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Why You--yes, You!--should Care About Health Care

Forget the the drug companies, the insurers, and the small business lobby. Forget Bill Kristol, Fox News, and the Republican Party, too. The largest obstacle to creating universal health care is you.

OK, maybe not you personally. But you collectively--i.e., the American people--are a huge political problem.

Yes, polls show people support universal health care in the abstract. They may even say they're willing to pay more taxes for it. But once the debate turns real, they get skittish. Most people, after all, have health insurance already. The possibility of changing that insurance scares them, even if it's likely a change for the better. And so enthusiasm for reform inevitably gets soft, given the opponents of universal health care the political support they need to carry the day.

You can make a pretty good case that, to a great extent, that's what happened in 1993 and 1994, during the fight over the original Clinton health care plan. And you don't have to be a pessimist to imagine the same thing happening in 2009, if--as expected--reformers make another run at it.

That's why it's important for everybody to read stories like the Gina Kolata's front-pager about drug prices in today's New York Times. As Kolata explains, insurers typically classify prescription drugs into groups, or tiers, each one with its own level of cost-sharing. For a drug in the first tier, you might pay just $5 out of your own pocket with insurance covering the rest. For a drug in the second tier, you might have to pay $10. And so on.

Now, it seems, the insurers have introduced a whole new tier--a fourth or fifth tier, depending on the insurer--in which beneficiaries must pay between 25 and 33 percent of the cost out of their own pockets. The drugs in this tier are among the most expensive available. And while nobody knows for sure how many people use these drugs, among the hundreds of drugs that fall into this category are those to treat common, chronic conditions like multiple sclerosis, rheumatoid arthritis, and hemophlilia. Some cancer drugs are on the list, too.

In other words, these are drugs people need to survive. Here's what that means for one such person, Robin Steinwand, a 53-year-old with MS:

In January, shortly after Ms. Steinwand renewed her insurance policy with Kaiser Permanente, she went to refill her prescription for Copaxone. She had been insured with Kaiser for 17 years through her husband, a federal employee, and had had no complaints about the coverage.

She had been taking Copaxone since multiple sclerosis was diagnosed in 2000, buying 30 days’ worth of the pills at a time. And even though the drug costs $1,900 a month, Kaiser required only a $20 co-payment.

Not this time. When Ms. Steinwand went to pick up her prescription at a pharmacy near her home in Silver Spring, Md., the pharmacist handed her a bill for $325. ... Her annual cost would be $3,900 and unless her insurance changed or the drug dropped in price, it would go on for the rest of her life.

“I charged it, then got into my car and burst into tears,” Ms. Steinwand said.

She needed the drug, she said, because it can slow the course of her disease. And she knew she would just have to pay for it, but it would not be easy.

“It’s a tough economic time for everyone,” she said. “My son will start college in a year and a half. We are asking ourselves, can we afford a vacation? Can we continue to save for retirement and college?”

And why would insurers do this to people? Because that's how the market works. Employers have been demanding that insurers find ways to get skyrocketing insurance premiums under control. One of the easiest ways for insurers to do this is to ask the people with the highest medical costs--the very sickest among us--to pay more of their own medical bills.

So what's the alternative? Having the government use some of its bargaining leverage to drive down prices can help, to an extent. But, in the long run, the real solution here is to create an insurance system that doesn't provide financial incentives for shifting costs onto the sick. And the only way to do that is to create a system for everybody, with relatively generous benefits, so that the burden for high medical expenses is spread across the entire population.

On paper, the best plans getting attention on the campaign trail and on Capitol Hill would do this--or, at least, could be made to do this would modest modifications. (More on that some other time.) But this brings us back to the political challenge of universal coverage. No matter what kind of proposal reformers end up supporting, a lot of people will eye it suspiciously--and assume it's worse than what they have already.

Today's Times story is a reminder of how misguided that thinking is. Even Americans with "good" insurance may not have the kind of protection they need in case of severe illness. They may feel secure, but they are just one illness or injury away from serious financial hardship.

Are they willing to take that chance?

Are you?

Update: Over at his American Prospect blog, Ezra Klein makes a very important observation that I completely missed. The Times story doesn't say how insurers are making their decisions about how to scale cost-sharing. If the insurers are using scientific criteria and simply charging more for therapies that are experimental and/or unproven, then it's justified. In fact, to some extent, that's what any insurance system--whether universal or not--is going to do. (I say "to some extent" because it all depends on how much a country wishes to spend on drugs; the more you want to spend, the more experimental/unproven drugs you can afford.) On the other hand, if the insurers are simply looking to off-load costs for the sickest patients--which is what the article implies and which, based on history, is probably the case in many instances--then it's a problem. The fundamental problem here is that we don't know how the insurers make these decisions because they generally don't make them in a public and transparent way. Universal health care systems do that, which is one more reason why they are a good idea.

--Jonathan Cohn