Monday, August 18, 2014

Insurer bias - or why insure (expensive) sick people?

One of the big issues with healthcare reform was so that sick people could be insured instead of being left hanging at the mercy of their insurance company. The act did eliminate pre-existing conditions from precluding someone from health insurance. But the jury is still out as to the bias issue.

Several groups are claiming that bias is creeping back into the insurance system. First patients try to figure out which plan is best for them. But the information on what drugs are covered and what are the co-pays for them are not on the top of the list of information.

For healthy people, this would not matter usually. But for us non-healthy people with potentially expensive medications, this does matter. I have one drug that my copay is $105/month. I consider that expensive. But its not. Some co-pays are in the thousands. If a drug is $80,000 or $100,000/year or more and the co-pay is 35% of the retail price, you can do the math.

I can see the issue insurance companies are facing. Sick people are expensive to take care of. Their medications can be very expensive. They require many doctor visits, and maybe surgeries, procedures, and hospital stays. Hospitals can negotiate with insurance companies to get discounted rates. But they don't seem to get anywhere with pharmaceutical companies in terms of negotiating prices.

Pharma companies claim that drugs take so long to develop and one in several hundred or thousands actually make it to market which is why that charge such prices. Then there are the whole positioning factors which come into list prices (this is true for everything from a candy bar to a car) as to what image they project. Expensive means it must be better. That is a whole other discussion that I have blogged about before and am sure I will again.

Back to the insurance companies. They put all these people into a pool and the premiums paid cover all the sick and healthy people. But the really sick, screw it up and can cost them lots of money. So insurance companies look for ways to cut costs and big ticket items, like expensive prescriptions, are on the top of the list.

And they hide the co-pays and things like that because its only in the details. And they say things like generics are this much, and branded drugs in this category are this, and the next category, and the next category, etc. And its not simple and easy to figure out.

To figure out what you would pay if you are sick, you can't just compare premiums, co-pays and expected number of visits from each company and get a number you think is the lowest. You need to call them and get them to tell you the costs of all your branded prescription drugs, plus you add in the number of expected doctor appointments, their co-pays, out of pocket maximums, and all those fun things. Then you get to decide. But its a lot of work.

Each year  you need to review where your drugs are in each little category and their new co-pays. And what if you need a new drug mid-year and it comes with a whopping high cost?

I don't think I blame the insurance companies but I think the data needs to be a bit more available for all of us sickies.

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