Sounds like roulette, ‘Pick a card! Any card!’ With no way of knowing what meds you’ll need in future? That sounds crazy!
As a citizen of a country that handles such things very differently, discussions such as these leave me shocked and aghast, at how convoluted and complex it all is! But two things always jump out:
How/why make the sick, traumatized, elderly navigate such a nightmare system at what must already be an extremely trying time for them? Gosh, it just seems so heartless and cruel somehow.
I am unendingly impressed that y’all manage to navigate such a complicated system. Not without complaint, quite reasonably. But still, y’all find a way, against seemingly long odds and what appears to be a deck stacked against you sometimes. Sincerest props and admiration for your fortitude.
The problem is that people in the US fixate on whether someone gets benefits they “don’t deserve” (Note that the people who feel this way also think they deserve any benefit they’re eligible for.) So they insist on putting up roadblocks to make sure this doesn’t happen. Of course, people still cheat the system even with the roadblocks, but at least “undeserving” people (e.g. people other than you) are supposedly kept out.
Good point. The US spends a significant amount on means testing in all programs.
All citizens should receive the benefits of government programs. The upper .1% should receive the same benefits as the rest of us. It will have little or no impact on the cost, whereas means testing is expensive and confusing.
It’s the same exact deal for every other aspect of healthcare here, minus the discount cards.
If you need a knee replacement, or even just an appointment for an ear infection, you can’t simply call up the doctor and ask how much it will cost you. They have no idea. They can tell you the cash price - the price if you have no insurance at all - but that’s it. Everyone’s insurance provider has negotiated with the clinic separately and arrived at different prices for the same service. And it’s not just at the insurance company level - Humana policy ABC123 might have a different pricing agreement than Humana policy XYZ456.
Doctor’s appointments, procedures, tests, medications, hospital stays…we have no idea how much we owe until about a month after the thing is done and our insurance company figures out how much the provider can charge under their agreement, how much of that the insurance company will pay and (this is where it gets even weirder) how much of the difference your provider is allowed to bill you for. Sometimes your statement will tell you that the doctor charged $1000, the amount insurance will pay is $800…and you owe nothing. Or maybe you’ll owe $200. No one knows until it’s over.
There is absolutely no sense in paying a doctor’s bill when you’re leaving the office. Most of them won’t even let you. You have to wait a month for your Explanation of Benefits letter, and then another 2 weeks or a month to get the actual final bill from your doctor.
It is incorrect to say that there are no market forces at work.
The Part D plans negotiate prices with manufacturers. They create a formulary, with the formulary drugs on tiers. The tiers determine how much a given drug will cost.
When someone suggests that Medicare as a whole should be able to negotiate, they are simply talking about this formulary writ large. Some drugs will be preferred, and others will be non-preferred. That’s what the negotiations determine.
Just as you drove farther away to try to get a better deal. That’s a market force at work. The plans try to negotiate. That’s a market force at work. You want Medicare to negotiate. That’s a market force at work. You apparently have discount cards from the manufacturers. That’s a market force at work.
I was under the impression that Canada’s universal healthcare system doesn’t cover prescriptions (at least for able-bodied adults) and most Canadians either rely on private Rx insurance or just pay retail out-of-pocket. Canada does have price regulation that the US doesn’t, but otherwise prescription medications are handled mostly the same way.
It shouldn’t be that much of a surprise. If have Part D coverage (either in a stand alone PDP plan, or as part of a Medicare Advantage plan) your insure should mail each of you a paper formulary (listing what drugs are covered, what if any restrictions they have, & which tier they’re on) for the upcoming year in the fall (along with a bunch of other big packets of documents).
Also if you call the insurance company in advance they can tell you if a given medication is covered, and at least give an approximate cost. You may not be able to get an exact cost of you have a deductible you haven’t met yet, you’re on the Coverage Gap or Catastrophic stage), or if medication has a coinsurance instead of a fixed copay.
In Canada most provinces have Drug Benefits for seniors, so after 65yrs of age, in my province, you only pay the first $100 out of pocket, in a calendar year, the rest is covered.
And, of course, the province negotiates for all drugs so the costs are substantially reduced to start with.
But no, choosing a card and hoping for the best, forms, qualifying, red tape etc.
So, you’re not wrong, but, it’s very different even so.
Also, you can probably go online to your insurance company’s website and find your formulary there. I know I can. And I can go online to my pharmacy’s website and find out how much my refills will cost before I pick them up. And the copay should be the same no matter where you pick them up. It doesn’t matter if you go to Walgreen’s or CVS. I don’t have to drive 60 miles. I can drive a couple of miles up the street.
What market forces are in play when an insurance company negotiates prices with a pharmaceutical company. Market forces usually take the form of quantity, availability, or quality. What impact does the insurance company have on any of these three items. The insurance company is neither the manufacturer or the purchaser. The market is controlled by forces that are far removed from the insurance company.
There is no competition involved. There is no supply and demand involved. There is no quality gradient involved.
Medicare represents the purchasing power of the sum total of it’s enrollees. It would be reasonable, and efficient, for Medicare to negotiate standard drug costs for all of it’s participants. Artificially inserting an outside participant (insurance company) into the process increases cost without adding any benefit.
So, from the discussions above, the question still seems to be: what value is added by the insurance companies? What is the economic basis for the Part D scheme?
They are the levels of payment for various drugs. Every drug on a plan’s formulary is assigned to a tier. All of the drugs on a particular tier have specific rules for copayments or coinsurance.
That leads to things like “Drugs on Tier 1 are $2; Tier 2 are $3.40 plus 20% coinsurance…”
Drugs are put on tiers in order to influence how beneficiaries choose between them. There may be statins, for example, or three different tiers, so they would all cost different amounts.
The insurance company is negotiating about how much they will pay the pharma co. for their drugs. Would you say “There are no market forces in play when Walmart negotiates the price of widgets”? The company says “We will put your drug on the preferred tier so that people will buy more of it if you give us a better price.” That’s the market.
The insurance company is the purchaser. You go to the pharmacy and pay $2 for a drug and the insurance company is paying the rest of it.
There is competition between drug companies to get the best deal for themselves with the plans. There is competition between plans to get the most Medicare beneficiaries to choose their plans.
Medicare represents the purchasing power, but in order to show great benefits from Medicare negotiating drug prices, the program would have to be willing to exclude some drugs from the formulary. Do you want some drugs to be excluded so that no one on Medicare can buy them? It’s a difficult trade off and one that shouldn’t be taken lightly.
What do the plans offer? Well, they do price negotiation in lieu of the program doing negotiation. Right now, one plans can drop a drug off the formulary while another plan might have that drug on its formulary. If you have program-wide negotiation, you wouldn’t have the option to switch to another plan to get the coverage. Again, that’s the trade off and we can’t minimize it.
That’s OK for folks who live in metropolitan areas. I live in a small, New Mexico town. A few years ago Walmart moved in and subsequently all their competition has closed’
To get to CVS, Kroger, Walgreen etc., is a sixty to ninety mile drive one-way.
The status of ones health is not franchise dependent. I pay about $1200 a year in taxes for the local hospital. Why do I have to bribe an insurance company for uncertain medical costs at an inaccessible outlet?
"Drugs are put on tiers in order to influence how beneficiaries choose between them."jsg#31
I get sick - the Dr. gives me a prescription for something - I give it to the Pharmacy - they give me pills and I give them some amount of money. Where did I as a ‘beneficiary’ have any choice?
"There is competition between drug companies to get the best deal for themselves with the plans. There is competition between plans to get the most Medicare beneficiaries to choose their plans."jsg#31
Competition requires product differentiation. There is a desire for the two companies to reach an agreement that maximizes their profits. That is not competition. A person with a chronic disease may have to take the plan that offers a, life supporting, drug in use at that moment. That is extortion, not choice. The most beneficiaries would be all Medicare participants.
"The insurance company is the purchaser. You go to the pharmacy and pay $2 for a drug and the insurance company is paying the rest of it."jsg#31
No, I am the purchaser. The insurance company makes (I assume) a parallel transfer of funds as part of some accounting system. The amount of dollars transferred by the insurance company must be considerably less than they collect from those in the plan.
Medicare represents the entire system and could not delete any drugs from negotiation with suppliers. There is an average selling price that is acceptable to each and every supplier for each and every one of it’s products. Medicare should negotiate that price and distribute it among it’s array of ‘tiers’ to meet whatever criteria it has established. That would eliminate the artificial overhead of insurance companies.
"I’m not sure I understand how an insurance company is at fault that Walmart moved in and CVS and Walgreens is far away? " jsg#33
Part D is intended to provide a benefit to the citizens of the US. To do so it must accommodate the realities of our modern economy. When the insurance company, in this context, has preferred distributors, it limits access by the public. Not so much in urban areas but definitely for rural citizens.
But what percentage of prescriptions need to be filled the same day? I suspect that the vast majority are maintenance meds, or for chronic conditions, and can be filled by a mail-order pharmacy, probably more cheaply than a local one.
Good point and I assume it works for lots of folks.
The problem is that the system is not symmetrical. All services are not available from all suppliers at all times. I can’t just go to Walmart or CVS or Kroger online and place a mail order.
It does make sense, but they may not want to compete with their outlets.
You can choose either to take the drug as prescribed or jump through all of the enormous number of hoops to get it changed to a preferred drug.
I am not defending this system, by the way. I think patients end up having to do a shit ton of work in our entire health care system, and they are the people who are least able to know what is the correct choice. But this is GQ, and I’m trying to answer the questions.
Yes, competition requires product differentiation. The plans do not care if they maximize the profits of the pharmas. The pharmas do not care if they maximize the profits of the plans. They are pushing on one another to benefit themselves and trying to undercut their competitors.
They are the purchaser (the “buyer” is the term we use). You are their client.
In order to negotiate, you have to be willing to say no. That’s why plans have formularies, and that’s why some drugs are non-preferred on formularies. I’m not sure Medicare beneficiaries really want the entire formulary to be decided at the Medicare-level. You think you don’t have choices now? You’d have fewer choices then. Even the rudimentary price comparisons some people do for drug coverage are choices.
Some choices aren’t worth their costs, but choosing between two plans is still a choice. The plans offer different formularies. They offer different tiering. Having one formulary and one set of tiering is having less choice. That may be worth it to you, but it may not be worth it to everyone. It’s actually a difficult balance, policy-wise.
A preferred network means a network within a network. So you can still use the non-preferred network.
I have policy things I can say about preferred networks, but that’s not a GQ answer.
Usually, plans are required to demonstrate the coverage of their networks, but not necessarily their preferred networks. I have policy things to say about that, but that’s not a GQ answer, either.
You and your doctor had the opportunity to discuss this; most plans, for example, encourage you to take the formulary to the doctor’s office. For example, on my plan, ciprofloxacin and erthromycin are on different tiers, with different costs, but they are both antibiotics. They don’t have quite the same action, and they may or not be interchangeable for my purposes, but I and my doctor have the opportunity BEFORE he gives me the prescription to discuss the relative benefits and costs (maybe a tetracycline or penicillin that I can afford would be better than a fluoroquinolone that I can’t).
It’s very rare (probably impossible) that a drug is only available from one plan; you just pay more if you make a bad decision on which plan to take. You have a choice: pay $X and get these drugs at $Y price, or pay $A and get these same drugs at $B price.
That also means you have a choice of pharmacy: every pharmacy plan I know about lets you buy from any pharmacy you want, but you pay more if you don’t use a “preferred” pharmacy (i.e., a pharmacy that has a contract with your insurer). If you live in remote New Mexico, you have the choice of a plan that offers convenience (nearby Wal-Mart) or perhaps lower prices (distant Walgreens). You choose which is more important to you.
But the dollars transferred from the insurance company are likely to be considerably MORE than what you pay at the pharmacy window.