A case study in what's wrong with our healthcare system

Okay, so this happened to me yesterday evening and it was the first time I have experienced it. I was mad for the rest of the night because of the situation and I thought maybe someone could shed some light on this for me.

A little background. I was against most of the healthcare proposals that were first introduced because of cost and not addressing the real problems in my opinion. However, I have never felt like our system worked well. I feel like private corporations are taking advantage of major loopholes in medicare, medicaid and current healthcare laws. My position has always been to clean up the fraud and waste first, and then focus on reform. I typically have defended companies like BCBS over rate increases and their overall business because I think the problems run much deeper (although I felt there was further regulations of insurers that was needed). What happened yesterday made me rethink that.

So I go to pick up a prescription from a local pharmacy. My wife lost her insurance card and decided to take mine leaving me with no insurance card. No big deal I tell the pharmacist, I don't think the medicine is expensive anyway. She tells me the total is 54 bucks and change. At this point, I decide that I better get my insurance information to them because they may have a better negotiated rate with BCBS and if not at least the $54 will go towards my deductible.

I have an individual high deductible family plan. Max out of pocket is $5,600 for the family, with no individual deductible. The plan then picks up 100% after that. The plan covers prescriptions in the family deductible so if I spend $5,600 in pills alone, I would have reached my deductible and would no longer have to pay for a prescription for the rest of the year.

So I call my wife and she relays the insurance information over the phone. the lady types it in and gives me my new total. $107! I ask the pharmacist how I could be charged double because I'm using insurance. At the end of the day, I am paying the full amount because it is a high deductible plan so it's real money to me. So at this point, I can either pay $54 cash which does not go to my deductible, or I can pay $107 cash which goes towards my deductible. At this point there's smoke coming out of my ears and I call my BCBS insurance rep with the intention of telling him what I think of BCBS. Luckily for me, he doesn't answer.

In the end, I have one kid getting tubes in his ears this year and one getting tubes out so I know I'm going to hit my deductible and it makes sense for me to pay the $107 as it will ultimately be free for me. I told the lady I would prefer to pay $107 and after a little surprise she rings me up.

So basically what BCBS is doing is claiming that they cover prescriptions and really what they do is charge me double for a prescription, keep the other $54 bucks as profit which they'll basically then pay back if I reach/exceed my deductible. Which brings me to two thoughts:

1. Do insurance companies negotiate different rates on prescriptions/procedures for different plans they offer? I could see that making sense for them in this situation because prescription plans can vary.

2. This is something that should be illegal if for nothing else than for basically lying about the service offered. I know some lawyer put this in the fine print somewhere but it is total BS.

Does anyone have any light to shed on this?

 

BCBS isn't doing this. I believe they use Express Scripts (PBM). And yes this is called a spread or a margin and they have been doing it for decades. It will make you even more mad to know that you pay an administration cost towards this within your plan.

But this doesn't happen with every drug (over price of retail). They probably did this on the drug you got to deter people from using it.

PBMs negotiate with pharmacies on price (usually through MAC lists). Then the PBM sells that price to the INS company or Group at cost+ (whatever they can get away with). Now in a self insured setting you can control what price for what drug easily.

What you should have done is paid the 57 bucks and then just paper filed the claim (the old way).

MFGs sell to Wholesalers who sell to Pharmacies who sell to PBMs who sell to INS companies who sell to Insureds. (in your instance)

Insurance should only be used as a transfer of risk. Never as a pre-paid service. You have to change what society told you Insurance should be vs. what it is.

 

I couldn't care less that there's an administrative fee. That's part of the cost of any insurance policy anywhere. This is like a tree falling on your house and if you claim it on your insurance policy, the contractor charges you double to fix it. That's BS.

This is probably true. The drug was a swish and swallow thing that I get everyone once in a while for canker sores. really, I would never have paid 50 bucks, much less 100 but it pissed me off so bad and I wasn't footing the bill, I thought I would shove it right up their ass and take a little relief.

self insured????

Like you say, I pay an administrative fee. Not my job. Part of the plan that I pay for handles that.

With kickbacks I have to think. Otherwise, how does this make sense for the insurance company if the PBM is getting the extra 54 bucks. It increases their exposure to me hitting my deductible and them incurring cost. That doesn't add up unless the full 107 doesn't go towards my deductible and even then it doesn't really add up.

I know what insurance is and probably have a far greater understanding of insurance and alternative insurance than most people on this board. However, my experience with health insurance is very limited. That has nothing to do with this situation.

 

Companies that self insured vs fully insured. They will pay claims themselves to some point then reinsurance kicks in.. blah blah blah

This really depends and they don't like the word kickback. They either share in the margin, add in on the dispensing fees, or receive part of the rebates.

I was just stating other information. My .02

 

I thought you were bringing up some sort of option for an individual that I didn't know about. Yes, i understand that anyone representing a large group of people can negotiate rates

I bet they don't

And it wasn't condescending in the least. :thumb:

 

What is even crazier is that drugs have NDC classifications or codes for each drug. Depending on the use (treatment) for the same drug the NDC can change.

So you can have 1 drug cure X (common problem) and the same drug cure Y (not a common problem like cancer) and the price be dramatically different.

 

Not to worry. The affordable healthcare bill will fix all of this and more. Just ask Red.

 

damn, checkmate again. You're on the skids homie

 

I am humbled.