New Humana drug benefit consumer-driven

The plan wants doctors and patients to talk about the potential savings of drug alternatives.

By Robert Kazel, AMNews staff. Aug. 4, 2003.

Humana's new prescription insurance program is designed to compel patients to become aware of drug costs, and it counts on doctors to be open to discussing the relative costs of various medicines.

Louisville, Ky.-based Humana says its new drug plan alternative, named RxAllowance, will help employers who are struggling with providing drug coverage by motivating patients to decide carefully which drugs they want -- with cost a much greater consideration than before. Humana Inc. introduced the plan to its own employees this summer and plans to offer it nationally in 2004.

RxAllowance offers virtually unlimited choice of medications but aims to constrain patient selection of drugs by making plan members sensitive to the impact on their wallets.

Under the new drug plan option, Humana reimburses patients for each prescription with a pre-designated flat-fee payment, and the patient will be responsible for paying for the balance of the pharmacy bill. For example, an employer plan might pay $30 for all antibiotics. If the prescriptions cost $120, the patient would be required to pay a balance of $90. But if it cost just $30, the drug would be free. No co-pays are involved. Neither are formularies: Any drug approved by the FDA will be available to the patient if prescribed.

Replacing co-pays with allowances could become very costly for patients who are on several expensive medications, although depending on how the employer sets up its coverage structure, the cost burden is likely to be mitigated by a per-prescription cap. For example, Humana employees who already are signed up for the RxAllowance option generally don't need to pay more than $200 toward any one prescription.