Raymond DePaola writes for Benefit News about how self-funding beats traditional coverage in lowering or containing prescription drug costs.
Read the full original article from Benefit News.
Self-funding employee healthcare is rising in popularity, coinciding with a precipitous rise in cost of prescription drugs. The increase in organizations that self-fund can be attributed to the fact that the savings potential is beginning to outweigh the financial and administrative barriers. And this savings potential extends to those rapidly rising drug prices: "When a company selects a self-funded plan, they have the option to include drug expenses in determining high claimant costs" - so surprise prescription costs won't drive up the overall cost of the plan the next year, like it would with a traditional fully-funded plan.
Specialty drugs can increase an employer's traditional, fully-funded plan's prescription claim costs by 30-40% in one year. Self-funding and partial self-funding can work this cost into the plan ahead of time and negate this increase. Learn more in The Nonprofit Executive's Guide to Partial Self-Insurance:
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