You’ve heard this conservative theory time and again: Poor people are driving up the cost of health care by using too much of it.
Here’s how the conservative story goes. Medicaid needs to be reformed to make the poor “pay” for more of their care. If these people had “skin in the game,” if they had to pay for more of the cost, they wouldn’t use so damn much health care.
Right now, Medicaid includes co-pays for many services, but that’s not enough, the GOPers chant. Let’s “reform” Medicaid by making people pay more for their services. Even though Medicaid represents only a fraction (16%) of the health care market, they’d like us to believe that making the poor have some “skin in the game” will drive down the cost of health care for everyone.
But this theory doesn’t pan out in real life, as TIME columnist Stephen Brill explained on the Daily Show this week.
Brill tells the story of a man who had to pay–up front in cash–$13,700 for the infusion of a cancer drug. He didn’t have any choice, he needed the medicine to live and the government had awarded a monopoly patent to one pharmaceutical company. This drug was part of an $83,000 up front bill he had to pay before private insurance would be billed–just for the initial treatment. That drug cost the drug company $300. The CEO makes over $11 million dollars.
Now let’s apply the Republican argument to this man’s story. Republicans will say, Stephen Brill explains, if this man had skin in the game, letting him know how much he he is paying for the cancer drug and making him pay too will help. This way, the GOPers say, he can be a smarter consumer and maybe get that drug somewhere else.
But recall that the drug company has a monopoly patent on the drug. The guy has no choice over whether or not to buy the drug. If he doesn’t take it, he dies. And the U.S. doesn’t allow lower priced prescription drugs from other countries like Canada to be imported, like Schweitzer has proposed. The drug still costs $13,000, and the Affordable care Act hasn’t done anything to control those costs or those profits.
This is a guy who had private insurance, not Medicaid. And, Brill reminds us, he had $83,000 worth of “skin in the game.” But when there are monopolies on drugs, there is no free market–and this concept falls on its face. In Montana–and other states too of course–there are also monopolies on hospitals in most towns. There’s only one hospital in town, and the hospital owns most if not all of the doctors–or is buying them up fast. So how is this man supposed to negotiate for lower prices?
Suppose you have one hospital in your town, and you’re an insurance company, how are you supposed to negotiate lower prices? The insurance company has “skin in the game” too–much more than everyone on Medicaid in Montana combined, but that’s not driving down costs.
So when the TEA Party and the Republicans try to make this argument, they must be called on it. Yet they are using this myth to propose and pass “Medicaid reforms” in Arkansas, Iowa, Michigan, and others. If the conservatives aren’t called out for the “skin in the game” myth, the cost of health care is going to remain high, and the only “reform” that will pass in the state legislature is that the poorest Montanans will be saddled with additional bills.
Stephen Brill is the author of “The Bitter Pill: Why Medical Bills are Killing Us” He’s writing a series of columns in TIME on health care, and working on a book about health care costs. You can watch his appearance on the Daily Show here.