Sting of flu vaccine hits us all -- in the pocket

Flu season is upon us, and you or a loved one might be rolling up your sleeves to get the annual vaccination against the influenza virus.

Here's my question for you: How are you paying for it?

If you have health insurance coverage through your employer, you might think you're doing the right thing if you go to your doctor's office for the shot. But are you?

Why the cost difference?
I know because I took my daughter in to the pediatrician last month for her annual flu shot. I paid $25 for the office visit. But the total cost of the shot shown on the explanation of benefits (EOB) form from my HMO was $44.58. In 2009, it was $45.59 for the same shot. When I got the EOB in 2009, I remember thinking, "Wow, why does it cost so much compared to the pharmacies?" My employer picked up the difference between my $25 co-pay and the total amount covered. The cost of billing and collecting my co-pay has to be factored in as well.

And at the doctor's office, there's a nurse administering the shot -- not an M.D. Why the difference?

I e-mailed my HMO last year to ask why they didn't completely cover the flu vaccine and eliminate the office co-pay charge. I got a non-response, but they politely thanked me for my inquiry.

It was at the height of the H1N1 (aka swine flu) outbreaks. School activities were being canceled and some schools closed because of concerns about students contracting the virus. Parents were urged to have their children vaccinated, and anyone in high-risk groups (pregnant women, the elderly or anyone with compromised immune systems) was urged to take the shot. I never recall anyone saying: "Get the shot at a pharmacy because the overall cost is cheaper." Yet, shouldn't that be part of the public service announcement to reduce health care costs? I think it should.

If getting the flu shot decreases the likelihood of flu outbreaks in the office this winter, why isn't that preventive measure completely covered by all insurance plans? Would the cost of hospitalization and treatment of an influenza patient be far greater than the cost of vaccines for everyone?

More employers are passing the cost of health care on to workers. Keeping health care costs down for the employer may help keep costs down for employees as well.

New flu card recognizes lower-cost pharmacies
I was both surprised and encouraged to hear about Citi's new Flu Care card. It's a new type of payment card that debuted Oct. 1, 2010. Employers can give a Flu Care card to workers, who can take it to participating pharmacies to get the flu vaccine. Employees pay nothing for the shot and they don't have to file a claim through their health insurance. The Flu Care card looks like a regular debit or credit card. There is no cash loaded on the card, so it's not a prepaid card.

Here's how it works:

• Employers give workers the card to take to a participating pharmacy.
  

• An employee presents the card when he or she goes to the pharmacy for the shot.

• When the pharmacy clerk swipes the card, it reads the information about the employer and Citi authorizes payment for the amount negotiated with the pharmacy.

• The pharmacy keeps the card, which can be used only once.
  

If an employee decides not to use the card, it expires after a certain period, such as at the end of the flu season. Current cards, for example, expire Feb. 1, 2011. The cards can only be used for flu shots, so you can't buy over-the-counter medicines or groceries with them.

According to Andy Radlow, Citi's vice president of health management, the old cards are "destroyed in a secure and environmentally friendly way."

"There is no paperwork from an insurance perspective. That's another hidden cost in terms of time and effort," says Nina Das, a Citi spokeswoman.

Companies can distribute the cards to all workers or only to a targeted group of employees -- such as "those with pre-existing lung conditions and are over a certain age or any other number of risk factors," Radlow says. "You can target the higher risk populations. You certainly want to do everything you can to reduce the risk and reduce your health care costs."

He says companies like the "just-in-time" payment feature of the card. If employers were to issue debit cards for flu shots, they would have to set aside funds to cover the cost -- regardless of whether employees use the cards. "You have to lock up all sorts of funds on the [debit] cards," Radlow says. Citi bills the company for the cost of the shot once the card is used.

Citi claims using the card at retail pharmacies can reduce overall company costs for flu vaccines by 63 percent. A shot that could cost the employer $80 if given at a doctor's office would cost only about $30 at a local pharmacy.

So far, Citi has contracted with several of the major pharmacy chains: CVS, Target, RiteAid, MinuteClinic, The Little Clinic and Kroger. Those pharmacies have 17,000 retail locations nationwide. Radlow says Citi is negotiating with other retail pharmacy chains to accept the card. Employers participating in the program include "Fortune 100 companies," Radlow says. He declines to name the participants, however, because the companies have not authorized him to do so.

A different approach next year
Now, I know that getting the flu shot does not guarantee you won't contract the flu. The virus mutates so rapidly and the vaccine takes so long to produce that the shot often doesn't protect you from the current strain of flu that's circulating. That was the case with H1N1 last year. That's the primary reason I don't get the flu shot. Since my daughter is in a high risk group and at school eight hours a day with other children, she gets the shot every year. Next year, however, I'm going to take her to a pharmacy for the shot -- and save us all a little money.

Do you have one of these new Flu Care cards? If so, let us know how it is working for you.

Blog carnival
This blog was selected for the 283rd edition of the Carnival of Personal Finance hosted by SimplyForties.

See related: Medical credit cards: Watch for these warning signs, Health care law brings expensive changes to FSA, HSA use, 15 tips for paying high medical bills