Monday, April 14, 2008

Even with insurance, you can't afford to get sick

The latest scheme devised to shift the burden for healthcare from insurance companies to the sick, those upstanding humanitarians of the insurance industry have implemented a new pricing scheme that has patients paying a percentage of actual cost of the drugs instead of the traditional set-amount co-pay. This means that patients have seen their monthly expenses for lifesaving drugs skyrocket, sometimes to hundreds, or thousands, or dollars per month.

It isn't clear how many patients have been negatively impacted by the shift to this pricing scheme, commonly referred to as "Tier 4 Pricing" but the drugs subject to this price structuring are used to treat relatively common disorders such as Multiple Sclerosis and Rheumatoid Arthritis, as well as some cancers and communicable diseases such as Hepatitis C. Drugs to keep the effects of these diseases at bay, preserve quality of life and alleviate pain and suffering can cost in excess of $100,000 per year.

The result is that many patients are faced with monthly drug bills that exceed their monthly income. They either have to pony over the dough or do without their needed medications.

The concept of "Tier 4 pricing" got underway with the advent of Medicare drug plans, and spread like a cancer throughout the entire system, now being a component of a full 86% of those plans in force today. It has also spread to the private sector. Where it was practically unheard of in private and employer-offered health plans five years ago, it is a component of a significant portion of those plans. Private companies started offering a "Tier 4" pricing scheme in order to offer an option to help employers keep premiums down.

But the new system sticks seriously ill people with huge bills, said James Robinson, a health economist at the University of California, Berkeley. “It is very unfortunate social policy,” Dr. Robinson said. “The more the sick person pays, the less the healthy person pays.”

Traditionally, the idea of insurance was to spread the costs of paying for the sick.

“This is an erosion of the traditional concept of insurance,” Mr. Mendelson said. “Those beneficiaries who bear the burden of illness are also bearing the burden of cost.”

And often, patients say, they had no idea that they would be faced with such a situation.

I first noticed the trend starting exactly five years ago. I was working for a local hospital system that sold to Hospital Corporation of America on April Fool's Day 2003. We all had to go to a seminar led by the benefits coordinator, who explained the new policies and what they offered. What caught my ear was the "prescription rider" option. If you needed expensive drugs that had no generic equivalent, you were encouraged to sign up for the additional rider. Our copay for generics was going to go up to ten dollars from five, and if we needed name-brand drugs, we would have to pay a percentage rather than the traditional $35 copay we had been paying under the insurance we had through Health Midwest. (I want to say it was 25% we would be responsible for, but I can't recall exactly - not needing any name-brand meds, I passed - but a year later when I got a prescription for Ambien, it cost me $55 to fill it at Costco - only to find out after one dose that I can't take Ambien, I turn into Patrick Kennedy.)

I do know that my coworkers and I got really cynical really fast, and questioned whether or not what they were peddling could even be accurately classified as "insurance." Now, the Fristification of American healthcare is just about complete.