Humana Benefit Plan: Pay Less for "Better" Drugs

July 8, 2003 (PLANSPONSOR.com) - US HMO Humana Inc.'s new drug benefit option allows employees to pay less for prescriptions that are more likely to prevent them getting sick or help them avoid further medical care.

Currently available only to Humana employees and dependents, the “RxAllowance” program is expected to be rolled out publicly as early as first quarter 2004, Humana spokeswoman Mary Sellers told Reuters Health. Some 15% of Humana employees and dependents selected the option for the health-plan year that began July 1.

According to a Reuters news report, Humana assigned each drug to one of four groups, using the latest available scientific evidence. The plan considers the value drugs provide in keeping people out of the hospital, preventing disease-related complications or reducing patients’ pain and suffering.

Under the plan for its employees, Humana pays participating pharmacies an allowance ranging from $5 to $30 per prescription, based on a drug’s grouping.

It’s a sharp departure from popular tiered benefit designs, which rank drugs by cost and base co-payments on those categories. “Those decisions were made artificially based on cost only, not the effectiveness of drugs,” Jonathan Lord, a doctor who is Humana’s senior vice president and chief clinical strategy and innovation officer, told Reuters.

The categories are:

  • Group A, which includes antibiotics for pneumonia patients and insulin for diabetics – drugs that provide a payback within a year
  • Group B, which includes pharmaceuticals such as cholesterol-busting drugs and heart medications that don’t yield an immediate payback but begin to save money in the second year
  • Group C, which includes drugs that may improve workplace productivity, including allergy medications and indigestion remedies.
  • “lifestyle drugs,” including acne treatments and smoking cessation products are relegated to Group D.

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