America's Benefit Specialist October 2023

NOTEWORTHY

strain. And that figure rises to 41% among those with ongo ing major medical issues. Out-of-pocket medication expenses are straining some consumers’ wallets—especially those with ongoing medi cal issues. Of the 64% of Americans who take prescription medication, just 50% say health insurance fully covers related costs. Among those who have to pay at least a portion of their medication costs, 31% view the expense as a financial strain. That figure rises to 41% among those with ongoing major medical issues. The Affordable Care Act made health insurance more accessible, but health plans don’t always cover full pre scription costs. Of those without full prescription coverage, 90% say their insurance covers part of their prescription costs, leaving 10% on the hook to pay retail prices. Across all Americans, 17% have gone into debt to afford their family’s prescriptions, and that rises to 28% among those with ongo ing major medical issues. Those who struggle with the cost of prescriptions are forced to make difficult financial and personal health deci sions. Almost a third (31%) of Americans have skipped filling a prescription, mainly because they couldn’t afford it (37%) or their insurance wouldn’t cover the cost (25%). The good news is that there are strategies and tactics to lower the cost of prescriptions, but the majority of Amer icans are unaware. Just 31% of Americans have used an online pharmacy. But those who have felt the benefits, with 78% saying their insurance covered it and 81% saying it was cheaper. Additionally, just 33% of Americans have switched pharmacies to take advantage of lower costs. Aside from using a different pharmacy, there are other ways Americans paying for prescriptions can save. Seventy-nine percent of Americans without full coverage haven’t negotiated the cost of a medication with their insurer, 75% haven’t con tacted the drug manufacturer to ask about pharmaceutical assistance programs and 56% have never asked their health care provider for alternative prescriptions covered by insur ance. Additionally, 62% of Americans have never used coupons to save on prescription costs or websites to track prices. Visit www.valuepenguin.com/prescription-costs-survey for more details. TRENDS IN SELF-INSURED HEALTH PLANS Since the passage of the ACA, there has been much specu lation that an increasing number of small and midsize em ployers would convert their health plans from fully insured to self-insured plans. The rationale has been that several of the key ACA components—creditable coverage, affordabil ity, essential benefits, and various taxes and fees—would drive up the cost of health coverage, thus possibly making self-insurance, which is viewed by many as generally less expensive than fully insured alternatives, a more attractive option for many employers. Self-insurance would become

NEW RESEARCH: FIXED-INDEMNITY PLANS OFFER GREAT VALUE FOR MILLIONS OF HARDWORKING AMERICANS Millions of American businesses and their employees value the additional protection offered by fixed-indemnity and specified-disease plans, which cover costs not covered by tra ditional major medical insurance. That’s the takeaway from a new survey of health insurance providers who offer these plans to employers. The survey was conducted by AHIP, American Council of Life Insurers and the Blue Cross Blue Shield Association. Nearly 40 insurance providers responded to the survey, which was conducted between July 30 and September 7. The survey requested information regarding the number of cur rently in-force policies, as well as member feedback, during the 2022 benefit year. For fixed-indemnity coverage, respondents collectively covered nearly 8.2 million people in either group or individual fixed-indemnity plans. Nearly 80% of people covered received their coverage through an employer or purchased their indi vidual plan at their worksite. From those covered, insurance providers received less than 2,500 complaints for the year—a rate of 0.0003%. For specified-disease plans, respondents collectively covered more than 17.2 million people in either group or individual plans. Nearly 85% of people covered received their coverage through an employer or purchased their individ ual plan at their worksite. From those covered, insurance providers received about 3,500 complaints for the year—a rate of 0.0002%. “This survey shows that millions of hardworking Americans and their families get a lot of value from fixed-indemnity and specified-disease plans,” said Jeanette Thornton, executive vice president of policy & strategy at AHIP. “These plans are important, providing American businesses with more choices to nurture a great workplace, and providing additional finan cial security and peace of mind for their employees.” “The benefits from these plans reduce the financial strain on families caused by copays, deductibles, coinsurance and other out-of-pocket costs,” said Cindy Goff, ACLI vice presi dent, supplemental products & group benefits. The survey was released in concert with AHIP’s comment letter on the proposed rules and request for information on these supplemental health insurance products. A THIRD OF AMERICANS SAY PRESCRIPTIONS ARE A FINANCIAL STRAIN BUT MANY DON’T TAKE ADVANTAGE OF WAYS TO LOWER COSTS According to the latest ValuePenguin survey of more than 1,900 Americans, 31% of consumers who pay for at least a por tion of their prescriptions say those expenses are a financial

6 ABS | benefitspecialistmagazine.com