By GREGORY N. HEIRES
Years ago, the union’s dental benefit accounted for the greatest portion of the DC 37 Health & Security Plan’s budget.
But today, the prescription drug benefit gobbles up nearly 80 percent of the plan’s annual spending, leaving fewer funds for other benefits, such dental, and vision and podiatry services.
The relentless price increases of the unregulated drug industry now threaten to exhaust the plan’s reserves.
“Prescription drugs are really hammering us,” said the plan’s administrator, Willie Chang. “We are exploring ways to improve the financial health of the drug benefit and how to protect it.”
Earlier this year, the plan withdrew $10 million from its reserves in order to pay for the soaring cost of prescription drugs. It anticipates using at least $20 million more from the reserve before the end of the 2016 fiscal year on June 30.
“The pressure on our drug benefit reflects a nationwide problem,” DC 37 Executive Director Henry Garrido said.
“Drug plans everywhere are struggling to deal with skyrocketing costs,” Garrido said. “Because of the lack of government control over prices, the pharmaceutical industry can basically charge whatever it wants for its products.”
A common misperception is that dues pay for the drug benefit. Actually, it is funded by city contributions negotiated during contract talks. This year, the city is contributing $1,790 for each covered individual in the plan. That current rate isn’t enough to cover the plan’s benefits.
The demographics of the union add to the financial pressure on the plan. The average member is 46 years old. As members get older, their prescription drug usage will significantly increase.
To preserve the prescription drug benefit, the plan is looking at funding alternatives, benefit modifications and hiring a new prescription drug manager, which processes claims, runs a mail-order pharmacy, provides specialty drugs and negotiates drug prices.
The plan is also appealing to members and retirees to help address rising costs by becoming better consumers.
The plan recommends some ways you can help:
- Use generic drugs: Generic drugs are as safe and effective as more expensive brand-name drugs, according to the Federal Drug Administration.
The DC 37 Prescription Drug Benefit is a generic-based plan. Members generally use the less costly drugs. Members who take brand-name drugs should discuss generic alternatives with their doctor.
Retirees, who have their own Medicare Part D plan, could help the plan save significantly by using generics more often. They are not required to use generics, but they do pay more if they opt for brand-name drugs. The plan assumes a greater cost when brand-name drugs are used.
- Shop at the pharmacy with the lowest prices: Retirees can go to the Internet portal of United Health Care to find out about the pharmacies that offer the best prices. By doing that, they can lower their out-of-pocket expenses and help the plan save as well.
- Purchase drugs through the mail-order program: The mail-order program, designed for persons with long-term medical conditions that require maintenance drugs, offers 90-day supplies of drugs for two co-payments rather than three co-payments which is the charge at a retail pharmacy. Besides helping members and retirees save, the program also reduces the plan’s costs. The plan pays less for drugs purchased through the mail-order program than it does for medications at pharmacies.
Over the long term, of course, members and retirees can cut back on their reliance on prescription drugs by leading a healthier life style. The city worked with EmblemHealth to set up a wellness program for diabetics. And you can find out about wellness programs by contacting your insurance plan. – See more at: http://www.dc37.net/news/PEP/1_2016/union_drug_benefit.html#sthash.b7L4smK1.dpuf