The Reality of Health Insurance Copayments: The Insulin Edition

There are two legitimate reasons for health insurance copayments (that is, you pay for part of a treatment or drug). The first is that copayments provide ownership: by requiring a nominal payment for those who are not indigent, it reinforces that idea that this isn’t charity, but a common social obligation, on the part of those who provide and those who receive healthcare. In other words, those who use a lot of services should provide some additional support to the system. The second legitimate reason is that it discourages frivolous use. If you have a toothache, you probably shouldn’t go straight to the MRI. Perhaps a dentist should poke at it first.

And then there’s insulin.

A couple of days ago, I was talking to a reader (hereafter “Dear Reader” or DR) about healthcare. DR is a juvenile diabetic and requires insulin (juvenile diabetes is an autoimmune disease and onset is not related to poor diet). DR mentioned to me that DR spends $100 per month on the copayment for insulin; it’s a fifty dollar copayment for every refill at the pharmacy. As far as we can determine, the insurance is only picking up about one-third of the cost.

DR is fortunate, in that the $1200 per year isn’t prohibitively expensive; DR is also fortunate in that DR’s daily usage of insulin is a lot lower than many juvenile diabetics (by about a half to two-thirds). Keep in mind this is only the cost of the insulin–we haven’t even talked about the cost of blood sugar monitoring or needles. How could a family around the U.S. median income (~$50,000 in 2008) could afford a $1,200 copayment (or even more) in conjuction with these other costs? I suppose cutting out eating is one option.

Which brings us back to the rationale for copayments. No one takes too much insulin because they feel like it (that actually could lead to brain damage if not dealt with). There’s no potential for waste involved here. Quite simply, a juvenile diabetic must have the insulin he or she needs to treat this chronic condition. If he or she takes too little, they get sick and eventually have to be hospitalized (which is expensive).
Yet, in the case of insulin, the copayment is large, and for people of modest means who are not poor, it is too much. It’s safe to assume that this is an attempt to gouge people who have no alternative.


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14 Responses to The Reality of Health Insurance Copayments: The Insulin Edition

  1. Mhlia says:

    I’m not surprised. When my husband had an appendectomy at the end of 2008 our deductible was $1,000, our copay was $1,500, and doctors visits and other costs ran about $800. Oh, and physical therapy to deal with the scar tissue and muscle weakness was $800 (but the PT was this year so it just counts towards the deductible again).
    So, I guess the appendectomy, complications from that, hospital stay, etc were frivolous. Wish someone had told us that! The sad thing is that I still feel *lucky* that we had health insurance to cover the majority of the costs and savings to cover our expenses. I think about how families on the edge of financial stability would have dealt with this and cringe.

  2. PJG says:

    There may be a semi-legitimate reason for the high copayment. If the insurance company does not make a distinction between patients with type 1 versus type 2 diabetes, then the high copayment could be meant to serve as an incentive to those with type 2 diabetes to make lifestyle changes before considering insulin or other medication-based treatments. This incentive structure may actually be beneficial to some type 2 diabetics, who are likely to gain other health benefits from diet and exercise changes.
    That said, there certainly must be better ways to manage the discrepancy in patient needs. Varying copayment with diagnosis (or therapies already tried) may be in order.

  3. Dan H. says:

    Leaving the details out, my wife had a similar issue with with obtaining Naproxen for a blood clot discovered in her leg. Insurance only allowed us to get 3 doses (1 & 1/2 days) at the pharmacy. We had to mail order the rest and borrow money to buy at full price from the local hospital to cover the days before the mail order came in.
    It doesn’t make sense to me that a life saving medicine should be mail order only.

  4. Rev Matt says:

    Well, Dan, it’s all about profits. It costs the insurance company less if you use their mail order service so they heavily favor that approach regardless of how it negatively impacts your health or finances. But at least they aren’t ‘rationing’ healthcare, right?

  5. natural cynic says:

    Something is amiss with DR’s insurance and pharmacy. WalMart sold their generic insulin for about $10 two or three years ago [Regular & NPH only]. They, and some other chains have much cheaper testing supplies, too. These are not the best choices for modern diabetes treatment, but still… I pay $20 for Novolog and $38 for Lantus – retail, no insurance – at my local county hospital pharmacy, and according to the pharmacist there, that’s the wholesale price, the pharmacy staff is subsidized. I know that they cost a whole lot more at a regular pharmacy. For those who take insulin by injection, Lantus & Novolog [or Humalog} is about as state of the art treatment as possible. Getting infusion supplies for insulin pumps does cost a whole lot more.
    The inflation of copays is just another reason to … health insurance executives. Betcha’ insulin is cheaper everywhere else in the world, too.

  6. D. C. Sessions says:

    No one takes too much insulin because they feel like it (that actually could lead to brain damage if not dealt with).

    If by “brain damage” you mean shock which rapidly progresses to death, then yes. Fortunately, “treatment” can be as simple as oral sugar.
    The really fun stuff comes when the Death Panel limits the number of covered test strips.

  7. John says:

    That’s even worse than our experience: Great West, while they were recently losing customers, rolled back coverage on birth control. I guess that’s one way to boost membership…

  8. speedwell says:

    My insurance does limit the number of test strips I am allowed, and since I don’t use insulin and I am off all but one of my blood sugar meds, I test after every meal and snack. I am a fanatic about testing because it helps me see what I am and am not responding to in my diet and exercise record. My blood sugar is plenty tightly controlled for me to keep my feet and my eyesight and my (remaining) kidney, thanks.
    But I’m a Type 2 diabetic so I suppose some insurance company somewhere will decide I deserve to be punished.

  9. Donna B. says:

    I thought Naproxen was a no-no for blood clots… and it’s available OTC in lower dose tablets isn’t it?

  10. Dan H. says:

    I really messed up the name. It is Lovenox.

  11. Kaleberg says:

    We already have “death panels”. They take $3 for every $7 spent on medical care so they are very profitable. I’m on Medicare, which is a much less efficient being a government program. I only takes $1 for every $19 spent. Luckily, most old people, that is, the folks most likely to die, get to deal with inefficient government death panels rather than highly efficient private sector death panels.
    By the way, “cutting out eating” actually does help diabetics. They discovered this in the siege of Paris back in 1870. Every one else was falling apart from famine, but the diabetics were improving. Starving diabetics was actually considered a form of therapy and could extend lives by years. For an excellent account, see:

  12. MikeMa says:

    Testing blood sugar regularly is nearly as important as the insulin. There are devices now available called CGMS, continuous glucose monitoring systems, that work in conjunction with insulin pump therapies to monitor blood sugar every few minutes. This not only provides an instantaneous measurement of glucose in the blood, but very valuable trending data. A diabetic’s response to a blood sugar reading of 120 (near normal) will be vastly different if that number is rising or falling steeply, or is stable. This can mean the difference between a dangerous low sugar (potentially resulting in coma) or a high sugar requiring food, and very likely, more insulin.
    Not many private insurers pay for this potentially life saving device. The setup cost is $4000 to $7000 for the pump or pump upgrade and the monthly supplies run about $600. Quality of life has a pretty steep cost for type 1 diabetics.

  13. A says:

    I remember the outrageous co-payments for my children’s vaccinations in the 1990ies; I had an BCBS PPO from a Southern State (as employee of a University there, but stationed in expensive California)[this was the only choice of insurance, other choices were restricted to using hospitals and doctors residing in that Southern State; so much for competition].
    While the advert said, they’d pay 80% of ‘Usual and Customary Charges,[UCC]’ in fact I paid most of the clinic charges. Some Vaccination might have been billed at, say $200.-; BCBS said that the UCC is $120, and got a rebate of $80.-, which they counted against the 80% of $120.- = $96.-, so they paid the clinic $16 (=96-80), and left me to pay ~$104.-(= 200 – 80 rebate – 16 Ins. Payment) I thought it was a racket.
    The UCC rates have since been improved, I understand.–
    A diabetic colleague has a similar situation; for him, once a year his regular bills/reimbursement request is denied, with the claim that his plan does not cover his insulin/strips/checkup appointment; and he has to spend an hour on the phone to get someone to agree, yes indeed, his plan does cover this, as it covered it in the preceding month/quarter/year.
    Whoever claims to be afraid of government bureaucracies did not yet have to call his private insurance over a denied claim. (The answer may be ‘Submit it again’, to be followed by another denial.)
    And for a small lab bill ($20.-, of which I had paid my copay), apparently the Insurance company’s strategy was not to pay it, perhaps guessing that it would be too costly for the lab to bill them 3 times for an outstanding ~$8.-).

  14. This is outrageous and ridiculous. I’m pretty sure insurance picks up more for medications people could get by without – my grandma is on about a million things and doesn’t need all of them, but I don’t think her insurance is making her pay much in the way of co-pays. Ugh.

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