Workplace insurers revamping drug plan coverage: Report
Canadian insurance companies have introduced a plan to spread out the expense of high-priced drug treatments, a move they say will protect workers from the risk of losing employer-sponsored coverage due to cost.
A growing tide of high-priced specialty medicines for arthritis, cancer and other diseases is putting pressure on workplace drug plans, likely producing limits on what they cover, higher premiums and even their disappearance altogether if costs get completely out of hand.
The industry is developing a pooled system of coverage that will allow insurers to exclude the cost of certain high-cost drugs when setting premiums charged to employers. It's these open-ended committments that scare employers, prompting many to rethink the coverage they offer to their employees.
In a recent survey, one-third of companies polled admitted they would drop their drug coverage if premiums jumped by 25 per cent or more, for instance.
Workplace insurers spend a ton on money annually on narcotic painkillers, for instance. But they are also finding that the medications, if used too early in treatment, too frequently or for too long, can drive up associated disability payouts and medical expenses by delaying an employee’s return to work, according to the New York Times.
Earlier this year, the American International Group, a major underwriter said that it would no longer sell backup coverage to workplace insurers, citing rising pain treatment expenses as one reason.
What are the drug benefits like where you work? Are premiums rising? Are there more restrictions than there once were?
By Gordon Powers, MSN Money