Pharmacy Insurance Basics

PHARMACY INSURANCE BASICS

Objective: After completing this module, the learner will be able to explain what pharmacy insurance is, how
it works, ways people obtain (become members), and discuss concepts relating to pharmacy
insurance.

eLearning Module
When directed in the eLearning module, write the following information:
Terms / Definitions
Commercial __ Member sign up for health insurance with their employer who utilizes one of the
BCBS plans that own or are associated with PRIME.
__
DTE _Direct to Employer groups are employers who contracts to use Prime on
their own. Usually, these clients have health insurance that is not through BCBS. _
__
Medicare Federal health program for those 65 and older or disabled under 65.
__
Medicaid Federally administe4red health program for low-income individuals.
__
Individual Market Individuals who purchase health insurance directly through an insurance
marketplace mandated by the affordable care act.
__

Prescription Drugs and the Pharmacy Benefit

Why has the cost doubled in 10 years?
1. People Living Longer
2. Increased Advertisement
3. Increased Capabilities

Methods PRIME uses to manage cost

1. Pur chase Me ds in B ulk
2. Contract with retail pharmacies
3. Use network or meds won’t be covered

Notes: clients we manage, BCBS, Federal Gov, Direct to Employer, Individual market

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Setting Insurance Prices

Exclusion _
Premium _
Co-pay
Co-insurance _
Deductible THE AMOUNT YOU PAY FOR HEALTH CARE SERVICES OR RXEACH YEARBEFORE THE
INSURANCE YOUR INSURANCE BEGINS TO PAY
Out of Pocket _THE MOST YOU HAVE TO PAY DURING A POLICY PERIOD
Coverage Limit
Accumulators

Exercise 1: We will do this as a class – Do Not Complete during you e-learning module.

Plan A: Deductible: $100 per individual - Deductible does not apply if generic
Cost Sharing (Mbr Pays): Non-Preferred BRAND: $100
Preferred BRAND: $50
Generic: $10
OOP: $1000 per individual - Member has spent $0 on medication this year.
Coverage Limit: N/A
Prescription 1: generic with a drug cost of $72.00. How much is the member required to pay? $10
Prescription 2: Preferred BRAND with a drug cost of $96.00. How much does the member pay? $96
Prescription 3: Preferred BRAND with a drug cost of $96.00. How much does the member pay? $54
Prescription 4: Non-Preferred BRAND with a drug cost of $327.00. Member pays how much? $100
Prescription 5: generic with a drug cost of $72.00. How much does the member pay? $10
After these prescriptions have been paid for, how much has been applied towards OOP? $270

Plan B: Deductible: $100 per individual - Deductible does not apply if generic
Cost Sharing (Mbr Pays): Non-Preferred BRAND: 25% - $ spent on non-preferred does not
apply toward OOP.
Preferred BRAND: 15%
Generic: $10
OOP: $1000 per individual - Member has already spent $827 on medication this year,
nothing has applied to the deductible.

Prescription 1: generic with a drug cost of $72.00. How much is the member required to pay? $10
Prescription 2: Preferred BRAND with a drug cost of $96.00. How much does the member pay? $96
Prescription 3: Preferred BRAND with a drug cost of $96.00. How much does the member pay? $17.80
Prescription 4: Non-Preferred BRAND with a drug cost of $327.00. Member pays how much? $81.75
Prescription 5: generic with a drug cost of $72.00. How much does the member pay? $10
After these prescriptions have been paid for, how much has been applied towards OOP? $133.80
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Insurance in Action! Mail Process

Notes: step 1. Member receives RX from their MD

Step 2. Member sends RX to Prime (mail pharmacy)

Step 3. Prime determines cost for the member responsibility

Step4. Member pays their cost deductible/copay

Step5. Member receives their meds

Step6. Prime determines owed (RX$ payment)

Step7. Prime submits bill to plan

Step 8. Plan pays prime money

Insurance in Action! Retail Process

Notes: step1. Member receives rx from MD

Step2. Member goes to network pharmacy

Step3. Pharmacy determines cost by submitting a

test claim

[Link] pays cost deductible or copay

Step5. Member get meds

Step6. Pharmacy submits live claim to prime

Step 7. Prime determines owed payment

Step8. Prime sends payment to pharmacy step9. Prime submits bill to plan [Link] pays prime

Exercise 2: We will go over this exercise as a class.

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1. When a prescription is filled using Mail, who pays Prime any money owed after member cost? _plan
2. How does Prime determine how much this is? Minus Members cost
3. On a retail claim, how does the pharmacy determine the member’s cost? Test claim then live claim to prime

4. How does the pharmacy ’tell’ Prime how much is still owed? Live claim
5. Who pays the retail pharmacy any money owed after copay? prime
6. Who ultimately pays any money owed (besides member cost) on a retail claim? prime
7. In these two examples, what is the member responsible for doing /paying before anything can take place?
deductible

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Note Taking Page

Use this page to jot down notes from the e-learning module on the following topics:

BRAND / generic
Brand is referred to the manufacturer that invented the drug that was approved by
the FDA and is in clinical trial period which no one can duplicate the drug, generic is
referred to as and equivalent active ingredient that makes the meds do what it does! The
only difference between the two ae the non-medicinal ingredients that give taste, color,
or texture.

Formulary / Non-Formulary
Formulary is covered and usually preferred. Nonformulary is not preferred, and
some plans won’t cover non formulary meds, while others will at a higher copay.

Determining Formulary
Prime doesn’t make the decisions concerning the formulary ultimately the plan does.
The two parties work together to come to an agreement. (Not covered, covered, non-
preferred, preferred based on the guidelines)

Retail Pharmacy Network

The plan determines the retail network the member can use because they can
change things in the formulary and costs could change.

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Plan Structure ABC

We will break you into groups to do this activity. Do Not Complete during your eLearning. Your team has been
tasked with putting together the Pharmacy Benefit package for the year for your company. You are given a
total budget of $1,000,000. You’ve contacted your Plan, and the prices to cover your employees with
prescription coverage is below.
You must select a deductible and must cover generics and preferred brands. You are not required to cover
non-preferred brands, or have an OOP maximum, however, employees have had these benefits in the past
and are expecting them.
With your team, discuss which features you will provide your employees, and be ready to discuss with your
’Board of Directors.’
Benefit Cost
Deductible $0 $500,000
Deductible $100 $300,000
Deductible- $250 $100,000
Deductible $500 $ 50,000

Copay generic $0 $250,000

Copay generic $10 $150,000
Copay generic $20 $ 50,000
Copay Pref. BRAND $0 $500,000
Copay Pref. BRAND 10% $300,000
Copay Pref. BRAND 20% $200,000
Copay Non-Pref. BRAND $0 $750,000
Copay Non-Pref. BRAND 10% $500,000
Copay Non-Pref. BRAND 20% $350,000
Copay Non-Pref. BRAND 30% $200,000
Copay Non-Pref. BRAND 40% $100,000

OOP Max $1000 $250,000

OOP Max $2000 $200,000
OOP Max $3000 $100,000
OOP Max $5000 $ 50,000

Our Decision
Deductible $ Cost $ Why: reasonable pricing for employees no matter the scope
100,000 of ppl.

Copay generic $ 10 Cost $ 150,000 Why: low cost for meds for our employees

Copay Pref. BRAND 10% Cost$ 300,000 Why: still want to give our employees some
type of benefit and low cost

*Copay Non-Preferred BRAND Cost $ 30% Why:200,000

*OOP Maximum $ 1,000 Cost $ 250,000 Why: it’s a give and take relationship everybody
gets what they need.

* Not Required
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Prime / Member Responsibility

Insurance Company Responsibilities
When directed in the eLearning module, write the following information:
1. collect premium
2. explain benefits
3. process claims
4. timely payment of claims
5. advise the insured of benefits changes

Member / Policyholder Responsibilities (Insured):

1. pay the premium
2. provide insurance to prescriber and pharmacy
3. pay out of pocket expenses
4. file claim quickly

Being a PRIME Performer - FIVE WORDS

1 honest

2. direct

3. alert

4. inspiring

5. determined

Member Call - Answer these questions as you listen:

What did the agent explain about how we know the member’s cost? The plan has a deductible of
$1500 dollars for brand prescription only, which for the medication his son is needing there are no
generic RX only brand RX, and unless you met that $1500 deductible or having to take enough brand
RXs then it will be oop expense 40% discounted as in his plan.

How much did the member save with their insurance over not having any insurance at all? Explain
how this was calculated. The cost of that RX was $ 130 w\o insurance and w\insurance the cost
was $112 so a savings of $18

What kind of an experience do you feel the caller had? I thought the call was a great call William was
extremely patient and knowledgeable going the extra mile.
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