The PAN Foundation today announced opposition to alternative funding programs, which jeopardize patient access to specialty medications and redirect finite charitable funds away from uninsured and underinsured patients.
We urge Congress and the administration to learn about the growing use of alternative funding programs, understand their detrimental impact on patients, and evaluate options to discontinue their use. We must work together to ensure that all patients can access and afford their prescribed medications, specialty or otherwise.
Health plan sponsors, like employers that fund their own health coverage, may use alternative funding programs to save money by excluding some or all specialty medications from coverage, deeming them a non-essential health benefit. Since the health plan does not cover these specialty medications, a patient’s out-of-pocket spending will not count toward their annual deductible. Patients are then directed to alternative funding programs—also known as specialty drug carve out programs— operated by vendors that are separate from their health plan and are not health insurance.
These vendors work to connect patients with financial assistance through a drug manufacturer or charitable assistance program, disguising patients as uninsured, if necessary. Technically, these patients have no coverage for these medications. Vendors may even direct patients to illegally import medications internationally. But help paying for these medications is not guaranteed from any of these sources.
“An employer that funds their own health coverage may send employees to alternative funding programs to save money, but it’s simply passing on the problem,” said PAN President and CEO Kevin L. Hagan. “These programs send patients who need specialty medications in search of funding, which can delay much-needed treatment that should have been covered by the health plan from the start. And when they do secure funding, it often means one less underinsured or uninsured patient will get the support they need.”
PAN is concerned about the growing use of these programs and their legality. They put additional strain on an already limited safety net. For patients whose employers use alternative funding programs, the options are limited. If they can’t find assistance for their medications through a vendor, they must either face high out-of-pocket costs or forgo their treatment.
Prescription drugs are an essential benefit per the Affordable Care Act. This includes specialty medications prescribed by healthcare providers, and their costs should be covered by health plans. Patient assistance programs should be reserved for qualifying patients, based on need.
PAN will continue to monitor the growing use of alternative funding programs and we urge Congress to do the same.
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