- The eye-glazing scam of Medicare drug plans: Six tiers and none of them mean a fucking thing.
- Hey look at this: Delights to delectate.
- This day in history: 2012, 2017, 2021
- Colophon: Recent publications, upcoming/recent appearances, current writing projects, current reading
The eye-glazing scam of Medicare drug plans (permalink)
CORRECTION: An earlier version of this article erroneously claimed Simon Lovell had passed away; I misremembered my contribution to a 2015 medical fundraiser for Mr Lovell as a contribution to a funeral expenses fundraiser. My sincere apologies to Mr Lovell (and I'm delighted to learn I was wrong!).
Indie bookstores can change your life. In 2007, I wandered into NYC's St Marks' Bookstore (RIP) and picked up a book from the recommended table: "How to Cheat at Everything," by Simon Lovell, and I learned how to spot a scam. It's a skill I use every day, especially when analyzing how corporate America works the US government:
I grew up in countries – Canada, the UK – with universal health care and now I live in the US. The NHS and OHIP aren't perfect, but neither set off my scam-meter the way that the American system does. The whole thing is a scam, top to bottom.
Here's a key lesson from Lovell's book: "complexity in a proposition bet is only there to make it harder for you to figure out the odds." In other words, if a grifter at a bar tells you that they'll pay you 3:1 if you can do X, and 5:1 if you can do Y, and 9:1 if you can do X and Y, all of those different payouts are solely there to confuse you.
If you want to see this in action, just visit any casino and ask a croupier to explain the craps payout lines to you, and try to do the odds in your head while you get that explanation. What's the least-worst bet on the craps table? (There are no good bets on a craps table). Without a spreadsheet and several hours of analysis, you probably can't know.
The flamboyant, mind-clouding complexity in US health care starts with health insurance. Insurance, after all, is just a proposition bet: "If you contract this illness, we pay this much; if you need this drug, we pay this much. Pay an extra $20/month, and we'll reduce your co-pay by this much, but only once you've covered your deductible. Pay $3/month more and your deductible goes down by this much. Oh, and here's your HSA, which will accrue tax-free savings you can use for some of this. What's a dollar worth before tax? Sorry, that's another spreadsheet."
You'd think that government health insurance – Medicare and Medicaid – would be immune to this kind of gamesmanship, but you'd be wrong. When you become Medicare-eligible, you still need to buy a drug plan. Those drug plans are provided via private-sector companies like Humana. They are a scam.
Twice a year, Medicare has an "open enrollment" period, just like other US insurers. During open enrollment, you are encouraged to use the Medicare Plan Finder to sort through all the different plans. You feed in your prescriptions, it pops out a recommendation. You can even talk it over with a trusted broker before you pick. It feels like a straightforward transaction, but it's still a scam.
Here's how the scam works. Remember that you can only change plans twice a year. Given that, you've likely assumed that once you choose a plan, its rates remain constant for that duration: if you agree to pay $X for your prescriptions from January to June, then the pharma plan operator is agreeing only to charge you $X over that period, right?
Wrong. As Susan Jaffe writes for Kaiser Health News, even though you guarantee that you will use your pharma plan provider for the next six months, your pharma plan provider makes no guarantees to you about how much that will cost you.
Jaffe opens with the story of retired construction accountant Linda Griffith, who signed up for a Humana plan last December that promised her a $70.09 co-pay for her monthly prescription, but when the plan kicked in a month later, Humana cranked the price up to $275.90.
This isn't an anomaly. As an AARP study found, the pharma plan providers routinely lower their payouts to something close to list-price just before open enrollment, so that the plan-shopping tools show that they're a good deal, then, as soon as the open enrollment closes and patients are locked in, they crank the prices up.
These companies will tell you that they're bargaining hard with the pharma companies to get prices down, and they are, but only so that they can shift a larger proportion of the scam's winnings from pharma, to pharma benefit managers, to insurers. You don't share in the bounty. You are the bounty.
For decades, Democrats have been campaigning to repeal the law that prohibits Medicare from directly negotiating with pharma companies, but they've failed – thanks to Republicans, and thanks to sellouts in the Democratic caucus, like Cory Booker, who says he's not going to let his pharma industry donors dictate his votes anymore:
Meanwhile, the scammers continue to add complexity to the proposition bet and use the obscuring effect of all those bizarre odds to cloud our ability to calculate the odds. Some drug plans have six tiers of benefits, each with their own co-pay (a flat fee per prescription) and/or co-insurance (a percentage of the drug price). Sometimes it's cheaper not to use your insurance to buy drugs at all, because the cash price is lower than the co-pay.
There is no amount of plan-tinkering that can substitute for allowing Medicare to directly negotiate with pharma companies and set a price, the way all the other national health-care plans do. There's a reason Americans pay 200-400% more for their prescriptions than Canadians.
An insurance plan that you can't change, but the insurer can? That is a scam that's visible from orbit. Any insurer that does this is permanently disqualified from being trusted with anyone's health. It doesn't matter how many tiers are offered, or how many rebates, or what the co-pay is. It doesn't matter how many price-comparison tools there are. If the insurer can change the payout at will and you can't change insurers when they do, all of that stuff is just window-dressing, lines on the craps table, there to distract you while you're ripped off.
(Image: Chris Martin, CC BY 2.0, modified; Christine Dela Cerna, CC BY-SA 3.0, modified)
Hey look at this (permalink)
- Google Voice "bug" requires everyone in the house to pay separately for streaming services https://www.washingtonpost.com/technology/2022/05/02/google-assistant-voice-match/
Six Weeks Is A Long Time https://locusmag.com/2022/05/cory-doctorow-six-weeks-is-a-long-time/
Simone Giertz's Screw Ring https://yetch.store/products/screw-ring
This day in history (permalink)
#10yrsago Chris Dodd’s imaginary topsy-turvy history of Hollywood https://www.techdirt.com/2012/05/03/chris-dodd-rewrites-hollywoods-history-to-pretend-that-it-came-about-because-ip-laws/
#10yrsago Court records unsealed for dajaz1.com seizure, reveal that US Customs operated as hired thugs for the RIAA https://www.eff.org/deeplinks/2012/05/unsealed-court-records-confirm-riaa-delays-were-behind-year-long-seizure-hip-hop
#5yrsago Weaponized narrative: the stories we tell change our theories about the world https://locusmag.com/2017/05/cory-doctorow-weaponized-narrative/
#1yrago Qualia: How Law & Econ pulled a qualitative bait-and-switch https://pluralistic.net/2021/05/04/law-and-con/#law-n-econ
#1yrago Whales decry the casino economy: It's the high rollers you gotta watch out for https://pluralistic.net/2021/05/04/law-and-con/#all-bets-are-off
Today's top sources: Naked Capitalism (https://www.nakedcapitalism.com/).
- Picks and Shovels, a Martin Hench noir thriller about the heroic era of the PC. Yesterday's progress: 544 words (90817 words total).
A Little Brother short story about DIY insulin PLANNING
Vigilant, Little Brother short story about remote invigilation. FIRST DRAFT COMPLETE, WAITING FOR EXPERT REVIEW
Moral Hazard, a short story for MIT Tech Review's 12 Tomorrows. FIRST DRAFT COMPLETE, ACCEPTED FOR PUBLICATION
Spill, a Little Brother short story about pipeline protests. FINAL DRAFT COMPLETE
A post-GND utopian novel, "The Lost Cause." FINISHED
A cyberpunk noir thriller novel, "Red Team Blues." FINISHED
Currently reading: Analogia by George Dyson.
Latest podcast: Revenge Of The Chickenized Reverse Centaurs
- Demicon 33 (Des Moines), May 6-8
The Sci-Fi Feedback Loop: Mapping Fiction’s Influence on Real-World Tech (Arizona State University Center for Science and the Imagination), May 12
OpenJSWorld Keynote (Austin), Jun 8
UK Competition and Markets Authority Data Technology and Analytics conference (London), Jun 15-16
A New HOPE (NYC), Jul 22-24
- A Little Patience and a Lot of Tape (This Week in Tech)
Blockchain, Crypto & Web3 (Life Itself podcast)
Launch for Jennifer Egan's "Candy House" (Vancouver Public Library)
- "Attack Surface": The third Little Brother novel, a standalone technothriller for adults. The Washington Post called it "a political cyberthriller, vigorous, bold and savvy about the limits of revolution and resistance." Order signed, personalized copies from Dark Delicacies https://www.darkdel.com/store/p1840/Available_Now%3A_Attack_Surface.html
"How to Destroy Surveillance Capitalism": an anti-monopoly pamphlet analyzing the true harms of surveillance capitalism and proposing a solution. https://onezero.medium.com/how-to-destroy-surveillance-capitalism-8135e6744d59 (print edition: https://bookshop.org/books/how-to-destroy-surveillance-capitalism/9781736205907) (signed copies: https://www.darkdel.com/store/p2024/Available_Now%3A__How_to_Destroy_Surveillance_Capitalism.html)
"Little Brother/Homeland": A reissue omnibus edition with a new introduction by Edward Snowden: https://us.macmillan.com/books/9781250774583; personalized/signed copies here: https://www.darkdel.com/store/p1750/July%3A__Little_Brother_%26_Homeland.html
"Poesy the Monster Slayer" a picture book about monsters, bedtime, gender, and kicking ass. Order here: https://us.macmillan.com/books/9781626723627. Get a personalized, signed copy here: https://www.darkdel.com/store/p1562/_Poesy_the_Monster_Slayer.html.
- Chokepoint Capitalism: How to Beat Big Tech, Tame Big Content, and Get Artists Paid, with Rebecca Giblin, nonfiction/business/politics, Beacon Press, September 2022
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