News and Blog

Friday, 21 June 2019
Amazon - Books, Music, Prescriptions?

In the summer of 2018 Amazon purchased PillPack a mail order prescription company that packages all your prescriptions in individual daily packets. PillPack had an amazing concept and Amazon wants to scale it worldwide. The nearly $1,000,000,000,000 ($1 Trillion) pharmaceutical industry has long been controlled by Pharmacy Benefit Managers. These are the middle men between those who manufacture the medicines and the individuals, insurance companies or Medicare who pay for them. 

PBMs create very confidential and secretive pricing practices where no one really knows the actual cost of a medicine especially the end user. What happens many times is a prescription has a retail price the customer pays but behind the scenes the insurance company receives a cash rebate or credit for that prescription reducing their actual cost. How much is the rebate you ask? Only the PBM and insurance company know and they claim it is used to keep health care prices lower for everyone. 

Congress is working hard to create more transparency in drug pricing and do away with behind the scenes rebates and discounts. There is of course a lot of pushback from the pharmacy lobby in Washington so time will tell if this does in fact lower pharmacy costs. 

Amazon on the other hand could do to prescriptions what they have done to buying pretty much anything else. It seems they are already talking with insurance companies about working directly with them and cutting out the PBMs or middle men. This is not welcome news to the decades old pharmaceutical industry and they are pushing back. While it may take years it seems, we may soon be getting lower cost medications delivered to our doors with just the push of a button. 

Here is a very interesting article and videos that better explain how this disruption could take place. These are of course my thoughts and opinions but I have worked in the health insurance industry for 25 years. 

Posted on 06/21/2019 11:12 AM by David Moore
Tuesday, 18 June 2019
Trump's HRA ruling - any real change here?

Before the ACA, small employers had the option to "reimburse" employees with tax-free dollars for their individual health insurance policies. The Affordable Care Act wanted all policies to go through the exchanges and businesses to offer ACA compliant plans to their employees so Health Reimbursement Arrangement's for individual policies were eliminated. 

As President Trump and his administration look for ways to create affordable health insurance options they are re-allowing employers to reimburse employees who have individual policies. This is great news except there are no longer any affordable individual policies available. Without qualifying for a subsidy, small group policies are less expensive and offer the same qualified benefits. Some are saying short-term policies could work in this situation but too are costly and the benefits are quite limited.

So what's the point? I believe it is about talking points and "trying" to find solutions. If the carriers are unable to offer policies that can have "pre-existing" conditions and medical underwriting we will not see low cost medical plans again and HRA's won't make much sense. 

Here is a very good article from Forbes about this issue. 

Posted on 06/18/2019 4:01 PM by David Moore