Tuesday, September 3, 2019

High Priced Pharma Problems


US health insurance companies who cover high-priced prescription drug coverage should be able to pressure pharmaceutical companies into reducing their costs, but they don’t.  These are sometimes covered by Medicaid in each State. This is most common where the patented version of the medicine works, but the generic version doesn’t work.

The health insurance companies are liable for higher cost medical treatments that are needed when effective prescription drugs are denied.

The Pharma companies claim that they charge unaffordable prices for these drugs in order to pay back their research costs. This might work for wealthy patients, but it doesn’t work for indigent patients. If the patient needs to take 2 pills per day or 720 pills per year and the price per pill is $10, the annual cost of this medication is $7,200 per year.

Doctors are spending time arguing with insurance companies and patients who can’t get the prescription medications they need will end up in hospitals and bills in excess of $100,000.

The way for an indigent patient to get Medicare Part D Prescription coverage is to ask for a “Special Needs Plan” from Medicare and sign up for Medicaid in their State. This is done by insurance brokers accessible on insurance company websites.

Insurance is a “cash-flow” mechanism and the price is based on risk.  Health Insurance Companies build a 30% “reserve” into the premium. They estimate the “maintenance cost” of pre-existing conditions to historical, statistical risks and add 30%.

The best insurance is self-insurance.  Ensuring that your spouse can be self-supporting in the event of your death or disability is basic. Most insurance can be replaced by “net worth”. Cash reserves should pay for routine maintenance of your house and cars.

Norb Leahy, Dunwoody GA Tea Party Leader

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