Health Care in America: Searching for Ways to Make $2 Million Seem Less Like $2 Million

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The Wall Street Journal reports that health insurers are desperately searching for ways to make expensive treatments somehow seem less expensive:

Insurers are scrambling to blunt the expense of new drugs that can carry prices of more than $2 million per treatment, offering new setups aimed at making the cost of gene therapies more manageable for employers.

Cigna Corp. plans to announce Thursday a new program that allows employers and insurers to pay per-month fees for a service that will cover the cost of gene therapies and manage their use. CVS Health Corp. says it plans to offer a new layer of coverage specifically for gene therapies, which would handle employers’ costs above a certain threshold. Anthem Inc. said it is looking at special insurance setups to help employers protect themselves from the financial impact of the drugs.

The core problem here is that employers end up paying for these treatments, not insurers. If you’re a big company, that doesn’t matter much. It all comes out in the wash. But if you’re a small company, a sudden $2 million increase in your premiums is a killer. That’s the downside of having a small risk pool.

The answer, obviously, is to quit playing games with insurance companies and move everyone into the biggest risk pool of all: the entire country. This is one of the things that makes universal health care more efficient than our current Rube Goldberg system. Not only can the US government negotiate better prices for new treatments like this, but it can spread the costs far more widely than any single company or insurer. That’s both efficient and sensible.

But instead of doing the efficient and sensible thing, apparently we’re going to continue spending time arguing about whether Bernie Sanders lied when he said 500,000 people declare bankruptcy every year due to medical debt. The Washington Post fact checker says he did, and has declined to issue a correction despite abundant evidence that Sanders was basically right. Not that it matters anyway. Obviously bankruptcy has many causes, and it’s a matter of judgment whether any particular case is “due to” medical debt. You can probably make a case for any number you want. But the bottom line is that whatever the number is, it’s too big. And anyway, it’s a small fraction of the number of people who don’t declare bankruptcy but are put in severe financial trouble just because they got sick. Why do we put up with this idiocy?

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FACT:

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