Report: Employers Unaware of Ethical, Safety Implications of Health Insurance 'Alternative Funding Programs'

Survey of human resource professionals finds most respondents lack understanding of the misuse of charitable programs and risks of requiring employees to obtain foreign drugs

WASHINGTON, DC / ACCESSWIRE / April 22, 2024 / A new survey of human resource professionals found that the cost of offering affordable health insurance to employees is a large concern for employers. Yet these professionals may be unaware of the ethical and safety implications of requiring health insurance participants to participate in "alternative funding programs" (AFPs) to access their medications.

HR.com's HR Research Institute partnered with Aimed Alliance and the Alliance for Patient Access (AfPA) to examine how employers perceive and utilize AFPs with the overarching goal of addressing misconceptions and inaccuracies surrounding these programs. The report of the survey's findings, Managing Prescription Drug Costs 2023-24, is available for download.

Almost nine out of 10 respondents (88%) said that the cost of offering affordable health insurance to employees is a large concern for their employer. In an effort to lower health insurance costs, some employer health plans have turned to third-party AFPs. When working with an AFP, the health plan "carves out" coverage of certain medications, requiring plan participants to obtain those medications through the AFP. The AFP procures participants' medications through "alternative sources," such as charitable assistance programs and foreign drug suppliers.

Although contracting with an AFP might appear to be a cost-effective way of managing drug costs for the employer, there are ethical and safety concerns associated with sourcing medications through alternative sources. However, employer respondents may need greater education on these challenges.

Over half (53%) of respondents agreed that enrolling employees in charitable medication assistance programs is an effective way to reduce employers' prescription drug costs. Charitable medication assistance programs are intended to benefit people who have no health insurance or only minimal coverage. When charitable programs' resources are depleted, uninsured or underinsured individuals who rely on these programs have no other means of accessing their medications.

Similarly, four out of five survey respondents (82%) agreed that getting prescription drugs from foreign countries is a safe and ethical means for reducing drug spending for employers. According to the U.S. Food and Drug Administration (FDA), "medicines from outside the legitimate U.S. drug supply chain do not have the same assurance of safety, effectiveness and quality as drugs subject to FDA oversight." For these reasons, the FDA recommends only obtaining medicines from legal sources in the U.S.

Respondents' lack of understanding of the ethical and safety implications of requiring health plan participants to obtain medications through AFPs may be due to a lack of knowledge. Almost nine out of 10 respondents (88%) say that their internal compliance team had not raised concerns about using AFPs. Less than half of respondents (46%) said they had heard of AFPs. Over two-thirds (67%) of respondents said that they had not used an AFP and were not considering doing so.

"The rise in use of alternative funding programs is worrisome for insured employees, who rely on their insurance in order to access the medications they need," said Josie Cooper, Executive Director of the Alliance for Patient Access. "We urge employers to consider the implications of these types of programs on employee health and safety prior to implementing an AFP."

More takeaways from the survey and recommendations for managing employer health insurance costs without resorting to the use of AFPs are available in the full report.

About Aimed Alliance

Established in 2013 and based in Washington, DC, Aimed Alliance is an independent, not-for-profit health policy organization that works to protect and enhance the rights of health care consumers and providers. For more information on Aimed Alliance and its initiatives, go to aimedalliance.org and follow @aimedalliance on X, Instagram, and Facebook.

About Alliance for Patient Access (AfPA)

The Alliance for Patient Access is a national network of policy-minded health care providers who advocate for patient-centered care and participate in clinician working groups, advocacy initiatives, stakeholder coalitions and the creation of educational materials. 

About HR.com and the HR Research Institute

HR.com's HR Research Institute helps HR departments keep their finger on the pulse of HR. HR.com is committed to creating inspired and informed workforces by maximizing the potential of HR professionals around the world. Over 1.88 million HR professionals rely on HR.com as the foremost, trusted industry resource for education, career development, and compliance.

Media Contact:

Ashira Vantrees, Esq.
policy@aimedalliance.org

SOURCE: Aimed Alliance