Originally published at: https://boingboing.net/2018/08/20/anthem-patient-paid-a-285-cop.html
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The Free Market Works! /s (though in the bizarro world that we live in, this story of occasional bargain-basement drug deals will undoubtedly become an argument for Keeping the Governments’ Hands off Health Care.)
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Its very possible that this isnt on the insurance company. We discussed this a little in the recent epipen post. Its not uncommon for drug makers to charge insurance companies exhorbinant prices for drugs, while keeping the price relatively low when purchased out of pocket. Or through certain retail venues. Basically allows them to avoid the appearance of price gouging while gouging away. Since most people will never see the rate their insurance is paying. But those insurance companies often pass the excessive price on in the form of increased copays.
We dont expect that out of generics, but thats more going to depend on who is making that generic and how many competing generics are on the market. When theres only one makee of a generic, and especially when that maker is the same company that makes the name brand. Theres nearly the same ability to manipulate price.
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Since the Anthem spokesperson had no explanation, perhaps one of our resident Libertarian “contrarians” can enlighten all the BB pinkos about how this is just another instance of the “free” market proving its superiority over a single-payer universal system (AKA “the ro-o-oad to serfdom”).
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So she went to Costco and bought the medicine. She was surprised that is cost only $40.
For those that don’t know, anyone can use Costco Pharmacy, not just people with memberships. Their drug prices are amazingly fair. In fact I still pay the cash price for my Tramadol vs a pharmacy copay. I am not 100% sure but I think I could save a little money going the copay route, but since they saved me literally ~$65 per month over CVS or Walgreens when I didn’t have insurance, I don’t mind paying $5 extra.
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Fuck that, single payer system is the way to go
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Except to the extent that they are a core element of the structural conditions that created these shenanigans.
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Slightly off topic Anthem ragging: a few months ago we received a “Questionnaire” in the mail from them, so it went straight in the recycling.
Apparently, one question on the questionnaire was, “do you have insurance through another provider”, which, you know, what business is that of yours?
Because we hadn’t answered that item, they quietly started rejecting all of our claims. I only noticed because I happened to go into their site to check where we were with our deductible.
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Isn’t the point of an insurance based medical system that the insurance company pays for your medication? Otherwise, why bother?
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It may be an inadvertent “perverse incentive” created by Obamacare’s 80/20 rule.
The 80/20 rule requires insurance companies to take no more than 20% of premiums for anything other than health care costs. So, if insurance companies only get a 1/5 slice of the healthcare cake, the way to get more cake is to get a bigger cake (aka raise the cost of healthcare).
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I’ve long understood that drug retailers frequently price generic versions of some drugs at a (very large) fraction of the price of the name brand version, regardless of what the drug actually costs. This makes many generics huge profit centers.
Costco doesn’t do that. Their retail prices are pretty close to what the drugs actually cost.
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This is an awfully complicated area. It’s part of what I do for a living.
Drug copays can be nearly random. Anthem has many plans, including Medicare plans, employer plans, and exchange plans, and each one might have a different price. That’s due in part to actual drug prices, but also due to negotiations between the health plan and the manufacturer, which are way above my pay grade.
The discrepancy in this case is especially huge, but it makes sense the most extreme case would be the one in the headlines, right? It’s one of many arguments for single payer.
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it’s not just the insurance company making a crime here, it’s your politicians
to protect corporate profits, our government has decided to make it illegal for pharmacists to tell you when it would be cheaper to directly buy a medication than use insurance
#yayUSA
so pharmacist isn’t going to risk their employment just because you aren’t clever enough to spend 10 minutes price shopping and instead assume the world is just going to be honest and fair to you
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even in so far as they lobby hard to keep the status quo, and keep that structured so they can maximize profits.
Its not like these companies are choosing to pay crazy prices for drugs. The examples from the epipen thing were one gemeric that went for about $300 except at cvs. And another that was $4500 to insurance. But free if you made less than $100k a year. Except if you were on medicare/medicare. Or apparently with some sort of promotional coupon.
Large chains like cvs, costco, walmart have enough pull to negotiate lower prices. And famously actually have generics manufactured for them by smaller drug companies to lower price. Or have compounding pharmacies produce/package patented drugs at lower prices. And they’ve got enough influence in the market to negotiate special lower pricing from the major drug companies. Your local pharmacy, doctor or hospital doesnt have that kind of pull or those resources.
Like wise the insurance companies themselves. The biggest pool is medicaid/medicare. Which can’t really negotiate on drug price. But on the things they can negotiate on they pay vastly less than anyone else. The biggest insurance groups that can negotiate, usually public employee benefit systems. Dont tend to pay rediculous thousand dollar reimbursal rates for common drugs. But smaller pools of insured due, because they lack the pull to say no. Thats why we see scaled copays and generic drugs being required over name brand ones.
So im just saying its probably not as simple as “this drug is $30 at costco and hundreds through insurance”. Costco’s probably got some special pricing arrangement to get it below the regular non-insured rate. And we havent seen what the insurance is paying out for the drugs.
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I’m a big fan of first-world, single-payer, and would love to see it in the US. However, this isn’t the “free market’s” fault. The drug system is so thoroughly gamed and captured through purchased law that people cannot make direct purchases and/or comparison shop, the way they might in a true free market. We have layers upon layers of legally-mandated middlemen (who wrote those laws for their pet politicians to sign), and I call it a kelptocracy, or a corpocracy, or a coprocracy… 
It’s certainly not “bad stuff from the free market” though.
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Rejecting claims because “you have another provider” seems outrageously baseless to me, especially considering the bills are being sent to them, not this supposed other provider. Did you look into how this could even be legal? Couldn’t all of someone’s providers do that and then they would have no coverage, or are they only able to force you to confirm each bill is really for them, the insurance company to which it was sent?
Back on topic: I’m certainly not defending the pricing, I think it’s ridiculous and I wouldn’t be opposed to regulation to curb it (since people might have a tendancy to…trust their health care providers), but the free market answer is: consumers get the most out of the market when they are informed; access to other sources was not restricted, people can shop around for this sort of thing rather than accepting insurance pricing.
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Hence little reason to negotiate lowered pricing.
Imagine if our insurance plans had to pay 100% of our outpatient drug costs. You know, just like they pay 100% of our in-patient costs. Think they might negotiate better when the difference came out of their bottom line?
And, what exactly, is an argument that makes sense for why they are not required to do so, when prescriptions are required to be written by doctors, not patients?
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Sure they are…
…they have chosen to pay (say) $200+ for the drug from the wholesaler rather then buy them from Costco at $30 and resell them at say $40.
That is Costco’s original premise, to be a wholesaler for local businesses that can’t work out a better deal with a “real” wholesaler after all. It just turns out that it is also a good place for “normal” people to buy all sorts of stuff. At least if they enjoy shopping in bulk…
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GoodRx for the win. They have an app such that you can see where, near you, the best price for your particular prescription resides.
I have found that the GoodRx copay was almost always less than the ExpressScripts price. After checking prices, I’ve found that it’s effective to have 90 day supplies filled at what happens to be my closest, default, grocery store (Safeway).
(Exception: dirt-cheap drugs, the difference was negligible, and the convenience of 90-day supply auto-mailed is pretty damn sweet.)
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