Peter Kolchinsky

And of course all patients need to have insurance with low OOP costs. That can be called universal insurance, but that doesn’t mean that it must be a single government plan (ie single payer, Medicare for All). Insurance plans can, should, and do compete on quality.

But instead of competing to charge the lowest premiums by trying to figure out how to deliver proper insurance (ie. pay for treatments you need when you fall ill) more efficiently, insurers keep costs down by jamming plans full of loopholes. Like less honest Swiss cheese.

They used to discriminate on the basis of pre-existing conditions (remember?), refusing to pay for a woman’s treatment for recurrent breast cancer because she had beaten it once before when she was on a different plan. That kept premiums down but left patients hanging.

Congress outlawed that practice. So plans switched to increasing deductibles and copays, more broadly discriminating against the sick when that’s who it’s for. There are even loopholes so clever that an insurance company can make more off of you when you get sick. Here’s how:

Let’s say you need insulin. Your plan has negotiated a big rebate from the drug company for that insulin. You have to pay full price out of your deductible but your insurance keeps the rebate. Congress knows about this tactic and is working to close it.

The point is that $271B is affordable for America and can be affordable for patients but only if patients have proper insurance. The trouble is that right now only about $210B is sourced from taxes and premiums and $61B is charged to patients as OOP costs. (Source: IQVIA)

In the context of nearly $3T collected in total in taxes and insurance premiums for healthcare (the vast majority going to doctors and hospitals), leaving out the $61B (2%) that makes drugs unaffordable to some seems a bit arbitrary. You can’t say that 2% is unaffordable.

It would take ~2% increase in premiums to make branded drugs affordable to patients. Considering our nation’s $17.6B in personal income, it would take a 0.3% rise in taxes to pay for all OOP costs. Not impossible - just a choice.