Insurance Companies Oppose Drug Coupon Bill
Insurers don't want coupons for expensive drugs to count against deductibles.
![Pills by Tom Varco (Own work) [CC BY-SA 3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons.](https://urbanmilwaukee.com/wp-content/uploads/2016/11/1024px-Lexapro_pills.jpg)
Pills by Tom Varco (Own work) (CC BY-SA 3.0), via Wikimedia Commons.
The bill is aimed at curbing an insurance policy that doesn’t lower a patients’ deductible or count toward an out-of-pocket maximum when drug coupons are used.
“The patient is often faced with a very serious decision: either pay full price for your medication or walk away from the pharmacy counter empty-handed,” Tittl told colleagues during an Assembly health committee hearing on Wednesday.
Health insurers have said deductibles and co-pays help keep premiums down and that the bill doesn’t address the high cost of health care and drugs.
“Putting policies in allowing a coupon to magically meet a consumer’s deductible and out-of-pocket limit is really working against our collective interest to keep health insurance affordable,” said Cathy Mahaffey, CEO of Common Ground Healthcare Cooperative.
If coupons allow patients to pay little or nothing for drugs, Mahaffey worries people will try medications they don’t need or which don’t work.
“This is a great tactic for big Pharma to use to get people started on expensive medications,” she told lawmakers.
Jim Turk, a former marathon runner, was diagnosed with multiple sclerosis in 2008. The Madison man has insurance which helps pays for twice yearly infusions of an MS drug that costs $30,000 per dose. Turk also uses drug coupons which he called a “lifeline” because it helps him avoid a $6,000 deductible.
“If you have to choose between putting groceries on the table for your family or taking your drug, you’re going to put groceries on the table. That’s just how it works,” he said.
The Coalition of State Rheumatology Organizations said not counting financial assistance from a drug company toward a patient’s deductible amounts to “double-dipping” by insurance companies which pocket the co-pay assistance funds.
A report by the AIDS Institute said Wisconsin is one of 32 states where the majority of commercial health insurance plans have what is formally called a copay accumulator policy, which it contends allows insurance companies to profit at the expense of patients.
A dozen states have passed laws ensuring copay assistance counts toward a patient’s deductible or out-of-pocket maximum.
Listen to the WPR report here.
Drug coupons pit insurers against patients needing high cost medication was originally published by Wisconsin Public Radio.
The USA has the most corrupt health care system and the most corrupt politicians on Earth. Our lawmakers created laws which make it illegal to import inexpensive prescription drugs from Canada, Mexico, Europe, and Asia.
In many cases, we pay 2,000% more for medicine than everyone else on the planet thanks to politicians like Pelosi, Schumer, Biden, Hillary, Obama, and Trump.
Many years ago, there was a Dilbert where the pointy-haired boss said they would price their new software product at $1 million, but offer a $999,950 rebate to bring the actual cost down to $50. When asked why, he said if even one buyer forgot to apply for the rebate, they would make a lot of money.
That’s what’s happening today with many drugs. Drug makers inflate retail prices and then offer coupons to bring the cost down for many (but not all) users. That’s one reason drugs cost so much more in the US than in other countries (even similar ones like Canada).
One solution is a steep (90%??) excess profits tax on drug sales. The tax would be levied on sales revenue less 110% of drug-related costs (R&D plus manufacturing, packaging and distribution). They would not be allowed to write off marketing costs (including coupons and rebates). To avoid double taxation, drug sale revenues would become exempt from regular corporate business taxes.
It would still allow drug makers to earn a decent 10% profit on drug sales (since they would be allowed to deduct 10% more than their actual costs) and would give them every incentive to continue researching new drugs (since for each $100 of R&D, they would shelter $110 of drug sales from this new tax).
It would take away the incentive to raise drug costs to unconscionable levels (since they would lose 90% of those excess profits to taxes), especially for companies that do no R&D (like Martin Shkreli’s old firm).