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When it comes to our health care “affordable”takes on unique meaning.
For many (most) people affordable then means $0. I have been aware of and thought about this conundrum for over sixty years when I first became involved with healthcare benefits. I have seen it in action more times than receiving HD down arrows.
Health insurance evolved from true insurance in the 1940s to covering virtually all spending from the first dollar and then we made gradual attempts – strongly resisted by individuals – to return to more patient cost sharing via high deductibles and copayments.
Generally speaking, people see healthcare out of pocket costs as punitive, as a scam by their insurance company and fail to make the connection between cost sharing at the point of service and the premiums they pay.
About 60% of American workers are covered by health benefits that are self-insured (large employers) or partially self-insured using stop loss (smaller employers). The premiums these workers pay only reflect the healthcare used by fellow workers and their families. The greater the portion paid by the employer, the greater the likely affect on the wages it can pay. And yet, the resistance to out of pocket costs is strong.
Connie and I receive flu, and COVID vaccinations each year, they are “free” – to us at least. Would we receive them if we were required to pay the full cost? Well, yes, but many people would not spend the $200 or so.
Last week we spent $253 on a special occasion dinner, but if we were required to spend the same amount on health care, it would be viewed entirely differently even though the healthcare spending may have far greater value.
If you think I occasionally rant, take a look at true ranting on social media about health insurance, the cost of health care and out of pocket costs. Much of it is irrational and most is not based on facts, but does reflect the view health care should be “free.”
People posting from other countries like to point out they receive free healthcare. Of course they don’t, but it feels like it to them when they need care and that is what matters. Their true cost is hidden in taxes, but who cares as there is no thought of spending money or is there a financial barrier when obtaining needed healthcare.
Spending $80 on a ticket to a ball game or concert is acceptable- even when purchased on credit – but ask the person to spend half that for a prescription co-pay and it becomes unaffordable.
Some people, including many of those in Washington, DC, believe we Americans should become healthcare consumers by paying more and thinking about spending at the time healthcare is obtained-shoppers if you will – and that will lead toward affordability. It won’t.
People shopping on Black Friday are consumers. People concerned about health care for themselves or a loved one are not and never will be nor should be consumers looking for the best bargain.
So, what is the solution? I believe I know, but these days it’s politically charged and can’t even be intelligently discussed. If you want to see my views you can find them here. No, it’s not socialized medicine, but I have friends who are perfectly happy with theirs.
It would be nice if you would try to initiate an intelligent discussion of your ideas about how to improve our Healthcare instead of taking your usual approach of complaining about people’s misperceptions.
I would be happy to do that. That’s why I put the link in my post. I write quite a bit on the subject and that link is a place to start. I don’t think HD is the place such a discussion though.
Why not? Jonathan always emphasized that he wanted positive articles and discussions that were aimed at advancing financial knowledge. Why do you think complaining about people’s behaviors and perceptions is more appropriate for HD?
🤷🏻♂️ it’s not complaining, but trying to illustrate how making changes to healthcare coverage is so difficult.
I think the issue is the avg salary in America is about $50,000, and the insurance deductible for a family with decent coverage is $12,000 a year (In Network).
The average family deductible is not nearly that high. More like three or four thousand for a family. A bronze ACA plan can be quite high but it lowers premiums plus those plans are subject to adverse selection.
I remember when our organization started having co-pays for doctor visits. One of our admins said if they do that, she will not go to the doctor. Sounds like mission accomplished.
I think it would be helpful, if you truly want a discussion on this topic or any other, if you didn’t use your own financial situation as the basis for consideration when you are quite wealthy in terms of income. HD readers are not the general public in terms of income or assets. What is affordable to them has no relevance to affordability for most of the US population.
How can a household which has trouble paying for rent and food deal with a high deductible health plan? This is the conundrum that faces the current majority in the House of Representatives. Health Savings Plans are a joke for most Americans; they have no extra money to save.
I would like to thank everyone reading this who has contributed 1.45% (or in some cases 2.9%) or your earnings to Medicare. I suffer from blood cancer and the lifesaving medicine I take every day, Zanubrutinib, costs $14,750 each month. (That dollar amount is not a typo) I pay $2,000 annually for the Rx which is not available at CVS or COSTCO. Of course, Zanubrutinib costs much less in Canada or Europe due to our crazy politics where the pharma industry makes lots of money and uses some of it to legally bribe our legislators to pass laws that prohibit Medicare from demanding lower prices. Some other expensive drugs are allowed to be bargained for, but my Rx is not on the short list. We should not complain about drug costs unless we elect different representatives who look out for us instead of looking out for big pharma.
Keep in mind. Medicare can only negotiate prices for drugs that are:
and it’s not really negotiating at all.
I understand your perspective, but it is not as simple as you present.
At the risk of being “stoned” here, we ( my wife and I) have no complaints with the cost or access to great providers for our healthcare.
We are both on Medicare (traditional) with a supplemental plan provided by my wife’s former employer at a reasonable monthly cost for both of us. Yes, we pay Medicare premiums plus IRMMA for this insurance but it is well worth it for the coverage we get.
In addition, we are both members of the World Trade Center Health Program (having worked in lower Manhattan during and subsequent to 9/11) with certain of our conditions certified under that program, providing a 3rd insurance coverage for these conditions.
Doctor visits (for which we have many) are a $15 co-pay. Prescription drugs (for which we have many) generally are free or less than $5 per 90 day supply.
We worked for and paid into these programs for decades to receive these benefits at retirement. We have scarcely run into a provider that doesn’t gladly accept our insurance. I know that many are not as fortunate in their health insurance coverage (both while working and in retirement), but the system has worked well for us.
I agree, we have the same deal, but the thing is, the way we have it on Medicare is not how most Americans have it.
given the low allowable Medicare fees, providers don’t gladly accept our insurance they have little choice and then they try to makeup the loss through other plans. A practice could not operate on Medicare alone as it now functions.
Even working people with employer coverage often have a large deductible into the thousands plus high copays especially if they go out of network.
If you use Medicare and a supplement plan, why do you have $15 copays? Our out of pocket is limited to the annual Part B deductible under Plan G. That plan covers the 20% copay.
None of us paid for this coverage while working, we paid for someone else to have coverage.
These days, unfortunately, we have collected hundreds of thousands more in benefits than we paid in taxes. We no longer pay for Part A and the cost of Part B is 75% subsidized by general revenue, not premiums, even most IRMAA premiums don’t pay full Part B cost.
“…the way we have it on Medicare is not how most Americans have it.”
.. and Stela99’s comment of, “I think it would be helpful, if you truly want a discussion on this topic or any other, if you didn’t use your own financial situation as the basis for consideration when you are quite wealthy in terms of income. HD readers are not the general public in terms of income or assets.” Is correct.
If you pay IRMAA you are in the top 7-8% of income for Medicare recipients $106K for singles, $212K minimum, per Gemini.
The single person minimum income is more than my wife and I made for the vast majority of our working lives combined, and we still feel wealthy, but certainly no where near rich. Many make much less than we made.
Yes, some of us live in a bubble and it’s easy to lose perspective.
There was fear in the eyes of the cashier as she told me the price of one of our prescriptions. It was about $50, and she was afraid she was going to get yelled at. Heaven forbid we have to PAY for medicine.
And yes, I clearly remember the days in the early 1980s when the $100 deductibles began to die their slow and painful deaths. You’d have thought the world was entering the end of days.
You bring up great points and there is not an easy solution to fixing healthcare in America. I’ve stated my opinion in prior posts that we have too many entities that contribute nothing to improving healthcare but get a significant portion of the healthcare dollar.
I would like to end with a question: why can I get my my prescriptions filled with goodRx for a fraction of the cost if I used my insurance?
Or Mark Cuban’s Cost Plus Pharmacy.
That’s a great question, Nick. The Costco pharmacy automatically checks the GoodRx price for me; I don’t get it either.
Try checking the goodrx price yourself because I think you will find it cheaper somewhere other than Costco. My meds show the cheapest price on goodrx at Safeway but some It’s cvs or Walmart. It makes no sense
It’s simple. They negotiate better rates with PBMs and pass along the savings. Keep in mind there is really no published price for a drug. The retail price is very rarely what anyone pays. Then there is the average wholesale price (AWP) and the PBMs get rebates for putting a drug on their formulary. Sometimes your plans co- pay is higher than the actual cost. On top of that the pharmacy decides what it will charge.
Good Rx skips most of that and on generics too. I went to fill an RX and they said the price was $675. I simply said, I’m not paying that, what is your best discount price. Instantly, it was $195 and everyone still made money.
I have a Rx for a steroid inhaler. When I went to fill it the copay was hundreds of dollars. When I looked at the formulary this was the only steroid inhaler covered, and it was brand name. Being a retired healthcare provider I knew there were multiple generics available and obtained one from Mark Cuban’s Cost Plus Pharmacy for less than $50.
Why does my Medicare part D drug company charge so much? It’s the pharmacy “benefits” manager. They can force the unknowing to pay hundreds for a medication when known generics are much cheaper by not having the cheaper alternative on their formulary. This allows the PBM to make more money and share it with the insurance company.
David,
I do not have a past healthcare work background and lean on our single local pharmacy expertise to help avoid unwelcome drug interactions. While I try to understand relevant issues by reading drug specific warnings and I am aware some specific issues from dealing with our chronic health issues I worry that by using discount programs about what I do not know I am increasing our risk of an adverse medical outcome. Thus we rarely buy prescriptions from multiple sources.
Do you have thoughts to help readers like me to get both the best Rx medical advice and reasonable prices? The best medical advice is worth the potential additional cost in my thinking.
We chose years ago to use a premium part D plan and pay about triple the premium price but feel our total Rx out of pocket costs including premiums are reasonable.
Best,
Bill
Can AI do a good job of checking drug interactions?
it sounds so opaque and how does a system like this serve the American public?
It isn’t intended to serve the public, it is intended to increase profits for various parties such as, but not only, PBMs. (Pharmacy Benefit Managers)
There isn’t a solution for the US. At least not one that will be resolved in your kids’ lifetimes. Other countries seem to operate an user insured state system without punitive underwriting and/or with well regulated moderation in provider costs. But then they aren’t starting from a heavily politicised divisive issue.
There is a solution. But certainly not will even start in the next four years and until Americas are told the truth and understand our current system.
Great article, and I will definitely follow the link you provided to read more. “Affordable” is certainly a subjective word with varying meanings as you have noted. You’re even getting thumbs up!
I thought there would be a lot of discussion.
There’s nothing to discuss. The US’s non-system is a punitive mess, and it will not get fixed in your lifetime, and probably not in your children’s lifetimes. And we’ve already beaten it to death.