Co-Pays Will Disappear (If Only We'll Let Them) - Part 2

We talked about co-pays in terms of prescription medications, however, another area where co-pays could go is for standard procedures at hospitals.  Hospitals charge exorbitant amounts for small procedures such as getting stitches with bills in the thousands.

For those who are insured, insurance covers the vast majority of the cost leaving us a deductible or co-pay.  However, everyone ends up paying this inflated cost as insurance premiums rise to cover the fees.  This is another case where a new model is emerging.

Two friends of ours: Dr. John Muney, founder of AMG Medical Group in New York City and Dr. Vic Wood, founder of Primary Care One in West Virginia & Ohio are innovators in this space.  They offer comprehensive healthcare (almost everything offered in a hospital) for a low flat fee under $100 a month.

Yes, you read correctly.  In fact it's $79 a month for AMG Medical Group and $83 a month for Primary Care One, with NO CO-PAYS.

Both doctors faced uphill battles getting state approval, however, once people saw the benefits of offering truly affordable healthcare, the rest was history.  Dr. Muney says, ""What is happening in the American medical system is 70% of our healthcare cost is not spent on healthcare. It's bureaucracy. People ask me, 'What's the catch?' I say, 'There isn't one.'"

Therein lies the problem:  Here are two doctors with obvious answers to the healthcare debate bringing affordable care within reach of most Americans, but we can't believe it.  We've been trained to believe we must go to hospitals, use our insurance, and pay co-pays.

So, have we convinced you that co-pays are unnecessary?  Probably not, but until American's can get their mind around comprehensive healthcare being as good as any hospital for a flat fee, the co-pay will be alive and well and the status quo will prevail.

Co-Pays Will Disappear (If Only We'll Let Them) - Part 1

We're often asked if we accept insurance for purchasing medications.  This is a great question as most pharmacies charge high enough prices that it makes sense to use insurance.  Insurance can help offset some of the high cost of prescription drugs especially when it comes to brand names.

What happens when the price of the medication is actually below the insurance co-pay?  Such a situation didn't really exist until the $4 prescription drug list came out.  Now many pharmacies offer this program and hence the co-pay maybe on its last legs.

Let's take a common drug like Simvastatin (Generic Zocor) used to control high cholesterol.  Typical insurance co-pays range between $10 - $20 for medications with some going as high as $25.

At typical pharmacy prices, it makes sense to purchase this drug using your insurance since the price of this drug is above $20 for 30 Tablets.  However, when the price is below the co-pay at $3.50 for 30 Tablets, it doesn't make sense to use your insurance.

With insurance, you would pay a minimum of $10 assuming your co-pay is $10.  Paying cash, you would only pay $3.50 saving you $6.50.  The savings is even higher when you purchase higher quantities.

The Simvastatin example will only become more common, as co-pays rise, generic manufacturers get direct access to the consumer, and more retail pharmacies try to match the flat pricing model. 

The word "co-pay" in relation to prescription drugs may finally become obsolete as consumers opt to save money by paying cash rather than use their insurance.  In our opinion, it couldn't happen soon enough especially when people save money on their medications.