Before the advent of modern technology, coal miners placed caged canaries in the mines. The canaries would easily succumb to poisonous gases in the mine and warn the miners of danger. When the canaries stopped singing, the miners knew it was time to evacuate the mine. While canaries are no longer used for this purpose, the miner’s canary metaphor is frequently used to sound a warning for emerging problems.
Like carbon monoxide seeping into a coal mine, our health care system is becoming unsustainable. While there is considerable rhetoric about the topic, most politicians are unable or unwilling to deal with the underlying causes.
Diabetics are on the precipice of the health care crisis because insulin has become unaffordable for many. They are our miners’ canary.
As many readers know, my daughter suffers from cystic fibrosis. Because the disease attacks the pancreas, many adult cystic fibrosis patients, including my daughter, are also Type 1 diabetics.
Like many other diabetics, my daughter’s health insurer recently notified her that the type of insulin she uses is no longer a covered benefit, and if she wanted to continue using it, she would incur monthly costs of nearly $2,200. Unfortunately, she is allergic to the only type of insulin that was covered.
In response to the situation, she appealed to her insurance company to no avail. She reached out to the Cystic Fibrosis Foundation advocacy unit, which was unable to assist her.
In desperation, she posted a description of her situation in social media. Two remarkable things happened. First, numerous diabetics offered to share their insulin with her. Second, within an hour the insurance company offered to pay for a 30-day supply of the drug.
A week later, the insurer apparently reconsidered her situation and has agreed to pay for the drug for the next 12 months.
My daughter’s story is similar to those of many diabetics. So why did this happen?
According to recent testimony before the Senate Finance Committee, since 2013 the price of my daughter’s insulin has increased from $289 to $540 per weekly dosage. However, the drug makers claim that, while the list price of drugs has increased sharply, what they receive has not increased substantially during this period.
An American Diabetes Association study concluded that a complicated supply chain is causing higher prices for the consumer. Pharmaceutical benefit managers (PBMs) negotiate on behalf of insurance carriers which drugs are covered by various insurance plans. In exchange for including a drug in coverage, the PBM gets rebates from the manufacturers. If the drug maker does not agree to the deal, the PBM can remove the drug from the list of the insurance companies’ covered medications. The PBMs and drug makers blame each other for the high cost.
By comparison, in Canada, my daughter’s insulin costs about $150/week. This comparison strongly suggests price exploitation by the U.S. supply chain.
This phenomenon is not restricted to insulin. This past week, I received a letter from my Medicare Part D insurance carrier stating that a generic medication I have been taking for years will now only be available in smaller doses at a higher cost to me. Before I was covered by Medicare, the last time I filled this prescription it cost me $4.78. Under Medicare, the cost is $35. Since I had not met my deductible in either year, I paid 100% of the cost each time I filled the prescription.
One of the principal drivers of health care inflation is pharmaceutical costs. In 2017, the last year that I was covered by private insurance through my former company, I was told that 70% of the increase in premiums was attributable to increased pharmaceutical costs. At that time, I was included in a risk pool where 90% of the covered individuals were under the age of 40. Since older people consume more prescription medications, the overall impact of pharmaceutical inflation must be greater than my former company experiences.
Apparently, my daughter’s social media post attracted the attention of Bernie Sanders. His campaign reached out to her and said he would like to meet her next time he is in California.
Unfortunately, like most politicians, Mr. Sanders does not adequately address how costs will be contained. Switching to a Medicare-for-all system, or any other single-payer system, does not address the underlying profiteering that currently afflicts both private health care and government-run programs. Profiteering, particularly in the context of life-sustaining medications, is unethical and immoral. It also opens the pathway to anti-capitalistic rhetoric and paves the way for socialism.
We need to overcome the lobbying efforts of the health care industry and devise a sustainable solution to our health care dilemma.
Jim de Bree is a semi-retired CPA who resides in Valencia.
