You’ve probably heard some of their stories. People are dying because they can’t afford insulin. Thousands more are risking serious harm by skipping doses.
 
Incredibly, many of these people have health insurance.
 
How can that be? One big reason: Most insurance companies overcharge their members for insulin and other prescription drugs.
 
I used to work for one of those companies—Blue Shield of California. Here’s how the companies overcharge.
 
When insurers agree to cover specific brand name drugs, including insulin, they negotiate rebates to the insurer from the pharmaceutical companies. For insulin, the rebates average 70%. But when insurers calculate your cost-sharing payments, most base it off the full list price, not the after-rebate price they pay.
 
So if the list price for a particular brand of insulin is $400 a month and the after-rebate cost to your insurer is $120, they’ll charge you $400. If you’ve met your deductible and your co-insurance is 20%, they’ll charge you $80 instead of $24.
 
This practice is so clearly immoral that two of the biggest insurance companies, Aetna and UnitedHealthcare, have voluntarily stopped doing it. They now base member cost-sharing for insulin and other drugs on the discounted cost to the insurer, not the list price.
 
But Blue Cross Blue Shield insurers (except for BCBS of North Carolina) continue to overcharge. The only reason they get away with it is that so few people know about it. With some public exposure and pressure, we can get them to do the right thing too.
 
To end the insulin affordability crisis, we have to change how pharmaceutical companies and insurers behave.
 
Blue Cross Blue Shield: Stop overcharging for insulin and other drugs, and instead base member cost-sharing on the actual costs of drugs.