When a health plan partners with an alternative funding program, the health plan defines all specialty medications as a non-essential health benefits (non-EHB). By defining specialty medications as a non-EHB, health plans inform enrollees that they must either enroll with the alternative funding program or be responsible for 100 percent of the cost of the medication. Because this medication is defined as a non-EHB, any cost paid for the medication by or on behalf of the enrollee will not count towards their deductible or annual limit on cost-sharing. Given this coercive program design, plan enrollees are essentially required to enroll with the alternative funding program.
Once enrolled with the alternative funding program, the health plan automatically denies coverage for the enrollee’s prescription medication. The alternative funding program then steps in and obtains the enrollee’s personal information such as household size and annual income to determine the type of third-party financial assistance the plan enrollee may be eligible for. Unlike typical non-EHB programs, which primarily enroll plan enrollees in manufacturer copay assistance programs, alternative funding programs determine whether enrollees are eligible for manufacturer copay assistance programs, charitable assistance programs, and international importation programs.
If an individual is eligible for a manufacturer copay assistance program, the health plan will inflate the cost of the prescription drug to the maximum amount of manufacturer copay assistance available for the year. If the enrollee is eligible for a different program such as international importation, then enrollee will receive their medication through that source. However, if the enrollee is not eligible for any part of the alternative funding program, then the prescription will be sent back to the health plan for coverage and the medication will be covered like a regular pharmacy benefit.
