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A Health Insurer’s Latest Plan to Cut Drug Costs? Pay Patients to Visit Mexico

A red state in America’s heartland is sending its medical patients to Mexico for health care.

Thanks to a new “right to shop” law, the state of Utah will offer public employees it insures $500 per trip to travel to Mexico for cheaper prescription drugs. The plan operator, PEHP Health & Benefits, insures 170,000 employees and dependents. Its previous system had provisions for out-of-country care, but did not directly incentivize patients to seek it.

“It’s one thing to offer zero for people to look at lower cost options, including going to Mexico. With the cash back, rather than out of pocket, it actually puts money into your pocket,” PEHP director Chet Loftis told The Guardian.

The insurer wins on reimbursement costs. A 28-day supply of Avonex, a drug for multiple sclerosis, averages $6,700 in the U.S. and $2,200 in Mexico, according to the Salt Lake Tribune. Patients can buy up to 90 days’ worth of a drug in a single such visit.

The Utah program is limited to certain high-cost drug prescriptions but medical tourism across both U.S. borders is nothing new. Health care prices already vary inside the U.S. by almost a factor of four, according to a 2015 study. It can vary by a factor of ten across international borders, according to the Medical Tourism Association. Some insurers have offered cross-border plans for years.

Medical tourism is so widespread that insurance companies even offer specific products designed to cover incidents during medical tourism trips.