Ty Wooldridge, FSA MAAA

Great post from Kimberly Carleson! She points out something most employers do not realize, the Big Health Insurance companies are paying their claims haphazardly, with minimal if any review. It's not their money so why should they worry about it. The reality is that they're more interested in keeping their provider network partners happy, at the expense of employers and members. They've successfully sold the "Big Lie" to most employers, that there is nothing that can be done about the rising cost of healthcare. The BUCAs use "Big Lie" as cover for their egregious claims paying tactics. Including collecting a 30% fee on claims they recoup that should have never been paid in the first place. Basically, they gat a bonus for making mistakes, whether unintentional or not. There are other options available to employers, they just have to look at them.

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Inflation Rebates. By one estimate, the list prices of about half of all drugs covered by Medicare between 2019 and 2020 rose faster than inflation. To discourage this practice, manufact. of drugs covered under Medicare Part B and Part D will be required to pay rebates to the fed. gov. if price increases for brand-name drugs without generic or biosimilar competition exceed an inflation-adjusted benchmark which started in 2023. Medicaid, a fed. program that provides health cover for low-income Americans of all ages, already receives similar inflationary rebates. #AllianceBenefitConsultants #insurance #resources #Chicagoland

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What is the new Trillion (yes, with a T) Dollar Drug? According to Senator Sanders and a report released by the HELP Committee it is Semalglutide, commonly known as Ozempic for diabetes or Wegovy for weight loss. The report states that if half of American adults with obesity take the drug, then the annual cost in 2024 would be $411 Billion which exceeds the total retail spend for all American drugs in 2022. Trended forward for increasing obesity rates and cost increases that cost would exceed $1Trillion Dollars annually in less than 10 years (insert Dr. Evil meme) Here is the greater underlying concern that I have, Sanders has claimed that this increased spend on one drug class alone could bankrupt our healthcare system. This doesn't even address the fact that there have been 20 cell and gene therapies approved in the last two years, with 30 more slated for approval in the next two with list prices ranging in the hundreds of thousands to millions of dollars. The other factor this does not address is that GLP-1 Agonists like Semalglutide are peptides that are cheap and simple to synthesize/compound for drug manufacturers. While the most immediate potential is centered on diabetes and weight loss, it will not be long until we see this category expand outward and create new classes of maintenance medications that grossly inflate manufacturer and PBM profits while adding additional stress to an increasingly unsustainable healthcare system. These are the things that keep me up at night, I'm curious to hear what other trends people are watching in the RX market.

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"The United States spends significantly more on healthcare than comparable countries do, and yet has worse health outcomes. Much of the national conversation has focused on spending on retail prescription drugs and insurer profits and administrative costs as key drivers of health spending in the United States. The Inflation Reduction Act, signed into law by President Biden in 2022, includes several provisions aimed at lowering the cost of these prescription drugs. While it is true that many brand-name retail prescription drugs are priced higher in the U.S. than in peer countries, health spending data indicates that other spending categories – particularly hospital and physician payments – are primary drivers of the U.S.’s higher health spending. This brief examines the drivers of health spending and differences between the U.S. and its peers – other Organisation for Economic Co-operation and Development (OECD) nations that are similarly large and wealthy. In 2021, the U.S. spent nearly twice as much per capita on health as these comparable countries did. Most of the additional dollars the U.S. spends on health go to providers for inpatient and outpatient care. The U.S. also spends more on administrative costs, and significantly less on long-term care." 

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