This is very, very niche, but I couldn’t think of a more suitable place so I’ll give it a go.
In the US, brand name medications are outrageously priced. There are deals between payors (PBM/Medicare) and manufacturers that look like this:
Sticker price $20,000/mo minus negotiated insurance payment of $15,000 theoretically leaves pt on the hook for $5.000/mo, BUT…
Manufacturer graciously offers a “coupon” / discount card, which covers a max of $4,995.00, leaving pt with a net responsibility of $5.00/month.
These are convenient numbers to work with, but closely resemble the pricing and coverage structure of a long-term medication I take.
The coupon never results in zero pt responsibility, always leaving some negligible amount due. Invariably, it’s exactly enough money to be a huge pain in everyone’s ass and to make no meaningful difference to anyone involved in the transaction. $5.00 and $9.00 are amounts I see frequently.
Getting to the actual question, why bother?
Seriously, I wasted a half hour of my life waiting on hold to schedule a refill on a specialty med that can only be filled from a single central pharmacy and shipped, to be told that a) they somehow didn’t charge card on file for the $5.00 last month, and b) can’t schedule next shipment until I pay the all-important five bucks. Didn’t have a card close at hand, had to call back later so they could extract their couple dollars and then schedule the next round.
It literally costs them more in toll free charges, infrastructure fixed costs, and salaries to collect that money than they make from it.
I assume the answer is something along the lines of “personal responsibility” and someone in Congress having a stroke over the idea of someone getting medicine for “free,” but I’ve been unable to substantiate that.
Convinced there is a reason, probably buried in a 10,000 page CMS policy manual, because the mfg coupon literally never brings the price to zero. See, e.g., DTC drug commercials referencing “pay as little as $x a month!”
The reason is because it supposedly creates a moral hazard. This is the logic behind pricing for all sorts of medical resources (such as co-pays and deductibles). If there is a nominal cost involved to obtain the resource, then you will be incentivised not to use more than you need. But if it is free or costs too little, then you (and others) may choose to use a lot of the resource, far more than you actually need.
For example, suppose there is a $50 co-pay (a co-pay is essentially a fee) to see the doctor, and you figure you should go once a year for a check-up. In this case, you will not schedule an excessive number of appointments because you know it is not necessary and it will cost you money each time you do. If scheduling doctor’s appointments were free or costs very little, like $1, you may instead choose to schedule two or three appointments per year, because why not? Or maybe you will go see the doctor for every minor cold or stuffy nose. It’s not like it will cost you a significant amount of money. Or so their thinking goes, anyway.
Remember, the $50 you pay isn’t all that it costs. For every $50 you pay, the insurance company is probably paying the doctor $150.
Similarly, suppose a drug costs $100, but the insurance company pays $90, and you have to pay a $10 co-pay. You buy one vial, which is good for one month. The fear is that if the insurance company pays for all $100, since the drug is now free for you, you might decide to get two vials instead, just in case. After all, they’re free for you, right? This means the insurance company has to pay $200 for two vials of the drug but the benefit to you is actually pretty small. Again, this is how insurance companies think.
Now, whether this logic is sound or not, I leave that part up to you.