The Limitations of Health Insurance

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By Sheldon Ekirch (she/her), Minority Graduate Fellow in Public Health

Prior to enrolling in Medicaid, I received a pack of four weekly injections from my local pharmacy. The shots, a biological drug, helped to reduce symptoms from my chronic health condition and largely help me function on a day to day basis. Without the shots, I would struggle with the most basic tasks: from dressing myself to driving to work. This “miracle” drug is considered to be innovative and highly effective for people with my condition. The drug, however, costs over $10,000 per month at retail level, and for me, alternatives have proven to be far less effective.

You may be reading this and thinking, “Well, insurance will cover it.” For the most part, in my experience, major health insurers are unwilling even to cover a small percentage of costs of this drug—if anything at all. More often than not coverage is routinely denied. As a result of these high costs, I routinely skip refilling my medication and have since switched to a less effective drug.

The refusal of health insurance companies to cover medical bills is nothing new. Since the beginning of health insurance, companies have had the ability to refuse to cover a particular medicine or treatment, even at your doctor’s insistence that the drug is essential. In fact, out of the 299 million Americans that had health insurance in 2021, approximately 4 out of every 10 individuals were underinsured (The Pew Charitable Trusts). Policy holders were burdened with significant out-of-pocket costs, so it is no surprise that roughly 23 million people are in medical debt and that this number has only continued to grow (The Pew Charitable Trusts). Approximately 11 million individuals owe more than $2,000 of medical debt each, and roughly 3 million people owe more than $10,000 in medical debt (The Pew Charitable Trusts).

Underinsured individuals categorically report costs as a barrier to adequate healthcare. In fact, according to the Commonwealth Fund, 61% of working age adults who were underinsured reported that they had avoided getting necessary healthcare due to the cost. In this survey, healthcare consisted of “not going to the doctor when sick, skipping recommended follow-up visits or tests, not seeing a specialist when recommended, or not filling a prescription.” Individuals with chronic health conditions are routinely burdened with healthcare costs. Approximately one quarter of people with chronic health problems reported that they had not filled a prescription in the past year because of the cost. For many individuals, such as myself, not filling a prescription can be catastrophic.

In Congress, there is a semblance of consensus that healthcare costs need to be lowered. In light of this public health emergency, reforms are desperately needed. We, as citizens of the United States, must call upon Congress and demand change. This begins by holding health insurers accountable for their actions and mandating a comprehensive reform of maximum fair prices with manufactures. The Inflation Reduction Act (IRA) was a step in the right direction, as it authorizes the Centers for Medicare and Medicaid Services (CMS) to negotiate prices with manufactures for drugs under Medicare Part B and Part D. This law, however, does not apply to small biotech drugs (until 2028), orphan drugs, low spend Medicare drugs, and plasma-derived products. In this regard, the IRA fell short and further legislation is needed, as there remains ample room for improvement with regard to the affordability of prescription drugs.

Another area ripe for reform is at the state level. State governments should exercise their discretion and use their authority over state-regulated insurance markets with regard to drug prices. One example of how states could do this is by using federally negotiated Medicare prices as reference rates to establish maximum fair prices, otherwise known as upper payment limits. These maximum fair prices would apply to state-regulated markets, which include state employee health plans and individual insurance markets.

Drug price caps are just one way in which healthcare can be made more affordable and, hence, accessible. There are endless possibilities to improve our healthcare system, but change only comes about by holding your legislators accountable for their actions. Simply put, individuals should not be forced to forgo the medical coverage and vital care they desperately need and deserve.