A new wave of middlemen offers ‘alternative funding’ for specialty drugs. Patients bear the risks.

Valerie Hughes’ commentary was featured in an article appearing in Fierce Healthcare about employee benefits and prescription drug coverage.

Valerie specifically explained stop loss insurance, a risk management mechanism for employers who self-fund their employees’ health benefits, and how this figures into employer decisions about prescription drug coverage.

The vast majority of smaller self-funded plans purchase stop loss to limit their risk. In typical arrangements, the employer agrees to cover claims up to a certain amount, above which stop loss kicks in. Covering expensive drugs can quickly push that threshold.

“Thus, stop loss insurers may look for ways to carve out coverage for very high pharmacy benefit claims from their policies,” Valerie noted.

“Employers should carefully review their stop loss policies and ensure that they understand the policy coverage terms and limits,” Valerie explained “We have, for example, seen stop loss policies that provide a maximum level of coverage. These policies would leave the employer responsible for costs above the maximum.”