Monday, April 14, 2008

Sicker? Pay More. Healthier? Pay Less.

Insurers are now asking patients to shoulder more of the costs for expensive life saving drugs than in the past as a way to manage rising healthcare expenses. Is anyone surprised? A NY Times article found that:
  • insurers abandoned the traditional arrangement that has patients pay a fixed amount, like $10, $20 or $30 for a prescription, no matter what the drug’s actual cost. Instead, they are charging patients a percentage of the cost of certain high-priced drugs, usually 20 to 33 percent, which can amount to thousands of dollars a month.
  • Private insurers began offering Tier 4 plans in response to employers who were looking for ways to keep costs down, said Karen Ignagni, president of America’s Health Insurance Plans, which represents most of the nation’s health insurers. When people who need Tier 4 drugs pay more for them, other subscribers in the plan pay less for their coverage.
  • 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.
While it would be easy to blame the insurers for doing this or the employers for asking the insurers to come up with more affordable premiums, the real reason for this cost shifting is because health insurance is this country is not considered a shared responsibility among all. Specifically, the healthy buy health insurance not only for themselves but also to partially subsidize those who are ill.

Increasingly however our healthcare system is stratifying into different segments with the healthiest opting out or only paying what their true costs are. As a result, those who are sickest need to pay even more than in the past because there are no others to subsidize their costs.

Without true healthcare reform, i.e. universal coverage, these kind of stories are only going to continue. That's the real tragedy.

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