BOLO: Alternative Funding Programs coming to your health plan

What is an alternative funding program? More importantly, what does it mean for patient care?

Alternative funding programs are cost containment schemes that are being marketed to employers that offer health plans to employees. Employer plans cover more than half of the United States population and alternative funding programs are becoming increasingly common for these patients. A recent analysis of employer-sponsored plans found that 14% of employers and 7% of health plans use alternative funding models, and the number of employers using them recently doubled in just one year.

Alternative funding programs weaken or outright cut patient benefits in order to try and lower costs to the employer. For example, they can take the form of an employer’s health plan completely excluding coverage of certain FDA-approved drugs that are designated as orphan drugs. Denying coverage of these drugs, even though they are determined to be medically necessary and considered a validated standard of care, often leaves the patient with literally no treatment options. A 2023 study suggests that alternate funding programs that prohibit access to orphan drugs may actually increase healthcare costs; when medically necessary care is delayed, it allows a patient’s diseases to progress. Alternate funding programs harm patients and the bottom line of employers that embrace them.

Health outcomes for patients are better when they can access the medication, procedures and care recommended by their physician. Disregarding the plan of care a physician crafts for a patient is not in the best interest of patient care, medical outcomes, efficiency, or cost. Patients and Providers United prioritizes keeping patients, providers, and caregivers at the center of medical decision making.