Health Care Lottery, Shirley Jackson Style
The old idea of insurance was to spread costs by having the relatively healthy subsidize the sick. But many insurers and pharmacy benefit managers are challenging that ideal:
Instead of paying a modest $10 to $30 co-payment, as is usually the case for cheaper drugs, patients who need especially costly medicines are being forced to pay 20 percent to 33 percent of the bill (up to an annual maximum) for drugs that can cost tens of thousands of dollars, or even hundreds of thousands of dollars, a year. . . .
The insurers say that forcing patients to pay more for unusually high-priced drugs allows them to keep down the premiums charged to everyone else. That turns the ordinary notion of insurance on its head. Instead of spreading the risks and costs across a wide pool of people to protect a smaller number of very sick patients from financial ruin, insurers are gouging the sickest patients to keep premiums down for healthier people.
It’s not just insurers; drug benefit managers (who were supposed to be a great market innovation for holding down drug prices) are sticking it to those with rare illnesses.
These trends shed new light on consumer-directed health care plans that promise to deliver cheaper insurance “designed for your needs.” Most people are healthy, and don’t need much care. But ill-conceived “breaks” for the many may subject chronically ill to a ruinous financial version of the lottery Shirley Jackson so memorably evoked.