There are now effective pharmaceutical treatments for these conditions, but they are very expensive to produce and procure. Sofosbuvir (brand name: Solvadi), perhaps the most expensive drug on the market, is used to treat hepatitis C and has shown very high rates of success. A full regimen, however, costs $55,000 in Canada. It is the plan-wide effects of catastrophic costs like these that insurance providers hope to avoid by obtaining what is called “stop loss coverage.”
Stop loss coverage generally functions like an additional drug plan with a very high premium. For example, once a plan member hits a certain amount for drug costs in a primary plan, the remaining costs are absorbed by the stop loss plan. Having these expensive outliers covered by another plan can help keep premium increases under control and avoid the possible claw-back of benefits.
For this reason, it is important that bargaining teams pay attention to how employer plans treat catastrophic claims. Stop loss coverage can play a useful role in keeping premium costs down for plan members, but it is important we understand how it works and that we be vigilant for proposals that will either increase member costs or download risk to our members.
For health benefit plans without stop loss coverage, plan members may find themselves responsible for their own high drug costs. While options to mitigate this possibility do exist – such as Ontario’s Trillium Drug Program – these individual options are no replacement for full coverage by an employer-sponsored plan or a publicly funded national drug plan.
We have seen a number of cases in just the past year where employers have attempted to download the costs of prescription drugs onto our members. In one case, a drug cap was introduced unilaterally by a change in stop loss policy at the provider’s end. In another case, an employer tabled language that introduced a drug cap, and would have required members whose costs exceeded the cap to join the Trillium program. While the union ultimately prevailed in both these cases, we are certain to see more proposals like this as the downward pressure on benefit plans increases.