may experience an increase in absenteeism, presenteeism or staff turnover.
Worsen the drug pricing system. Alternative funding programs further complicate the already complex drug pricing system. The addition of still more middleman, coupled with the ineffective drug rebate system, bloats expenses and raises patients’ out-of-pocket costs.
If allowed to grow unchecked, these programs could further hurt patients and the broader health care system, the paper explains.
Learn more by reading, “The High Costs of Alternative Funding Programs.”
