New Pharmacy Allowance Plan

Physicians may begin seeing Humana-insured patients who have a relatively new pharmacy benefit, which is structured very differently than the traditional copayment arrangement.

The allowance benefit, as the name implies, provides a specific allowance for medications in each tier; the patient assumes responsibility for costs over and above the allowance amount. In essence, the benefit — developed in response to requests from employers seeking to contain pharmacy costs — operates in the opposite manner of the copayment model. The benefit is designed to create transparency for patients regarding pharmacy coverage and to engage them in understanding the true costs of medications.

In the traditional benefit model, the patient is responsible for the copayment, ranging from roughly $10 for tier 1 medications to $50 for tier 3 or 4 medications, while Humana pays the difference between Humana’s contracted rate and the patient’s copayment. In the pharmacy allowance model, Humana pays the specific allowance amount and the patient pays the difference between Humana’s contracted rate and the allowance amount. For example, if a patient was prescribed a tier 1 drug with a $10 copayment under the traditional model, in the allowance model, Humana would pay the $10 and the patient would pay the difference. The Humana Drug List and tiering structure do not change with the allowance benefit.

There are limits on the annual maximum out-ofpocket expenses Humana-insured patients can incur, as the benefit is designed so that patients who must take expensive brand-name drugs can calculate their total costs.

As more Humana members enroll in the pharmacy allowance benefit, physicians are likely to hear questions from their Humana patients regarding comparable drugs and generic medications, said Teresa Watson-Heidari, director of outcomes analysis in Humana’s pharmacy management department. “Their patients may be more interested in learning about generic alternatives because their allowance will go farther on generics than on branded products,” she said. “Because this has the potential for their patients to bear more of the cost for prescription drugs, their patients are likely to ask more questions than they once did.”

Physicians who would like to help their Humana-insured patients become better informed about prescription medications, associated costs and the range of alternative drugs within certain classes are encouraged to refer them to the pharmacy-specific member tools at www.humana.com.

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