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Shopping Around for Coverage

Keeping the Medications You Need in Reach

Drugs: Prescriptions are the most-often used benefit of a plan, but many people seem to overlook them. Here's how to get what you want.


Jerry Grassmeier was enjoying good health two years after having a liver transplant when he received a letter one day from his health plan.

It informed him that the plan had been sold to another company and that it would no longer be covering the antirejection medications he needed daily to keep his new liver functioning.

The Santa Clarita man's story bears some important lessons for anyone picking a new health plan: Don't forget to check out the plan's prescription drug benefit. And know what actions you can take to get the medications you need.

"What really devastated me was that their approach was so nonchalant," says Grassmeier, 59, who found another plan that would cover the cost of medications ($1,300 for a 110-day supply). "They suggested I try another plan. They put it all on me. Cold. Flat-out. One day you have it, one day you don't. I was really panicking."

During open enrollment, most of us focus on which doctor to select. You might also check out which hospital you would be sent to, should the need arise. But if you don't examine whether the health plan pays for particular medications and what your co-payment would be, you may be stumbling into the wrong plan.

Pharmaceutical benefits are important "because it's the thing you use more often than any other benefit," says Del Konner, president and chief executive of Pharmaceutical Care Management Assn., an Arlington, Va., firm.

There are many reasons consumers should give equal weight to their drug benefit, says Kassy Perry, executive director of Citizens for the Right to Know, a Sacramento-based consumer coalition representing dozens of nonprofit health groups.

"The prescription drug benefit is often the first interface a consumer has with their health plan and the most cost-effective portion of the health care dollar," Perry says.

Drug makers are increasingly churning out new therapies that represent significant advances in fighting disease and can dramatically improve people's health and lives in general.

On the other hand, health insurance experts point out, some breakthrough drugs--Viagra for impotence and Raloxifene for osteoporosis, for example--carry steep price tags that can help drive up the cost to employers of providing a pharmaceutical benefit.

In the 12 months ended in June, Americans spent $87.8 billion on prescription drugs--up from $81.1 billion in calendar year 1997, according to Nancy Duclett of IMS Health, a health care information company.

John Jones, director of pharmacy networks and legal affairs for PacifiCare, says health plans are anticipating a 15% increase in drug costs.

"There has been a great deal of pressure on the prescription drug benefit," notes Susan Pisano, vice president of the American Assn. of Health Plans, a Washington, D.C.-based industry group. "The cost of the benefit has been rising much faster than other elements of the benefit package. Health plans recognize how valuable the benefit is and are working very hard to maintain an affordable drug benefit."

New Laws Next Year to Protect Consumers

The tug of war between consumers trying to obtain medications and insurers trying to keep a lid on costs has led to numerous consumer complaints and resulted in new laws that will affect most Californians.

Beginning in July 1999, two new consumer-protection laws will go into effect. One law requires insurance companies to disclose their prescription drug formularies. The formulary is the catalog of products that the plan will pay for. Another law ensures that a patient can continue taking a particular medication if it is dropped from the formulary or if the patient switches health plans.

Insurance industry experts say formularies are necessary to control costs, ensure quality and track prescribing patterns. Formularies influence doctors to use prudence when choosing drugs and to balance cost with quality. They also help doctors resist pressure from drug company salespeople and cope with the often overwhelming task of keeping up-to-date on some 15,000 different drugs, with new ones coming out every day.

"Formularies started in hospitals more than 40 years ago," says Konner. "The idea was that there is no reason for a pharmacy to carry 50 different kinds of aspirin, for example."

Until now, however, it has been difficult for consumers to see a formulary or even confirm that their health plan has one. A Citizens for the Right to Know survey of California health care companies released in April found that only about one-third of health plans responded to a request to view their formularies. (That number is up from a similar survey in 1997, when 21% of companies responded positively to the request.)

The new law will assist consumers who rely on a specific medication. "This has been a huge issue for some people, such as the mental-health community," Perry says.

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