All of us at D&S are worried about the increasing cost of prescription drugs. For many, the therapeutic value provided through maintenance medications is crucial to those living with and effectively managing their chronic diseases.
Effective January 1, 2023 Kroger is discontinuing their agreement with Express Scripts who is the pharmacy benefit manager for fully insured contracts underwritten by Cigna, Optima, and United Health Care.
Insurance carriers know current cost increases must be more effectively managed. “More than 1200 drug products saw price hikes… between July 2021 and July 2022 with an average increase of 31.6%”. Specialty drug costs lead the way, followed by diabetic medications, especially in lieu of legislation helping to make insulin more affordable. It seems as though the private sector health programs always end up absorbing the costs that are shifted.
We still believe that for any healthcare consumer High Deductible Health Plans, which allow employees to contribute to their own Health Savings Account, to be the best solution. Employees and their dependents that contribute to their own personal HSA not only eliminate payroll taxes, but also have the option of investing these funds. HSA legislation allows these funds to ultimately be used to reimburse medical, dental and vision claims on covered family members through age 27 whether insured or not.
For those that are Kroger RX Club members, paying for you and your family’s prescriptions with an HSA card delivers a cost to you normally less than a carrier’s allowable charge! It is a great strategy to contribute enough to your HSA annually to cover your family’s known prescription drug costs. For those having a difficult claim year, cash payments made through an HSA transaction, in most cases, may be filed with your insurance carrier for credit against deductible and out of pocket maximum accumulators.
We will continue to see large prescription retailers buying up smaller ones. We will continue to see prescription benefit managers limiting retail sales of maintenance medications after two or three fills. We will continue to see prescription benefit managers buying insurance carriers to control marketshare. We will continue to see prescription drug managers in search of manufacturers rebates which at times approach 15%. Imagine what CVS accumulates annually in rebates by insuring 25% of the insured American population!
Learning how to manage prescription drug costs (with pretax contributions, deferred investment and tax free reimbursement) is critical. Accumulating funds in HSA’s over the years is most certainly a strategy that everyone needs to implement. After all, it is your hard earned money.