800.223.4139

“As we’ve grown geographically, we’ve learned that it’s important to take The Alliance on the road,” said Cheryl DeMars, president and CEO at The Alliance.

Alliance employer-members and industry professionals learned the latest about health benefit design challenges and how to address them. That was the focus of the Employer Connections event at Northern Illinois University’s Rockford Campus.

Content was geared toward Illinois-based employers and featured an all-star speaker line-up. The Alliance is planning future Employer Connections events throughout our service area. Contact Member Services if you would like an event for employers in your area.

Jump to:

American Patients First Blueprint and What Employers Can Do

The American Patients First blueprint is the Trump Administration’s plan to lower drug prices and reduce out-of-pocket costs. This plan, proposed in May 2018, is designed to lower drug prices for consumers.

The plan is organized into four, themed solutions: increasing competition, bettering negotiations, lowering list prices and lowering out-of-pocket costs. Making prices more transparent is an important component.

The document was originally met with poor public reception because the market and the public did not understand the implications. Two expected items that had been advocated by Democrats were excluded from the proposal:  allowing Medicare to negotiate directly for lower drug prices and promoting the importation of medications from other countries.

On Oct. 10, 2018, President Trump signed into law two bills to prohibit pharmacist gag clauses in Medicare Advantage and Part D plans as well as in commercial insurance plans.

“These clauses prevented the pharmacist from informing the patient that there is a lower-cost option available if they pay cash,” said Alex Jung, managing director at EY-Parthenon.

A probable next step will curtail drug company maneuvers to delay patent expirations, which are costly to employers and consumers alike. Drug companies with high-cost, high margin drugs are currently able to extend their patents by finding some new use for the medication. When this occurs, it prohibits development of less-costly generic alternatives.

Jung also noted that high-deductible health plans (HDHPs) have caused more consumers to be non-compliant with their prescribed medications.

“Over 40 percent of prescriptions that are written, are never presented for dispensing. And of the prescriptions that are filled, another 40 percent are never picked up by patients,” said Jung.

The New Era of Pharmaceuticals

“We are living in a different era of pharmaceuticals, said David Galardi, PharmD, business development consultant to Payer Matrix and a founder of Apogenics, Inc. “Personalized and specialized medicines are here.”

The specialty drug market has exploded in recent years. The first specialty drug hit the market 30 years ago. Today there are over 400 specialty drugs available.

Galardi cautioned the audience about becoming distracted or confused by various pharmaceutical pricing schemes. “All discounting in pharmacy has nothing to do with money and everything to do with product tracking,” said Galardi. “Discounts, list price, average wholesale price – none of it matters. At the end of the day, only the net price matters.”

What can employers do? Galardi offered the following three suggestions:

  1. Go back to basics. Focus on net price, not percentages. Use administrative fee-based pharmacy benefit management (PBM) arrangements with 100 percent of the rebate coming back to the plan sponsor.
  2. Be smart when writing your benefit plan document. Make sure your plan document is written using clear and unambiguous language. Do not add lengthy addendums to your benefit plan document.
  3. Dilute the networks to reduce the cost. Increasing the competition lowers the cost.

Federal Legislative Update from the ERISA Industry Committee (ERIC)

James Gelfand, senior vice-president Health Policy at The ERISA Industry Committee (ERIC) gave an update on the federal legislative activity impacting employer-sponsored health insurance. ERIC is the only national association that advocates exclusively for large employers on employee benefit public policies at the federal, state and local levels.

ERIC’s top three priorities for the current session of Congress are:

  1. Affordable Care Act (ACA) Taxes – repealing the Cadillac tax and health insurance tax (HIT).
  2. Prescription drug costs – including PBM transparency and an end to delaying patent expirations.
  3. “Surprise” medical billing – especially air ambulance billing.

Gelfand referenced out a bill sponsored by Rep. Joe Courtney (D-Conn.) that has been gaining quite a bit of traction in Congress. H.R. 748 Middle Class Health Benefits Tax Repeal Act of 2019 would repeal the Cadillac tax. If passed, it would take effect Jan. 1, 2020.

Illinois Legislative Update

Cheryl DeMars, president and CEO at The Alliance, gave an update on Illinois legislative activity of potential interest to employers with self-funded health benefit plans.

Governor Pritzker’s budget proposal includes a Managed Care Organization (MCO) tax. As currently structured, this 1 percent tax on health care claims would apply to Medicaid MCOs, commercial insurers and third-party administrators (TPAs) that serve self-funded employers. Some version of this tax is likely to pass, since it would generate significant matching funds from the Federal Government.

The Illinois legislature has formed a new committee whose sole aim is prescription drug affordability. The Committee is chaired by Rep. Will Guzzardi. Rep. Lamont Robinson is the vice chair.

DeMars noted that self-funded employers may question whether state laws apply to their self-funded plans, since self-funding is governed by ERISA which pre-empts state law. Recent case law though suggests that it is important for self-funded employers to be involved in state-level health policy debates. State laws can and do apply to vendors like PBMs and TPAs who serve self-funded plans and therefore impact self-funded plans indirectly.

DeMars stressed the importance of sharing stories with The Alliance about how regulations impact businesses and employees with legislators. “Sharing stories from real employers who are constituents has an impact on legislators,” DeMars noted. She also encouraged members with an interest in this area to consider joining The Alliance’s Health Policy Committee.

More Employer Connections Events to Come

The Employer Connections in Northern Illinois event was a great success! The discussions generated at this event by area employers were insightful. We look forward to taking The Alliance “on the road” again in the future.

Download the presentations and more from the Employer Connections in Northern Illinois event.

View a listing of our upcoming events and register to attend.

Health policy updates in the form of a game show? Check out this blog article from our Health Policy event.

 

Learn More

    • Download the presentations and more from the Employer Connections in Northern Illinois event.
    • View a listing of our upcoming events and register to attend.
    • Health policy updates in the form of a game show? Check out this blog article from our Health Policy event.
Lisa Wendorff

Lisa Wendorff

Marketing Communications Specialist at The Alliance
Lisa Wendorff joined The Alliance in 2015 and currently serves as the cooperative’s marketing communications specialist. Her responsibilities include the development of effective communications and marketing materials for Alliance members and business partners.

Previously, Lisa worked at a founding member of The Alliance for 17 years as a marketing specialist. Lisa received her master’s degree from the University of Wisconsin-Whitewater in Communications with an emphasis in Corporate Communications.
Read Lisa's latest posts.
Lisa Wendorff

Pin It on Pinterest