HI deductible nearly met already, and not paid by me!

[growerVon]

At my Megacorp, I'm fortunate to have a pretty good health insurance plan that qualifies as a high-deductible. For my two kids and I the deductible is $3750. DW has her own plan through Megacorp.

Due to Psoriatic Arthritis, I'm on a very expensive biologic that is now almost $3k/mo. The manufacturer has a "protection plan" where they cover up to $5 of the cost of a month's supply. Months past the first two, this benefit is up to $800/mo. For the first two months of the year, it is up to $6000! With my deductible being $3750 and on Friday having confirmation that all but $5 of my January biologic refill is covered, it means I'm $200 away from hitting cap on my deductible... and close to $3000 of it was provided by the biologic manufacturer!

So, it definitely sucks having this condition, but what an unexpected silver lining wrt the protection plan covering most of my deductible. Is anyone else benefiting from a similar arrangement?

[Texas Proud]

Are you sure that the full amount will go against your deductible

[growerVon]

Quote:

Originally Posted by Texas Proud Are you sure that the full amount will go against your deductible

It does, amazingly! When I started on these meds and got the protection plan (for free, i'll add) and started running the numbers, it struck me as a double-dip. A few calls to plan administrators confirmed this is legit. It has been working for the last ~15 months. How it works, upon refill request the Rx home delivery company puts in my charge, sends a payment request to the protection plan end point, the charge of 2975 shows up in my plan's Rx home delivery website, I get that recorded against my deductible, then a couple days later my charge is down to $5 as the protection plan's payment comes in, and I continue to have the 2975 credit against my deductible. My plan admin explained that the arrangement between the manufacturer and I is separate from my arrangement with the insurance company. It seems the Rx home delivery company performs a convenience service by making the protection plan bill request on my behalf.

[robertf57]

Quote:

Originally Posted by growerVon It does, amazingly! When I started on these meds and got the protection plan (for free, i'll add) and started running the numbers, it struck me as a double-dip. A few calls to plan administrators confirmed this is legit. It has been working for the last ~15 months. How it works, upon refill request the Rx home delivery company puts in my charge, sends a payment request to the protection plan end point, the charge of 2975 shows up in my plan's Rx home delivery website, I get that recorded against my deductible, then a couple days later my charge is down to $5 as the protection plan's payment comes in, and I continue to have the 2975 credit against my deductible. My plan admin explained that the arrangement between the manufacturer and I is separate from my arrangement with the insurance company. It seems the Rx home delivery company performs a convenience service by making the protection plan bill request on my behalf.

I wouldn't broadcast this around too much......Certainly seems improper on the face of it. I wouldn't be surprised if you got a 1099 for the excess paid by the protection plan and need to pay income tax!

[bingybear]

Quote:

Originally Posted by growerVon It does, amazingly! When I started on these meds and got the protection plan (for free, i'll add) and started running the numbers, it struck me as a double-dip. A few calls to plan administrators confirmed this is legit. It has been working for the last ~15 months. How it works, upon refill request the Rx home delivery company puts in my charge, sends a payment request to the protection plan end point, the charge of 2975 shows up in my plan's Rx home delivery website, I get that recorded against my deductible, then a couple days later my charge is down to $5 as the protection plan's payment comes in, and I continue to have the 2975 credit against my deductible. My plan admin explained that the arrangement between the manufacturer and I is separate from my arrangement with the insurance company. It seems the Rx home delivery company performs a convenience service by making the protection plan bill request on my behalf.

does your insurance company see it as legit? you have a contract with them for insurance. I would bet that you are in default of your contract if you are not reporting this other payment per their contract. Call them and ask

you may be risking insurance fraud... but I don't know for sure

[pb4uski]

I don't think there is a big risk of insurance fraud.

What the OP describes is similar to having a hospital bill of $1,000 at the "rack" rate and the negotiated rate is $600 and calling the hospital and asking for an additional discount for prompt payment and they concede 20%. You only pay the hospital $480 but your deductible gets $600. Many of us have done this for years.

Except the OPs situation is on steroids. The drug manufacturer has effectively rebated $ to the consumer. Plus it seems like the OP has checked with the insurer and they have confirmed that the deductible is working right.

[bingybear]

pb4uski --same thing... have you validated with the insurance company that this is valid by asking the insurance company if your deductible should have been hit with 600 or 480?
I used one of the drug companies discounts that was taken off before insurance filing... and hit my deductible with only the $5. I'll be more of a believer when someone gets the OK from the insurance company.

either that or read the long form of your insurance contract.

[MichaelB]

Quote:

Originally Posted by growerVon How it works, upon refill request the Rx home delivery company puts in my charge, sends a payment request to the protection plan end point, the charge of 2975 shows up in my plan's Rx home delivery website, I get that recorded against my deductible, then a couple days later my charge is down to $5 as the protection plan's payment comes in, and I continue to have the 2975 credit against my deductible. My plan admin explained that the arrangement between the manufacturer and I is separate from my arrangement with the insurance company. It seems the Rx home delivery company performs a convenience service by making the protection plan bill request on my behalf.

How does the IRS see this? It has a strong resemblance to taxable income.

[pb4uski]

Quote:

Originally Posted by bingybear pb4uski --same thing... have you validated with the insurance company that this is valid by asking the insurance company if your deductible should have been hit with 600 or 480? I used one of the drug companies discounts that was taken off before insurance filing... and hit my deductible with only the $5. I'll be more of a believer when someone gets the OK from the insurance company. either that or read the long form of your insurance contract.

I'll turn it around - can you demonstrate or point to a citation that the deductible should only be hit with $480? The form I get from my insurer says it should be $600 and it is well known that individual providers provide additional discounts for prompt payment. If it should be $600 then the insurers would be chasing people for the info on what they actually paid and I have never heard of them doing that.

[pb4uski]

Quote:

Originally Posted by MichaelB How does the IRS see this? It has a strong resemblance to taxable income.

I'm not convinced. Is a rebate income? Is a discount income? Is a gift income?

If it was income then the OP should be able to use the gross amount in calculating their medical expenses for the medical expense deduction.

[MichaelB]

Quote:

Originally Posted by pb4uski I'm not convinced. Is a rebate income? Is a discount income? Is a gift income? If it was income then the OP should be able to use the gross amount in calculating their medical expenses for the medical expense deduction.

It depends on how the payer defines and accounts for it. It is only a rebate if part of the purchase price is being returned, which is not the case here. If it is a real charge for the insurer, there must a corresponding transaction between the manufacturer and the user. If there is no real underlying transfer or transaction, the insurer might conclude the charge to the deductible account is not legit.

We may not know all the details here.

[pb4uski]

I agree that it is unclear but the OP indicated that he was suspicious and asked about it and the plan administrator said it was legit so I would be inclined to rely on that in the absence of any other conflicting information. From what the OP describes in post #3, it sounds like a manufacturer's rebate except the Rx provider acts as the OPs agent and only bills the OP for the net amount.

[robertf57]

Although this deals with Medicare, the Office of Inspector General Special Fraud Alerts talks about the waiving of deductibles in the Medicare program as fraud.

For what it is worth (which is nothing), claiming to have paid $2975 (which is what you do when you get credit toward your annual deductible) when you have only paid $5 is fraud.

[MichaelB]

Quote:

Originally Posted by pb4uski I agree that it is unclear but the OP indicated that he was suspicious and asked about it and the plan administrator said it was legit so I would be inclined to rely on that in the absence of any other conflicting information. From what the OP describes in post #3, it sounds like a manufacturer's rebate except the Rx provider acts as the OPs agent and only bills the OP for the net amount.

We do not know all the details. One viewpoint conspicuously absent is that of the insurer.

[Texas Proud]

I am about to get the same benefit but with much less coming back to me...

Here is what I think it happening.... you get a prescription that cost a lot of money... but the manufacturer is setting a limit on the amount that the patient has to pay... (my example is $300 per month cost and $10 to me... it it works out that is)..... when you go and put the prescription in, the full price comes up...

Now, here is where I am guessing.... the pharmacy sends in an expense reimbursement to the insurance company with the full price.... the insurance company pays their share and then allocates the rest to the patient.... the pharmacy then send the manufacturer a bill for the difference except for the $5 (or $10 for me)..... the pharmacy gets paid by three different entities... the insurance company might or might not know about the big reimbursement from the drug company...


This is not the same thing as negotiating a cheaper bill from a doc or facility....

[pb4uski]

Quote:

Originally Posted by robertf57 Although this deals with Medicare, the Office of Inspector General Special Fraud Alerts talks about the waiving of deductibles in the Medicare program as fraud. For what it is worth (which is nothing), claiming to have paid $2975 (which is what you do when you get credit toward your annual deductible) when you have only paid $5 is fraud.

Given what we don't know you seem pretty definitive in that second paragraph... and likely dead wrong.

The OP has never "claimed" to have paid $2,975.... he ordered the prescription through the health plan approved pharmacy and that is simply what appeared on his EOB. He asked the plan administrator for his employer provided plan and they said no problem.

[growerVon]

Hi folks, thanks for the leaning on the "doesn't sound legit" angle, because it is the same concern I've had while being pleased about the net result.

I called up my insurance company again, today - Premera. I didn't get to a supervisor, but did make sure the agent knew I was concerned about the legitimacy of this rebate on the specialty medicine and how it was covering the majority of my deductible for me. They routed me to the special pharmacy, Accredo.

I had a very frank conversation with the Accredo agent, laid out my concerns and wondering whether there was any tax implication out of this, and they confirmed this was legit and had no tax burden on me.

The Accredo agent did clarify this was a co-pay assist program for the specialty medicine. The fact that my plan doesn't have a co-pay but instead has a deductible (followed by co-insurance) doesn't matter, according to the agent; they are all considered payment assistance.

I asked Why do these drug manufacturers do this? I just read how AbbVie (maker of this biologic, Humira) reported record profits, largely due to Humira. Why are they giving it away for free? Where is are the record profits coming from? Answer: the insurance companies, for the 10-11 months of the rest of the year at full price. The co-pay assist is for me, an individual in a commercial health plan, and the insurance company does not receive such a benefit. So it sounds like to get the patient to bite the ~$3000/mo hook, they lower the individual's out of pocket and count on the continuation of the prescription covered by the insurance plan as their main money maker.

I should mention that the myHumira website also points that the folks on a government health plan do not quality for the payment assistance.

It feels like I've done due diligence, but to be fully certain I can see me going back to Premera directly, asking for a supervisor, and having the frank conversation with them (and not getting routed b/c this relates to home delivery of a specialty medicine). I'll do that and follow-up.

Given this, does this info help? What additional concerns do you have?

[growerVon]

Just got off the phone with Premera. While I didn't get a supervisor, the agent I spoke with did validate this is a legit scenario. Agent cited a similar example of a discounted provider rate like pb4uski pointed out. I ruminated about the "predatory" aspect of this - hooking patients on a medicine they perhaps normally wouldn't be able to afford, then their insurance provider getting stuck with the full cost - and how I could see a law changing wrt this in the future...

The agent said, "Well, you should take advantage of this while it is available to you!"

[bingybear]

Quote:

Originally Posted by growerVon I should mention that the myHumira website also points that the folks on a government health plan do not quality for the payment assistance.

by government health plan do you mean ACA plan? or one for government employees?

It would really bite if those getting individual plans are omitted from such benefits.

[growerVon]

Quote:

Originally Posted by bingybear by government health plan do you mean ACA plan? or one for government employees? It would really bite if those getting individual plans are omitted from such benefits.

Looks like a wide range of government plans, but not necessarily ACA plans. From their documentation:

Quote:

Eligibility: Available to patients with commercial prescription insurance coverage for HUMIRA. Co-pay assistance program is not available to patients receiving prescription reimbursement under any federal, state or government-funded insurance programs (for example, Medicare, Medicaid, TRICARE, Department of Defense or Veteran’s Affairs programs) or where prohibited by law. Offer subject to change or discontinuance without notice. Restrictions, including monthly maximums, may apply. This is not health insurance.

Emphasis is theirs.