Effective August 1, 2012 insurance companies and self-funded employers are required to provide Birth Control without any copays. If your plan was in place on August 1, 2012 then the change will take effect on the date of plan renewal. My plan renews on 1/1/2013.
That means that I needed to buy my own pills for the last two months of the year. See I’ve chosen to participate in a plan that used to give me opportunities to negotiate with doctors for the best rates and shop around. But ever since PPACA (commonly called Obamacare) went into effect, I’ve been having trouble negotiating additional discounts with medical providers. It seems that PPACA put teeth in a bill that was passed under the Clinton administration. My doctor could go to jail if she gives me a discount greater than the one that she gave to the insurance company. She used to be able to give a cash discount for paying at time of service but now, she could be fined or face jail time if the government found out that she used different fee schedules other than the ones she has contracts with companies to charge. So, no more cash discounts.
So back to buying my birth control pills for the last time. Usually I buy three months worth of pills for $60 ($20 per month for a 4 week supply). Well since there is only 2 months left in the year, I only needed 2 months of pills. After all, in January there is no more co-pay and my employer will be paying the full cost of my pills. So the cost of two months should be $40, right? Nope, there was a price increase in August (hmm, seeing a trend here); I was charged $75 for two months of pills. That’s an 87.5% increase in cost.
This leads me back to the first rule of Economics I was taught in college – what you subsidize you get more of. Through government regulation, employers are being forced to subsidize birth control pills but no one thought to cap the cost or the profits that the drug companies can collect. So why should I care? After all come January, I’m not going to be paying for the increased cost, my employer is going to pay it (I’m not going to explain ERISA self-funding vs Insurance premiums here).
But if my employer has increased cost in the healthcare plan then there is less cashflow for things like training, salaries, bonuses and new employees. After all, nothing is really free, there is a cost somewhere.
So, final point – has Obamacare (PPACA) helped me? Not really and the more I look at it, I don’t see how it will help anyone with a small business and I can see medical costs running at an even higher rate of inflation than they were before. I keep coming back to the thought that the problem wasn’t access to medical insurance (someone else to pay the bills) the problem was costs that were skyrocketing out of control because market forces were not in play. After all, the only place where medical costs were not out of control was cosmetic surgery – it was an area where there was competition and people shopped around.
It’s a little hard to shop for a heart surgeon in the middle of a heart attack which is why I shopped around first. If my high cholesterol causes the heart attack which I know is coming, I want to go to St. Marks instead of any IHC facility or the University of Utah. I’ve studied the St. Mark’s results and their fees and that’s where the best balance occurs. Too bad more people don’t think ahead like that.