We live in an age where we can modify a person’s genes to treat or cure diseases – diseases like spinal muscular atrophy, which in its most severe form can be a death sentence for infants – and conditions like sickle cell disease which can dramatically affect a person’s quality of life.
Life-changing results at a steep cost
While gene therapies have the potential to offer transformative results, they are some of the most expensive drugs in the United States, often coming with million-dollar price tags. The gene therapy market as a whole is projected to cost $18.5 billion in the U.S. by the end of 2033. It is no surprise then that this has created an unprecedented challenge for plans and their members.
For many employer plan sponsors – specifically those who self-fund their employees’ health care – a gene therapy claim could have catastrophic effects. While self-funded health plans can offer greater control over plan design and increased visibility into health care spending, employers still need a way to proactively manage any potential high-cost expenses.
Employers must consider their gene therapy management goals and what they are willing to spend to accomplish them. Do they wish to retain as much control as possible over their gene therapy benefits? Do they want to ensure that any member requiring gene therapy is fully supported throughout their treatment journey -- without the burden of overwhelming costs?
Strengths and limitations of stop-loss insurance to mitigate high-cost gene therapy claims
One way that employers can protect themselves against unpredictable health care costs is by purchasing stop-loss insurance. This type of coverage is designed for employers who want to hedge against the risk of assuming 100% liability for losses that stem from high-cost claims. Often, employers will utilize stop-loss coverage in conjunction with their self-funded health plan to mitigate claims such as those for gene therapies. Stop-loss policies can be tailored to meet specific needs, but generally cover expenses that exceed a set dollar amount.
Costs for a stop-loss policy can vary based on the desired level of protection, and premiums may increase based on an employer’s claims or broader utilization trends. This lack of predictability can make it difficult to budget effectively.
Rethinking gene therapy management
The complexities of the gene therapy market, combined with limitations of stop-loss coverage, underscore the growing need for employers to think beyond traditional management.
This need additionally calls for a more holistic framework—one that not only addresses the financial implications of high-cost therapies on an employer’s budget, but also prioritizes member well-being. Features such as predictable pricing, integrated case and utilization management and portable program design reflect a deeper commitment to continuous innovation.
Embarc Benefit Protection® goes beyond stop-loss coverage to ensure that transformative treatments remain within reach for those who need them without affecting employers’ bottom lines.
