FacebookTwitterGoogle+RedditEmail

A Funny Thing Happened on the Way to the Pharmacy

Health insurance companies are constantly looking for new ways to make money. Two of the major impediments to their quest are sick people and the drugs they need.   Clever, as a good corporation should be, they have figured out how to overcome the second of these obstacles. Two techniques are employed.  The first is practicing medicine just the way doctors do even though few, if any, insurance companies have attended medical school.

When a doctor prescribes a specific drug for a patient (whom it has never met) the insurance company may decide that the generic equivalent of that drug is just as good for the patient as the one that the physician prescribed and refuse to pay for the physician prescribed drug. In that event, if the patient wants to use the prescribed drug the patient must pay for the drug out of his or her own pocket.

There is, however, a built in appeals process that patient and doctor can go through if they would like to prove that the trained doctor’s decision is more medically accurate than the corporation’s but it is a somewhat cumbersome process. Why the company insists on substituting its judgment for the doctor’s judgment is best known to the insurance company. As creative as this is on the part of the insurance company, it is not the most dramatic example of saving money through creative insuring.

A recent report in The New York Times discloses that some insurance companies have realized increased profits by reducing the amount of money they are willing to pay for certain prescription drugs taken by their insureds.  It seems like such an obvious thing to do that the only remarkable thing is that the insurance companies have not thought of it before now.

Before the companies became creative in reimbursing for drug costs, the insured was required to pay a fixed amout (known as a co-pay) for a prescribed drug that that went anywhere from approximately $5.00 to $50 the amount of the co-pay being determined by the company and on whether the drug was a Tier 1, 2 or 3 drug.  The insurance company paid the difference between the drug’s co-pay and its actual cost to the insurance company.   Then, a funny thing happened on the way to the pharmacy.  The insurance companies invented Tier 4 into which they placed REALLY expensive drugs.

People taking Tier 4 are the beneficiaries of the new policy.  Here is how three randomly selected insurers have made themselves its beneficiaries.

The American Association of Retired Persons (AARP) requires patients taking Tier 4 drugs to pay 30 percent of the cost of the drugs with no limit on how much the insured ultimately has to pay.  The drug Sprycel is a tier 4 drug that blocks the growth of cancer cells and eliminates the need for chemical infusions.  It costs $13,500 for a 90-day supply.   AARP requires the insured to pay $4,500 for each 90-day prescription and AARP pays the balance. First Health Life & Health also charges a flat 30 per cent  for Tier 4 drugs without any limit on what the insured pays.

Kaiser Permanente, by contrast, tempers profitability with mercy.  It requires its insureds to pay only 25 percent of the cost of Tier 4 drugs and places a $325 limit on how much the insured has to pay for each prescription.

Increasing the insurance companies’ profitability is not the only benefit from the new program.  For Medicare beneficiaries who have to pay 5 percent of their drug costs after they’re through what’s known as the doughnut hole, the increased amount they are forced to spend gets them through the doughnut hole more quickly.  (Not all Medicare beneficiaries will see the benefit in that.)  Another benefit that will, however, be obvious to its beneficiary is the cost savings that inures to the benefit of employers who furnish health insurance to employees.

Karen Ignagni is president of America’s Health Insurance Plans, an organization that represents most of the health insurance industry.  She pointed out in the New York Times story that lower outlay for prescription drugs means the insurance companies can charge employers lower premiums, thus providing a cost benefit to employers.  Adding those benefits to those enjoyed by the insurers makes it obvious that the new policy is a win-win except, of course, for those who can no longer afford to take drugs.

In George Bush’s United States 47 million people have no health insurance.   In George Bush’s United States 9 million children have no health insurance.  Thanks to the creation of Tier 4, we will soon have a new class of citizen.  It will comprise people who have insurance but are unable to pay for the drugs needed to keep them in or restore them to, good health.  In a few years we will know how many people are members of their class.  They will join the uninsureds as statistics.

CHRISTOPHER BRAUCHLI is a lawyer living in Boulder, Colorado. He can be reached at: brauchli1@comcast.net

More articles by:

Weekend Edition
January 18, 2019
Friday - Sunday
Melvin Goodman
Star Wars Revisited: One More Nightmare From Trump
John Davis
“Weather Terrorism:” a National Emergency
Jeffrey St. Clair
Roaming Charges: Sometimes an Establishment Hack is Just What You Need
Joshua Frank
Montana Public Schools Block Pro-LGBTQ Websites
Louisa Willcox
Sky Bears, Earth Bears: Finding and Losing True North
Robert Fisk
Bernie Sanders, Israel and the Middle East
Robert Fantina
Pompeo, the U.S. and Iran
David Rosen
The Biden Band-Aid: Will Democrats Contain the Insurgency?
Nick Pemberton
Human Trafficking Should Be Illegal
Steve Early - Suzanne Gordon
Did Donald Get The Memo? Trump’s VA Secretary Denounces ‘Veteran as Victim’ Stereotyping
Andrew Levine
The Tulsi Gabbard Factor
John W. Whitehead
The Danger Within: Border Patrol is Turning America into a Constitution-Free Zone
Dana E. Abizaid
Kafka’s Grave: a Pilgrimage in Prague
Rebecca Lee
Punishment Through Humiliation: Justice For Sexual Assault Survivors
Dahr Jamail
A Planet in Crisis: The Heat’s On Us
John Feffer
Trump Punts on Syria: The Forever War is Far From Over
Dave Lindorff
Shut Down the War Machine!
Glenn Sacks
LA Teachers’ Strike: Student Voices of the Los Angeles Education Revolt  
Mark Ashwill
The Metamorphosis of International Students Into Honorary US Nationalists: a View from Viet Nam
Ramzy Baroud
The Moral Travesty of Israel Seeking Arab, Iranian Money for its Alleged Nakba
Ron Jacobs
Allen Ginsberg Takes a Trip
Jake Johnston
Haiti by the Numbers
Binoy Kampmark
No-Confidence Survivor: Theresa May and Brexit
Victor Grossman
Red Flowers for Rosa and Karl
Cesar Chelala
President Donald Trump’s “Magical Realism”
Christopher Brauchli
An Education in Fraud
Paul Bentley
The Death Penalty for Canada’s Foreign Policy?
David Swanson
Top 10 Reasons Not to Love NATO
Louis Proyect
Breaking the Left’s Gay Taboo
Kani Xulam
A Saudi Teen and Freedom’s Shining Moment
Ralph Nader
Bar Barr or Regret this Dictatorial Attorney General
Jessicah Pierre
A Dream Deferred: MLK’s Dream of Economic Justice is Far From Reality
Edward J. Martin
Glossip v. Gross, the Eighth Amendment and the Torture Court of the United States
Chuck Collins
Shutdown Expands the Ranks of the “Underwater Nation”
Paul Edwards
War Whores
Peter Crowley
Outsourcing Still Affects Us: This and AI Worker Displacement Need Not be Inevitable
Alycee Lane
Trump’s Federal Government Shutdown and Unpaid Dishwashers
Martha Rosenberg
New Questions About Ritual Slaughter as Belgium Bans the Practice
Nicky Reid
Panarchy as Full Spectrum Intersectionality
Jill Richardson
Hollywood’s Fat Shaming is Getting Old
Nyla Ali Khan
A Woman’s Wide Sphere of Influence Within Folklore and Social Practices
Richard Klin
Dial Israel: Amos Oz, 1939-2018
David Rovics
Of Triggers and Bullets
David Yearsley
Bass on Top: the Genius of Paul Chambers
Elliot Sperber
Eddie Spaghetti’s Alphabet
FacebookTwitterGoogle+RedditEmail