As you may have read in part 1, I spent over $8,000 last year with insurance to pay for the diabetes supplies I need to keep me alive. But that excludes what I spent on supplies I didn’t realize were no longer covered until it was too late. How did this happen? In order to understand it, we have to talk about formularies.
What is a formulary?
According to healthcare.gov, a formulary is “a list of prescription drugs covered by a prescription drug plan or another insurance plan offering prescription drug benefits.” Basically, a formulary is whatever the drug company says they’ll cover based on deals they’ve made with pharmaceutical companies. People who don’t rely on lots of medications or take generic medications probably don’t pay much attention to formularies. But for people like me with chronic diseases, formularies and formulary changes can cause major headaches.
What’s so bad about formulary changes?
As a Type 1 diabetic, I regularly check my blood glucose levels – using a handy device called a glucometer – to figure out how much insulin or food I need to stay functional. There are a number of glucometers on the market, and each uses specific “test strips” that you add blood to see your current blood sugar level. Insurance companies choose, many patients would say arbitrarily, which brands they will or will not cover. Why is this a problem?
Because not all medications or supplies are created equal.
Doctors have a reason to write prescriptions for specific medications and supplies, regardless of what insurance companies may prefer. In the case of glucometers, only a third of popular brands met the Diabetes Technology Society’s standards for accuracy. Some, like the ones I switched to last year so the strips would be covered (before they were dropped from my insurance’s formulary), weren’t accurate within 15% over multiple trials. I depend on my blood sugar readings to determine how much insulin to give or sugar to ingest. 15% accuracy can be the difference between being completely fine and having a life-threatening emergency. Glucometers are just one example: For people with chronic diseases, formularies don’t always cover the best medications or supplies for them.
Negotiated prices means that insurance isn’t always saving you money.
Because of pharmacy benefit managers (PBMs), there is a difference between the market price of an item and the price that you pay through insurance. Usually, the price an insured person pays is… more. PBMs act as a third party between insurance companies and pharmaceutical companies, for reasons beyond my understanding (something about rebates). I didn’t realize I’d refilled my test strips out of pocket, rather than by insurance, because the price on my receipt went down. Until I met my insurance’s out-of-pocket yearly maximum and everything should’ve been free, I didn’t even realize I was still being charged. I spent hundreds of dollars, for no reason, that I haven’t been reimbursed for.
Health care in America is complicated. Whatever factors contribute to formulary changes, the bottom line is that insurers don’t have the patient’s best care in mind. New York has taken steps to address issues such as the midyear formulary changes that affected me. But until adequate reform happens, I fear patients like me will be picking up the bill.