ISU faculty may soon be paying more for their health insurance benefits.

The University Benefits Committee has recommended an increase in the cost of the co-pay for prescription drugs, in addition to the normal changes that occur on a yearly basis. Currently, the ISU medical plan costs $31 million in covered health care goods and services annually.

Harvey Lapan, representative on the University Benefits Committee and professor of economics, said the change is due to the increased cost of pharmaceuticals in recent years.

“In the past you never saw ads for prescription drugs on TV. Now when you turn on the TV they are every other ad it seems,” Lapan said.

Iowa State has a self-insured medical program, which makes Iowa State responsible for any unanticipated medical expenses that occur during a given plan year. Iowa State contracts with Health Alliance and Wellmark to provide a network of physicians, hospitals and pharmacies for faculty.

A $3 increase is proposed for the prescription drug co-pay, which would increase the co-pay from $7 to $10 for generic drugs. The increase for preferred brand drugs will increase from $15 to 30 percent of the cost of the drug and non-preferred brands will be a change from a $30 co-pay to 50 percent of the cost of the drug.

Once a faculty member has paid $1,500 for pharmaceuticals in a one year period, the rest of the costs will be covered fully by the insurance.

“The change in co-pay will have its biggest effect on people who are on a constant medication,” Lapan said.

Switching from an exact dollar amount to a percent is a way to contain costs and could cause an increase or a decrease in the amount faculty are currently paying, depending on the cost of the drug, he said.

The change could have a significant impact on the amount paid out of pocket for prescriptions per year, depending on the cost of the prescriptions, said Mark Power, member of the University Benefits Committee and professor in finance. “The goal of this new change is trying to encourage more responsible usage of prescription drugs.”

The cost of prescription drugs will not be the only change in the proposed plan. There will also be an increase in the co-pay for emergency room visits. The cost will go from $35 to $100.

“We are trying to get people to go to the clinic during the day to get checked out if they are ill, instead of waiting until nighttime when the clinics are closed and having to go to the emergency room,” Power said.

According to a letter written by Lapan to the College of Liberal Arts and Sciences faculty, the reason for the emergency room co-pay increase is because Iowa State has a lower co-pay than its peers and because there is more use of the emergency room than what is typical.

If a person is admitted to the hospital after visiting the emergency room, the $100 co-pay is waived.

The structure of Iowa State’s medical options for faculty is divided into three different plans. The two plans used by most faculty are the Health Maintenance Organization Plan (HMO), which is a family driven plan with no co-pays, and the Preferred Provider Organization Plan (PPO) which gives the insured more choice in doctors. The third option, the Idemnity Plan, is very similar to the PPO plan, but only has about 800 faculty members, 400 of whom are retirees.

In the new plan, the number of HMO and PPO plans will increase by 10.5 percent, while the Indemnity plan will increase by 14 percent.

The changes will make it simpler for faculty to have an account that removes money from their paychecks to pay medical costs, with a maximum of $5,000 allowed. The advantage to the account, called a flexible spending account, is that the money set aside for medical costs is tax free.

In addition, a recent ruling by the Internal Revenue Service allows for reimbursement of over-the-counter medications under the flexible spending account, if used to treat a specific medical condition.

Diane Muncrief, manager of Human Resource Services, said the goal is to get faculty who are in the Indemnity Plan to make the switch to the PPO plan because the PPO plan offers the same coverage and in many cases would be cheaper.

“The problem is that people just don’t want to change a plan that they have had for a long time,” Muncrief said. The proposal will go into effect Feb. 1, 2004.