Presentation courtesy of Suzanne Lepage Consulting. This presentation is entitled “Understanding your health insurance at work”. It was co-hosted by Bill Dempster of 3Sixty Public Affairs and Suzanne Lepage from Suzanne Lepage Consulting. The presentation provides insight into the following aspects of work health insurance for medications. Overview of the structure and operation of Canada’s private drug plan marketplace, including the important distinctions and/or overlaps between private (insurance) and public (government) providers Explanation of the role and place of medication coverage within the supplemental health benefits plans of life and health insurance companies which provide pharmaceutical coverage Identification of the various providers and influencers which contribute to private formulary (lists of drugs which are covered) decision-making and their roles in the system Understanding generally what gets covered, by which plans and under what circumstances and which medications are typically subject to restrictions Guidance on how to determine which medications are covered Exploration of how patients and caregivers can navigate through the complex private plan system including: Who should provide answers regarding coverage and eligibility? What you can do if you run into coverage restrictions/rejections? How should patients interact with the private payer community generally? What are some of the current obstacles/barriers for successful patient involvement in drug plan decision-making, and what are the strategies/approaches to address them?

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“Understanding your health
insurance at work”
Webinar
June 4, 2014
Canadian Cancer Survivor Network (CCSN)
Suzanne Lepage, Private Health Plan Strategist
William Dempster, 3Sixty Public Affairs

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Overview
1. Private vs Public Drug Plans
2. Private Market Overview
3. Drug Plan Designs
4. Private Drug Plan Cost Pressures
5. Emerging Trends
6. Patient’s Guide to inquiring about Private
Drug Coverage
7. Questions and Discussion

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Private vs Public Plans
• Employers view drug coverage as part of
compensation package, not for health
• Private payers don’t have the same transparency as
public plans
• Confidential “Business to Business” transactions
• Concern about competitors gaining market
intelligence

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Private vs Public Plans
• Insurers’ specific drug coverage decisions or criteria
rarely communicated publicly
• Confidential communication targeted at their
customers: Plan Advisors and Plan Sponsors
• Plan Members can access their own coverage
information via insurer call centre or secure web
portal

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1. Premiums based on the makeup of their group and
claims experience from previous years
2. Pool charges for extra risk protection for claim costs
that go over a threshold e.g. $10,000 per year
Employers pay for health benefits

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•When it comes to group drug benefit coverage, there
is no real “insurance”:
1. If drug claims increase - the insurer will
increase the plan sponsors premiums at
renewal to reflect the increased costs
2. If the volume or size of claims in the pool go
up – so will the plan sponsor’s pool charges
Drug Benefits are not “insurance”

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Plan Members
~ 19M
Plan
Sponsors
~400-600K
Plan
Advisors
~3,000
Insurers
~15
Pharmacies
~8400
PBM
~3
Unions

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Prescribed
Prescription
/Open
Provincial
Managed
Formulary
Frozen
/Custom
Formulary
Formulary
Co-pay
Multi tiered
plans
Sliding
Coinsurance
DeductibleFlat co-pay% Coinsurance
Limits
Quantity
Limits
Days
Supply
Trial
Script
Ther. Class
Limits
Ther. Class
Incl/excl.
Pricing and
Maximums
Disp Fee
Caps
Lifetime
Maximum
Annual
Maximum
Generic
Pricing
Allowable
Price
Plan Sponsor Plan Design Decisions

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Private drug plan costs
44% had health benefit rate increase1
1- Group Benefits Prescription Drug Outlook
2-Express Scripts Canada 2012 Drug Trend Report
Health Benefit Cost = 9.44% of payroll1
Private drug plan avg Rx cost down 0.73%2

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Specialty (biologic) drugs
22% of drug spend
1.2% of claims
13.3% per year increase
[vs 4.2% decrease for other drugs]
Est. to be 25-30% of spend in 2017
Express Scripts Canada 2012 Drug Trend Report
Avg cost per Rx is $1,240
[vs $46 for other drugs]
55% of new drug approvals
64% of pipeline drugs

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Emerging Trends

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Emerging Trends
1. Case management of drug claims
2. Mandatory generic pricing
3. Increase in preferred provider pharmacy networks
4. Therapeutic substitution
5. Specialty drugs targeted
6. Growth of formularies
*These trends are not mutually exclusive. They can be layered on with a “multiplying effect”

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“My drug is not covered!!!”
Strategies are situational
Do you know why drug is not covered?

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Possible reasons a drug may not be covered by a private plan
Reason Potential Strategy
1
New drug still under review
DIN not listed on payers system
Ask when review will be completed
and decision(s) will be made
2
Drug plan mimics the provincial
formulary
Provincial formulary doesn’t
cover the drug
Listing on provincial formulary

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Possible reasons a drug may not be covered by a private plan
Reason Potential Strategy
3
Drug is part of a class that is
excluded/limited on drug
plan
Employer would have to change drug plan
4
Drug plan is managed
formulary
Formulary manager has
reviewed the new drug and
decided not to cover
Ask formulary manager why they decided
not to cover drug. Clinical or cost
effectiveness?
Develop strategy to appeal decision

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Possible reasons a drug may not be covered by a private plan
Reason Potential Strategy
5
Drug Plan has specific criteria
that must be met for patient
to be covered for drug
(diagnosis, prior treatment,
step therapy, infusion
location)
Patient does not meet
criteria
Ask formulary manager why they decided
on specific criteria for this drug
If criteria does not align with approved
indications or guidelines, develop strategy
to appeal decision
6
Drug plan requires that the
patient try to access
alternate coverage first
e.g. special government
program
Ask if there is an opportunity for interim
coverage by the private plan while they
wait for the alternate program to review
patient application
Apply for alternate coverage

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Possible reasons a drug may not be covered by a private plan
Reason Potential Strategy
7
Drug is covered, but patient
has reached their individual
maximum on their plan
Employer would have to change drug plan
or allow patient exception
Explore other potential coverage (e.g.,
catastrophic drug coverage in your
province)

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How do private drug insurance programs
align with the public drug plans?

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Patient’s Guide to
inquiring about
Private Drug Coverage

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1. Ensure you have employee (and spouse if applicable) drug
plan:
• Contract or policy number
• Personal certificate or identification number
2. Get a copy of the benefits booklet that outlines the
employer benefit plan
3. Get the phone number for the insurance company
4. When calling the insurance company they will ask which
drug the inquiry is about:
• Drug name
• DIN (Drug Identification Number)

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5. If you are told the drug is “Not Covered” get more
information on why the drug is not covered
– “Can you please explain why this drug is not covered by the plan?
– I am not familiar with insurance coverage. Could you help me
understand why this plan does not cover this drug? I have the
benefits booklet right here. Can you explain to me the specific terms
that explain why this drug is not covered?”
– “If you are unable to help me, can I please speak to someone who
can? Can you transfer me to your supervisor?”
• If you are referred back to your employer:
– “Thank you, but for privacy reasons, I would rather not discuss my
(or my family member’s) medical condition and medication needed
with my employer. Can you please explain to me why this drug is
not covered?

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6. Consider asking your employer (plan sponsor) for an exception.
• Because the employer chose the plan, they may have the
opportunity to ask the insurer to pay for a drug that is not
covered by the drug plan - this is called an “exception” or “extra-
contractual coverage”
• The ability to request or negotiate exceptions depends a lot on
the size of the employer and their financial arrangements with
the insurance company
• Develop the “business case” of why the employer should cover
the drug
• If necessary get assistance from a physician or support group to
make the case for drug coverage
• Put the request and all supporting evidence in writing
• Arrange a meeting with a manager, Human Resources or Benefits
Department, as appropriate

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Summary
1. Private vs Public Drug Plans
2. Private Market Overview
3. Drug Plan Designs
4. Private Drug Plan Cost Pressures
5. Emerging Trends
6. Patient’s Guide to inquiring about Private
Drug Coverage
7. Questions and Discussion

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Questions and Discussion
Suzanne Lepage
(519)954-8873 (Business)
(519)635-5175 (Cell)
suzanne@suzannelepage.ca
www.suzannelepage.ca
ca.linkedin.com/in/suzannelepage/
@suzannelepage