Jeff Swigert: Bill would save families from paying excessive medical costs

Five and a half years ago, while I was in my second year of graduate studies in economics, my wife and I received a phone call on a Tuesday afternoon that shook our world. Life is what happens when you’ve got other plans, as the saying goes, and this phone call would mark the beginning of our family’s battle for our daughters’ breath.

Both of my daughters, Lucy, 5, and Maebel, 2, now suffer from cystic fibrosis, a life-threatening genetic disease that affects the lungs and digestive system. Micquel and I have spent a lot of time over the past five years in hospitals in upstate New York and, since 2016, at Primary Children’s Hospital’s pediatric pulmonary unit, where our girls receive amazing care from medical professionals who we have come to know on a first name basis. They fight with us for our daughters’ health.

I mention this in the spirit of full disclosure, acknowledging that even though I consider my opinion to be founded on objective economic principles, I personally do have a lot of skin in this game. In fact, I’m all in.

Disclaimer aside, everyone should support state Rep. Ray Ward’s Insurance Coverage Modification bill (HB214), currently under consideration in the Utah Legislature. This bill would ban so-called “copay accumulator programs” from being allowed among insurance providers in Utah. CF and other conditions like it that require intense treatments and medications that have no generic alternatives are time- energy- and resource-costly to patients and their families, even beyond the explicit costs shown on medical bills. Copay accumulator programs threaten to make these circumstances even more onerous among groups that are roughed up by drawing the short straw in several respects as it is.

In absence of the measures proposed in this bill, insurance companies are effectively allowed to add insult to injury (quite literally) by limiting the degree to which outside assistance programs can help families in defraying the costs associated with their health problems.

While I understand the need to control costs in an industry that frequently records losses, copay accumulator plans aren’t the way to do it. Even if there were a legitimate argument for the welfare benefits to other plan holders, in terms of reduced premiums, these savings won’t likely be realized by policyholders, as health insurance is a uniquely imperfect market with too few competitive forces to lead to this kind of efficient outcome.

Insurance ostensibly exists to distribute risk across members of the insured pool. Information kills insurance. (see recent Nobel Laureates Abijit Banerjee and Esther Duflo’s new book, “Good Economics for Hard Times” for an in-depth analysis of why this is the case.) Copay accumulator programs essentially provide an implicit means of making less-fortunate members of the plan reveal themselves and pay higher costs — rather than getting medical professionals to be more judicious and cost-sensitive in their prescription practices, as intended.

Patients with conditions like my daughters’ rely on cutting edge prescription drugs that have no less-expensive generic alternatives. Copay accumulation plans nullify the efforts of pharmaceutical companies and medical professionals to make these drugs affordable through copay assistance and coupon programs (where drug companies front some of the expenses of these drugs on behalf of the patient). Let’s not tie the hands of doctors by limiting treatment options. Let’s not exacerbate medical expense induced financial distress faced by patients and their families.

Copay accumulation programs should be banned and HB214 should be passed. Not supporting this bill would be a tacit endorsement of discrimination against people who systematically suffer from more acute conditions based on things outside their control, something that seems to run counter both to human decency and the definition of insurance. Tell your legislative representatives to vote yes on HB214.

Jeffrey Swigert, Ph.D., is a health economist at Southern Utah University, where he teaches and co-directs the Health Education Action Lab. He is also the father of three children, two of whom, Lucy and Maebel, suffer from cystic fibrosis.