Originally posted in alt.support.cancer.prostate
According to a front page article in today's NY Times, insurance
companies have been quietly changing the way they share costs for some
expensive drugs. Whereas previously, if they covered the drug at all,
they just charged a fixed copay, they will now charge some percentage
of the cost of the drug which could range from one fifth to one third.
The change started with Medicare Part D plans, most of which do it,
but it has been increasingly taken up by private medical insurers.
They do it to restrain the rate of increase of medical insurance
premiums in the face of increasing employer resistance to the cost.
Since my cancer has not recurred, I'm not really familiar how much HT
drugs cost, but I've heard that
Lupron, for example, can be pretty
expensive. But suppose someone comes up with a miracle drug which can
keep prostate cancer in remission without serious side effects. Since
the number of men needing such a drug is still a relatively small part
of the population, it is likely such a drug would be very expensive,
as many other cancer drugs are. It could easily happen that such a
drug would be unavailable to you, even though you had what you thought
was good insurance because you couldn't afford your share of the cost,
which could range from hundreds to thousands of dollars per month.
It turns out that in some cases you may be able to switch to a plan
that only charges a copay, but of course such a plan might cost a lot
more, and you have no assurance the new plan won't start doing the
same thing.
It can be argued that people who are healthy shouldn't pay for the
care of people who are sick. That violates the basic principle of
insurance, which is to share risk and costs and the larger the insured
pool the better. If you start segregating the population into
different insurance pools, the pool with the sicker people will be
more expensive and, if they have a choice, healthy people will migrate
to the less expensive group. So the sicker pool will get sicker and
more expensive. (In the extreme case, each person could be his/her
own insurance pool, which would mean each of us would pay the total
cost of our individual health care.) This is called the problem of
adverse selection. There is no magical way around it. It has nothing
to do with ideology.
In principle, there still wouldn't be a problem if the total cost of
health care never exceeded a certain amount which one could expect a
reasonably prudent person to amass. But that is clearly not true for
medical care. My wife and I, thanks to TIAA CREF doing well in the
90s, have enough of a retirement accumulation to last us provided we
don't live too long. And, in the interest of prudence we have some
additional savings. We live comfotably, but we don't spend freely as
if there were no tomorrow. But it is easy to envision medical costs
using up enough of what we have so we literally would not have enough
to live on. Fortunately, we have Medicare, which so far at least has
put a limit (still too high) on what we have to spend on medical care.
I keep hoping that if things get bad enough with respect to the costs
of medical care to affect us that the American people will do
something unheard of, such as electing people who will actually do
something about it, but I am not holding my breath waiting for that to
happen.
I think this indicates a fundamental problem with private medical
insurance. Insurers can and do charge different rates to different
classes of people. The basic incentive is to cut costs by managing
risks, i.e., whom they insure. That is what, from a corporate
perspective, they should be doing. But imagine the uproar if the
government run part of Medicare started charging radically different
rates to different people based on how sick they were. It just
wouldn't be politically feasible for them to do it. (But many
Medicare Part D plans, which are private, apparently do it with
respect to expensiv drugs. We shall have to wait to ss if that
remains politically feasible.) A single payer system, whether run
by governments of by some external agency, doesn't suffer from this
drawback. Its basic incentive is to reduce costs. It can exhort
people to live healthier life styles and perhaps encourage more
preventive medicine, but there isn't much more it can do. But it can
try to control costs by bargaining with providers---which is something
private insurers also try to do but can't do as effectively, again
because of the size of the pool. That may have downsides too, but
if the public doesn't like them it can make its will known through
political pressure.
Note that public health insurance, which in effect every advanced
country but the US has, is very different from "socialized medicine"
in which the government actually employs the providers. Examples of
the latter are the National health Service in Great Britain and the
Veterans Administration in the US. Such an arrangement has advantages
and possible dangers of its own. Such service can be pretty good,
e.g., lots of prominent American politicians are happy to get their
medical care at Walter Reed, or it can be not so good as some people
say it is in Great Britain. The medical care in France and Germany,
from what I've heard about it, is generally as good or better than
that in the US and costs a lot less, but I don't know to what extent,
if any, docotrs are slaried by the government in those countries.
In the US, we are just not going to get a single payer system any time
soon. The proposals that make the most sense to me are to set up a
mixed system in which private insurers can't segregate by risk and
provide also a Medicare like alternative. If the private insurers
can manage to thrive in such a system and provide good care while
controlling premiums, they will survive. If they can't, they will
leave the business for more lucrative opportunities. If I unserstand
Canada correctly, they basically ban private medical insurance. If it
takes a long time to schedule certain elective procedures compared to
the US, it is, I think, basically because the difference provincial
insurance systems won't pay for enough of them to reduce the waiting
time. The Canadians can of course change that if they have the will
to, but Canadians appear willing to sacrifice more for the common
good, i.e., to keep down costs, than American are. In any case, there
is no significant support for such a system in either of the two major
political parties and no presidential candidate has proposed one.
I don't believe it is possible to deal with these problems through the
tax system since few people have high enough incomes or enough other
resources to pay the potential costs. Of course you could reimburse
them the full amount using tax rebates, but i can't see that flying
politically, and it would require many people who don't now file to
learn how to do it.
.... Press all the keys at once to continue ...
___ Blue Wave/QWK v2.12
Change in drug insurance 
Linear Mode
