New technologies and treatments have caused the cost of large claims to rise. Simultaneously, the development of effective new gene-specific therapies has significantly increased Specialty Rx costs. For example, drugs like Skysona, a gene therapy medication used to slow the progression of neurologic dysfunction in boys 4-17 years of age with early, active cerebral adrenoleukodystrophy (CALD), cost over $3 million dollars per treatment, and health plans are under pressure to cover these costs. This becomes an enormous expense for employers to bear.
These costs will continue to trend in the double digits. In Q4 2022, into Q1 2023, trend rates for specialty prescription drugs are projected to increase by 10% to 12%.
SOURCE: BenefitsPro.com
Such conditions as mentioned above are difficult to deal with. $3,000,000 for a treatment plan seems outrageous especially when it is not a cure. However, CALD is also rare and thus the drug can be used by few people compared with widely used drugs.
Most people would want this treatment covered by their prescription drug plan, but may not realize that even one claim in an employer group will raise all premiums significantly depending on the size of the group.
The question is, how should we deal with these types of medical conditions and the new technology and science to treat them?
WHO FOOTS THE BILL?
QUINNSCOMMENTARY 
The idiots in 2010 decided that employers who sponsor health plans and participants in those plans should shoulder these costs when they removed annual and lifetime limits on health benefits as well as set maximum deductible/point of purchase cost sharing.
Solution:
The best funding solution for health care is one that mimics the best preparation for running a race in cold weather – layers, covers for the head and hands.
There should be some individual responsibility – but, like auto insurance, the individual responsibility should not be a function of wages, or take home pay, household income, etc. The price tag for other services isn’t set based on your income, same should be true for health care.
Where employers voluntarily offer coverage, there should be a limit on their financial exposure – that is, there should be some form of stop loss or reinsurance for expenses over an attachment point – say $25,000 a year per person. Very few Americans (< 5%) spend $25,000 or more in any year on health care.
To make that stop loss or reinsurance affordable, it must apply to all American citizens and those who are lawfully present. This means that each individual who does not have individual, employer-sponsored coverage, Veterans, Medicaid, or Medicare, must self-insure for up to $25,000 a year in expenses. And, for all who self-insure and all who have medical coverage (individual, employer-sponsored, Veterans, Medicaid, Medicare, etc.), the stop loss / reinsurance should be funded with a dollar amount per capita income tax. To make the stop loss / reinsurance affordable, it should cap reimbursements at either Medicare-allowable, or Medicaid levels. Yes, that means that provider reimbursements are limited once an individual incurs spend in excess of $25,000 in any one year.
The solution described above was my 2008 proposal for Health Reform. It is still superior to the Patient Protection and Affordable Care Act of 2010 (PPACA, Obamacare). Interestingly, a state could still adopt this today if the federal government would approve it – per some specific "waiver" provisions that are a part of PPACA.
That is, unlike the stupid Republicans who suggested "repeal and replace", the better option, when they controlled the Senate, House and White House, was to approve state reform proposals.
I am willing to live with CMS/HHS decisions on what Medicare should cover – and they would recognize that there is no free lunch, that the cost of any super expensive treatment would ultimately be born by all citizens and others lawfully present in the US.
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Pembrolisumab (Keytruda) for lung cancer. $35,000 per infusion, once every 6 weeks for two years. Life expectancy (average) without* , 16 weeks. With, 38 months.
If I had to pay out of pocket (impossible, anyway), I would pass. The key, “average life expectancy “. Individuals could be 16 weeks or 16 years.
Medicare pays… our life savings will stay with my wife… count me in!
This is a moral question? Also, part of a long term study, if that makes me feel less guilty?
Just went over 38 months. So far, so good.
*Some people can’t tolerate the side effects.
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Before the pandemic, there was a drug on TV that advertised that it extended your life by an average of 6 months for some rare disease. So, I looked it up and it costed $500,000 for six more months. I have no ideal what the quality of life is for that patient during those extra 6 months. It took me 17 years out of high school to make that kind of money. How could my life ever be worth that much to society when society doesn’t even value my labor that much? I wasn’t going to live and solve cancer or broker world peace.
At the same time, I also cannot deny new parents needing help with a baby in a NICU. May be that child will grow up to solve cancer.
I look back to the 1980’s and many new experimental drugs for AIDS (HIV) came out and only the rich could afford them. Over time and since the disease affected millions, the cost of those treatments came down and some of those people who were infected in the 1980’s are still alive today.
This is a moral question.
How many people must be sick with a disease to justify burdening the rest of society with the cost and care? If you let the government take care of these treatments it will become a blank check and costs will skyrocket and financially hurt healthy people by increasing their taxes. Will the government limit access to treatments if they have to pay just as insurance companies want to limit access to control costs? Or will we become just like Canada and start encouraging euthanasia?
Why do we believe that we must live forever no matter what the costs? Is this a result of believing Big Pharma can make you immortal? My father got a heart valve replacement at age 78. It bought him 3 more months of being in bed. But Medicare paid the bill. Is this what we want?
Nobody wins in the game of life. We all die at the end. It is how we play the game that enriches the world not how we enrich ourselves that matters.
I have no answers to who should pay or how much. Nor do I know how much more I can afford to pay but I suspect it is more than I am willing to admit. But then again , I am not willing to pay out of my own pocket for my own healthcare because I am always looking for the cheapest options when I can.
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I understand your quandary over this issue and there are many factors to consider. My thinking is that not every experimental treatment need be paid for and not every treatment need be paid for that will stretch life for 6 months. We all need to figure on going with palliative care and not plan on fighting to the bitter end while bedridden in the ICU being pumped full of God knows what. Many times people have exhausted their life span and may have dementia or other medical conditions that will take them out sooner than later. I wouldn’t say pay 3 million for an experimental treatment for them.
But my thinking is that a plan to pay big costs on a societal basis is doable in a country that can pay many billions to kill people around the globe. We have money to build sports stadiums for a handful of games every year. Billions of taxpayer dollars are spent in that way. I never voted for any of that spending but it’s there anyway. So let’s ante for some kids and adults too who may need help living a normal or near normal life.
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I had never heard of the condition mentioned not the treatment. The cost seems enormous but for what is limited use, may be normal. The question of who pays, I would propose, would be the federal government, channeled through CHIP since this is a condition affecting children. The eligibility could be opened for all, regardless of other insurance, since this is an astronomical sum for any parent or company health plan to swallow.
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I agree. The treatments for so- called orphan diseases aren’t going be pharma money makers. If the drug works for a reasonable amount of time, the entire society should pay.
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