RX Insurance

Rising Costs of Health Care

  • More innovative drugs

  • Boosting AWP

  • Fewer brand names off-patent

  • Overall pharmaceutical expenditures in US were $633.4 billion in 2022

Health Insurance Components

  • Commerical insurance

  • Employer-paid insurance

  • State/Federal programs

    • Medicare (Parts A, B, C, D)

    • Medicaid

    • Tricare

    • Children’s Health Insurance Programs

  • Responsible Payment Parties:

    • First party

    • Second party

    • Third party

  • Monthly premium - fee for insurance coverage

  • Insurance policy - statement of benefits

  • Benefits - specific health services and products covered

  • Deductible - amount you must pay before insurance pays

  • Copayment - the amount you pay for a healthcare service

  • Coinsurance - specific %’s that insured must pay immediately when receiving a service or drug

  • Pharmacy benefit manager (PBM) - companies that manage prescription drug benefits on behalf health insurers

Copayments

  • Flat out-of-pocket fee that the patient is required to pay for each health visit, service, or product at the time of delivery; varies with each plan

  • Tiered Copayment System:

    • Dual copay

    • 3 to 4 tiered copay

  • Health Savings Accounts

  • Flexible Spending Accounts

Insurance Billing Codes

All insurance companies use established billing codes to communicate between providers and insurance plans

Three Types:

  1. ICD-10 used to record diagnoses and disorders

  2. HCPCS used to record supplies, equipment, and devices supplied for medical purposes

  3. CPT used to record procedures and services

Affordable Care Act

  • Requires employers with more than 50 full-time employees to offer a health insurance option

  • Enacted to help U.S. citizens struggling with the rising cost of healthcare ti have health insurance to help them with medical expenses and prescription drugs

Commerical Health Insurance

Health Maintenance Organizations (HMOs)

  • Plans that have their own staff of doctors. Patients are required to use the HMO’s doctors or other doctors who have contracts with the HMO

Preferred Provider Organizations (PPOs)

  • Plans that encourage patients financially to use doctors that have contracts with the plan. The patient’s costs are lower if they see in-network providers.

Traditional Insurance Plans

  • Patients can choose any doctors, pay a set percentage

Supplemental Health Insurance

  • Primary

  • Secondary

Other Forms of Insurance

  • Workers’ compensation

  • Consolidated Omnibus Budget Reconciliation Act (COBRA)