SOUTH PORTLAND — I wrote my first health insurance policy in 1983, during Ronald Reagan’s first term in office. As personally difficult as that is for me to digest, it means that I have been selling individual and group health plans for 34 years. A Republican was president for 18 of those years, with a Democrat holding the office for 16 years. Over that same period, Republicans controlled the House for 18 years, and Democrats controlled the Senate for 18 years.

If there is blame for the nation’s out-of-control health care system, it lies squarely at the feet of both parties, and the troubles began long before President Obama arrived on the scene.

In 1983, a person working in a small company could buy the very best plan that Blue Cross sold for around $50 a month; typically, their employer paid the full cost for it. That plan paid 100 percent of all hospital and physician-related charges, with a deductible of $100 applying only if you went to a physician’s office or needed a prescription.

Using an inflation calculator based on the Consumer Price Index, that $50 premium in 1983 would have risen to $121.12 by 2016. And the $100 deductible would have risen to $242.24. Instead, monthly premiums often exceed $500, but that $500 won’t buy you a plan with a $100 deductible. With very few exceptions, they don’t exist anymore. Instead, your $500 will buy you a plan with a deductible in the vicinity of $2,500. (I realize that many people reading this have higher premiums and higher deductibles.)

The numbers speak for themselves. It is out of control. The system will eventually collapse, and perhaps soon. A 10 percent increase on a family rate now means around $2,000 a year. Carry that out a few years, or, worse, have the actual increases exceed 20 percent, and you can see it is unsustainable for both individuals and businesses.

All the talk now is centered on how we are going to pay for health care, who is going to pay for it and who will or won’t be covered. And discussions of cost almost always refer to the cost of insurance premiums. That’s a mistake because insurance premiums are only a symptom of the actual cost of care, and if we do not address that escalating cost, we will never solve the problem of increasing premiums.

One thing that the ACA (also known as “Obamacare”) gave us was pricing transparency in the individual and small to mid-size group insurance markets. Insurance companies cannot raise rates until they have shown state regulators that they have paid out in benefits 80 to 85 percent of the premiums they took in. Premiums are going up because insurers are paying out more.

Rarely does anyone buy something expensive, or receive expensive services, without knowing what it costs. Yet in health care it happens millions of times every day.

As I have previously discussed (Maine Voices, Dec. 17, 2015), few people are aware that the competing drugs Humira and Enbrel, each made by a different company to treat psoriasis, psoriatic arthritis and related conditions, are each priced at $55,000 a year (drug pricing via goodrx.com). In 2014, they each cost $34,000 a year. What reasonable explanation exists for already-expensive drugs to have gradual and simultaneous $21,000 price increases along with almost-identical pricing? And now Humira and Enbrel have more competitors, since the drugs Taltz and Cosentyx were recently approved.

Normally competition like this is a good thing for the consumer, but unfortunately it doesn’t do for drugs what it does in the car industry. Taltz and Cosentyx are priced, respectively, at $176,000 and $211,000 a year.

Along the same lines: Car companies always put their pricing and monthly cost information in their ads. I recently saw an ad for the Mercedes-Benz C3. You could lease 31 of these for the cost of Cosentyx. I did the math: You could have a different C3 for every day of the month. Just imagine how quickly drug prices would come down if they had in their ads: “Available at Rx Drugs for $211,000.” Make them show their pricing. Is that not an idea our elected representatives can run with?

Drugs aren’t the only thing we pay more for as a country. Comparatively speaking, we pay more for virtually everything health care-related than do citizens of any other place in the world. And we can’t afford it anymore.

I am not sure what the end of our health care system will look like, but I am pretty sure if we follow President Trump’s advice to “let Obamacare fail” instead of fixing it, we will see the ultimate collapse get here sooner. And if that really does happen, who can step in to fix the system? I think the only answer is: The federal government. That would be a twisted bit of irony: Obamacare out, single-payer in and Medicare for all. Though it’s not his intent, the president may be on to something.

 

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