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Health economist Devin Herrick joins AnneMarie Schieber to break down the fight over Obamacare subsidies behind the government shutdown, what happens if they expire, and how free-market reforms could reshape health care—from $2 million drugs to Costco’s new Ozempic plan.
Creators and Guests
Host
AnneMarie Schieber
AnneMarie Schieber brings decades of experience as an investigative news reporter to the forefront as host of Health Care News from The Heartland Institute. Along with hosting the podcast, Schieber is the managing editor of Health Care News, Heartland's monthly newspaper for health care reform. Before her work in the liberty movement, Schieber spent several decades at television stations in Michigan, Minnesota, New York and Pennsylvania. The Associated Press awarded her the top honor of "Best Individual Reporting" for being the first reporter to call attention to government efforts to subsidize spending by increasing automobile fines, typically on low-income motorists.
What is Health Care News Podcast?
The Heartland Institute podcast featuring libertarian and conservative health care scholars who are working to put power back into the hands of patients and doctors, and away from government bureaucrats.
Hello, everyone, and welcome to the Heartland Daily Podcast where the focus today is on health care as we do a couple of times each month. My name is Ann Marie Sheber. I'm the managing editor of Health Care News, and joining me once again is Devin Herrick. He is the health care economist who posts on the Goodman Institute health care blog. Good to see you again, Devin.
Devon Herrick:It's good to be here.
AnneMarie Schieber:We we've got a lot to talk about. The government has shut down, if you noticed. It's been about a week. You know, the reason the government has shut down is because congress cannot agree on the terms to provide stopgap funding until November. This is when both political parties hold each other hostage for policy gains, I guess.
AnneMarie Schieber:The policy grab this time, drumbeat, is health care. The bottom line, the Democrats will not agree to approve to approve a funding bill unless the Republicans agree to continue subsidizing Obamacare at COVID nineteen levels. Okay? Huge increases in subsidies. Those subsidies expire at the end of the year, and Republicans say that this is a separate issue and should not be part of a continuing resolution.
AnneMarie Schieber:Couple of things. I wanna discuss this is gonna take up much of our discussion today. What is going to happen if the Obamacare subsidies go away? And I wanna focus our discussion on what's the best case scenario and what is the most likely scenario. Devin, you posted on this stalemate on October 1.
AnneMarie Schieber:I wanna read something from this blog, and then I wanna hear your your thoughts on this. You wrote Obamacare is a bad deal regardless of who is paying the tab, and taxpayers subsidizing a bad deal to make it affordable distorts the market further and delays needed reform. The reality is ACA marketplace plans are beneficial for less than 10% of those who have them. Can you explain what that means?
Devon Herrick:Well, in health care, there is what's known as a as an eighty twenty rule. And that is this about 20% of the population accounts of the insured population accounts for about 80% of spending. And so by that measure and oh, and then there was another estimate. I think it was from, oh, the Commonwealth Fund. That something like 80 to 90% of Obamacare enrollees do not surpass their deductible, which means they might as well be paying, you know, cash out of pocket.
Devon Herrick:The insurance is doing them, you know, really no good. I mean, yeah, we can argue you have some level of protection. We don't I mean, I don't want my house insurance to pay off with a hailstorm or a fire. But at the same time, I mean, my Obamacare coverage is about double what all my other insurances put together. And so what Obamacare tried to do, and this has been tried before and it always had the same result, which is very high premiums, is Obamacare tried to force 90% of the population, according to statistics, to overpay for health insurance so that the, you know, the less healthy 10% or or 20% gets a good deal.
Devon Herrick:And it it's not an effective or efficient way really to to cross subsidize the sick. It would be, you know, more efficient to have a more direct subsidy because then the people who are relatively healthy would not have an incentive to bail out. So, I mean, it was a bad deal by design. It had been tried in states like New York, New Jersey, I think Washington State, couple others, maybe Connecticut. I don't remember exactly.
Devon Herrick:And it the results were known. It's like, yeah. It provides coverage where you can buy in without having to be risk rated, but it's also causes high premiums. Right. At the time, we already had a high risk pool, and the only complaint about the high risk pool was, well, it has high premiums.
Devon Herrick:Okay. Obamacare is worse.
AnneMarie Schieber:Right. And what you're saying is in 02/2010, we knew how this was gonna fall out because other states have tried similar programs, and it just the numbers just didn't add up. But we went full force with it and forced it on the entire country. I wanna talk about a couple things. First, I wanna ask you, maybe this is a good time to bring this point up.
AnneMarie Schieber:But in your blog, I thought you mentioned that this is gonna be the end to $2,000,000 a year drugs. Now believe it or not, they do exist. Right? These are for rare illnesses and orphan illnesses, and that's a whole different discussion because that is a real problem, and we've gotta figure out a way to help those people. But the way this goes right now is nobody sees any bill.
AnneMarie Schieber:They don't pay anything directly. So when you say we've got a drug and it's gonna cost you a million, 2 doll millions a year and somebody else is gonna pay for it, what are you gonna say? You're gonna say, yeah. I'll go for it. You know?
AnneMarie Schieber:I don't care if it doesn't work. I don't care if maybe even I get harmed by it because I have really no financial stake in this to really evaluate. Tell you wanna talk a little bit more about that?
Devon Herrick:Yeah. The one of the other costly regulations that was imposed on, you know, by Obamacare is it banned all annual caps and lifetime caps on benefits. Before 02/2010, you know, you could pick and choose, you know, what coverage or how much coverage do you want. If you want low deductibles with $5,000,000 coverage, well, you could get that through Blue Cross. It was not cheap.
Devon Herrick:It was rather expensive. That was a premium plan. Well, when they were devising Obamacare, people thought, oh, you know, the Democrats primarily thought, oh, it's horrible that some people rent very, very few people, max out their benefits. So they banned any kind of limits. Well, when you ban a limit, you essentially, a, you increase the price because the risk has gone up, but you create an incentive for those that sell treatments, you know, like, mainly drug companies and hospitals and the like.
Devon Herrick:Well, the sky becomes the limit because there's automatically a market. So you have no nothing to hold prices in check when you basically give a blank check to those that are providing care.
AnneMarie Schieber:I'll tell you what. I think this is going to be the beginning of the end of Obamacare. You know, we tried to do this in 2017 and it fell short. A couple of votes were added again. If the political will is there and that's a big if, you know, if members of congress can resist the strong arming of big hospitals and big insurance.
AnneMarie Schieber:Let let's talk about how this can this could be a war of attrition that Obamacare is going to find a natural death. Andy, I I've I've got a lot to talk about. So are you able to pop up that graph? Because I wanna go over some of these points and then hear your thoughts on them, Devin. You know, the first one is premiums would certainly so let's say the subsidies do not go through.
AnneMarie Schieber:Premiums would certainly go up. Right? Healthy people would go without insurance. They would say, I'm not bothering with this. I'm not paying $17,000 a year for a plan I'm never gonna use.
AnneMarie Schieber:And, you know, they could sign on to alternatives, like short term plans, which Trump now is trying to unleash. They were restricted under the Biden administration, but now Trump says he's not going to enforce those rules and perhaps there will be a, know, a number of companies offering those short term plans for longer period of times. They could also go to health care ministries, which are a lot cheaper than Obamacare plans. The other thing about people is that they would be more vigilant about their health. They will I don't know.
AnneMarie Schieber:Do we have that graphic? Oh, great. See, life will go on. Alright? This is what's gonna happen.
AnneMarie Schieber:People are going to figure out a way around Obamacare. They would be more vigilant about their health. They would scrutinize treatment recommendations for effectiveness and safety. Everything has a risk and sometimes overtreatment or incorrect treatment creates even more problems. There will be pressure on lawmakers to open the gate on indemnity style health insurance plans.
AnneMarie Schieber:Right now, these plans are offered as supplemental plans, not primary care or not primary plans. Imagine picking up a health insurance policy in your twenties with a cap on the benefit amount over a particular period, let's say, twenty or thirty years, similar to, like, how a term insurance policy would work. And you say, I'm gonna buy this plan, and you have an incentive not to get out of it because you're gonna have to be rewritten. So you have a strong incentive to pay that premium every year for the entire term of that plan. And the insurance company will not lose money because you know they know you're going to pay, and you're probably gonna be more vigilant about your health, and they won't have to pay out this big chunk of change.
AnneMarie Schieber:I think hospitals and nonprofit organizations will provide charity care like they did in the past before Obamacare. You know, they get tax benefits because of their nonprofit status. I think it's some communities. I know this goes on in my community. They don't pay property tax, and that competes with other people, who are maybe trying to do an independent route of health care because they gotta pay the property tax, and it also dries up real estate prices.
AnneMarie Schieber:In my backyard, there the hospital construction and expansion is unbelievable. They've created a city since probably in the last ten years. You go down and every new construction building is part of a hospital. I mean, are we that sick? It's just stunning.
AnneMarie Schieber:Like, where is this money coming from? We wouldn't see multimillion dollar packages for CEOs. Some of them are paid $1,010,000,000 dollars a year. And what are they rewarded for? They're figuring out the best way to squeeze more money out of taxpayers.
AnneMarie Schieber:Right? Pretty much. Yeah. With no subsidies, the ACA marketplace yeah. What what'll happen is with no subsidies, the ACA marketplace will fall apart.
AnneMarie Schieber:No one's gonna buy these plans if they're too expensive and insurance companies are wanna get are gonna wanna get out of it because they're not gonna be stuck with, you know, the the 20% because they just couldn't make it work. I mean, we can rest assure that and and we can also rest assure that there will be no backdoor funding for illegal immigrant health care, abortion, trans procedures. These are three three things that people have a lot of moral objection to, and they are paid for under Obamacare. The discussions I've heard about Obamacare subsidies is that's the big thing right now going on because that's what's funding these these programs, legal health care, legal immigrant health care, abortion pills, and the trans procedures because these plans, the Obamacare plans have to cover these things. And, you know, we know with the three forty b program, a lot of those drugs coming in involving trans procedures and abortion, they're all coming through Obamacare plans.
AnneMarie Schieber:So, you know, if these things fall apart, that industry those industries would probably have to compete, you know, on their merits, and they could probably also fall apart as well. What what is your thinking, Devin?
Devon Herrick:Well, I just lost my camera for some reason. I have to.
AnneMarie Schieber:We can hear your voice.
Devon Herrick:Oh, okay. Yeah. Sure. Sure. You won't see my face.
Devon Herrick:But
AnneMarie Schieber:Alright. Well, I'll tell you what. While you're talking, I wanna pop up something. Well, let me just tell you what I we'll talk about what I think is going to happen, what we think is gonna happen. Maybe we can pop up yeah.
AnneMarie Schieber:There's a lot to discuss. I wanna pop up this a couple of
Devon Herrick:Let's fix the camera first, then we'll then we'll go back. This is getting confusing.
AnneMarie Schieber:Alright. Should we That's okay. A choice here in the recording? Can you edit it?
Devon Herrick:Yes. Let me do that now.
AnneMarie Schieber:So, Devin, what's your thinking on this?
Devon Herrick:Well, if we step back to just oh, I think 2019, there were only about 12,000,000 people enrolled in the marketplace plan. And the reason is because it was a bad value. The only people who thought marketplace plans were a good value were those that were getting big heavy subsidies. The middle class and everyone else, it was just a bad deal. And so what Democrats are really trying to do now is is they saw a doubling of of the number of people to roughly 24, 25,000,000 with a marketplace plan, and they don't wanna give that up no matter what the cost even if the cost is outrageous, about $380,000,000,000 over ten years.
Devon Herrick:But I I think you're correct if, really, all you have to do to reform the market is just allow the market to offer products that consumers want. For example, if you were to allow me to buy a plan that had maybe a million dollar cap or even a $500,000 cap, that would be more than sufficient for probably 98% of the population, and it would be much cheaper to subsidize those 2% that were extremely unhealthy or or, you know, needing a lot of care. And so there's all kinds of market innovations that would occur if you would just allow the market to offer plans. It might be limited benefit plans. It might be, you know, short term plans, indemnity plans.
Devon Herrick:It's just it's just hard to explain how convoluted, how inflationary, and how poorly conceived and designed the Obamacare market plans are. And I I think that, I mean, it would it would be really much healthier for the marketplace to find what people are willing to pay for.
AnneMarie Schieber:Yeah. Andy, maybe this would be a good time to pull up that meme. This was this I thought was pretty funny, if you can do it now. This was in the committee to unleash prosperity. They had a funny meme about Obamacare when it was started.
AnneMarie Schieber:So it's named after president Obama. He was the one behind it. Do we do we have that meme that we can pop up? Alright. Maybe we'll come back to it later.
AnneMarie Schieber:Let's talk about what we think is really gonna happen. Here here's my thinking. I think Republicans are going to agree to a temporary extension of subsidies just to get them past the midterms. And they might set a limit on the subsidies to insurance, to insurers. I think they might demand more flexibility for states to set up reinsurance markets for their residents.
AnneMarie Schieber:That's what's existed. Those are for people with significant disabilities, and that's what existed before Obamacare. So they were great programs. They in my state, they were known as the insurer of last resort, and people got really good care. It was a small percentage of people that really had significant health care needs.
AnneMarie Schieber:But what it did was it put those people in a separate pool and found a separate funding mechanism for them. And then it protected it kept people in the insurance market, and that's how insurance works. You get some people to support it at various points in time. And sometimes you'll be the big user, sometimes you won't. But over time, it stretches out and it makes it feasible for insurance companies.
AnneMarie Schieber:It's really risk protection, and we don't do that. We've we've turned it into a payment plan. I think maybe what we might be able to do also, the Republicans might try to squeeze and get some more movement on HSAs. You know, we got a little bit of movement under the one big beautiful bill. We expanded it to, I think, 10,000,000 people.
AnneMarie Schieber:We might be able to do that for $20,000,000, and maybe we expand HSAs to cover all the plans in Obamacare. Right now, the bronze plan, I think, is the only one or the catastrophic plans. Some of those plans do not allow people to have HSAs.
Devon Herrick:Mhmm.
AnneMarie Schieber:And then, it would be also really great, and I don't know that this would ever happen, is to give that subsidy directly to the enrollee in the form of a tax credit so that they could use it in the following tax year. And I know that's a long stretch, but what and and the insurance companies will go ballistic over it because they think they'll never get their money from the enrollee. But right now, you know, people are applying for these subsidies and basically working through agents who teach them how to game it. And they predict what their income is going to be. And then they the subsidies are given on somebody's, you know, declaration of what their income is going to be.
AnneMarie Schieber:And then I don't know how vigilant they are in making sure that they lived up to that. So it's possible somebody makes $500,000 a year and gets a subsidy to pay for Obamacare. We've got a lot of sloppiness, and I know they tried to, you know, take care of that in the some of the provisions in the one big beautiful bill. What what do you think is gonna happen? Are we gonna keep the government shut down?
AnneMarie Schieber:I mean, November, the clock is ticking. That's like a month and a half away.
Devon Herrick:Well, yeah, I I think you raised an important point, that is this is a good opportunity to negotiate reforms to Obamacare, rather than just rubber stamp. Okay. We'll spend $380,000,000,000 over ten years. You know, we'll get we'll that maybe the Republicans will say we will extend some of the subsidies in return for some marketplace reforms that will make Obamacare, you know, more stable. And I think that that would be the the most logical compromise, I guess.
Devon Herrick:And, you know, how how that'll work? Well, I don't know. Maybe they'll extend the subsidies, but not to families of four earning a $128,000 a year because, you know, that's that's well well in the middle class I mean, upper middle class. Maybe they will have them taper off. You know, there's a variety of things, but we're out of time.
Devon Herrick:It's the only problem. So maybe they can do a stop gap measure for a couple months while they try to agree on some some reforms that will help the market. And I I think, you know, I I I think we're going to talk about some of those in a minute that have been suggested including
AnneMarie Schieber:I wanna point this out. Ovik Roy, who is well known in the free market space for health care, wrote an op ed in the Washington Post. I wonder if we could pull that up. This came out last week, October 1. This would be the Washington Post op ed.
AnneMarie Schieber:We have that there. There we go. Is that it? Yep. I think that's it.
AnneMarie Schieber:Yeah. That's it. So what he said basically is that a bipartisan compromise could end the government shutdown. So maybe Republicans might be smart to get some really good reforms in Obamacare. Use this opportunity.
AnneMarie Schieber:And what he's recommending is, you know, he points out to extend the subsidies would cost taxpayers $350,000,000,000 over the next decade. That is amazingly unbelievable. He said there will be people who will really be out if the subsidies were to expire, and that is gonna cause a political problem even to some people who are kinda neutral, even Republicans. You know? There's a big political concern here that the balance of power could shift in congress if this thing becomes out of goes out of control.
AnneMarie Schieber:He proposes a one to two year extension, includes a premium reduction to young people, and then he wants to put aside $10,000,000,000 for a reinsurance fund for those people with significant illness and disabilities that we talked about. Now I don't know. I don't think the Dems wanna give too much control back to the states. I think they wanna make this idea that the whole thing has to apply for the whole country.
Devon Herrick:Mhmm.
AnneMarie Schieber:And that's how they you know, that's the part of their party mantra. Lower premiums for young people may come at the expense also of pre Medicare folks. Their premiums could go up. So, like, if we made the premiums cheaper for younger people to keep them in Obamacare, somebody's premiums are gonna go up, and so maybe they might drop it. I don't know.
AnneMarie Schieber:Do do you
Devon Herrick:think this is the my worry.
AnneMarie Schieber:Really that the Republicans could take advantage of?
Devon Herrick:I mean, I it'd be interesting to see what the actuaries say about because as as you said, they currently require a a one to three rate ban. In other words, that 22 year old that is not likely to see a doctor for any reason would pay only or I would pay only three times more than that 22 year old. And there's been a lot of discussion that maybe that should be five to one. Yeah. Yeah.
Devon Herrick:Would that raise my premiums? You know, I'd wanna see the numbers. So it's it's you know, I'd rather see a little bit of risk you know, rating for risk than just arbitrarily creating bands you shove people into. But he also mentions as you we've kinda touched on direct funding for preexisting conditions. I mean, like, kinda like a high risk pool, like you said.
Devon Herrick:Yeah. And before we get there, I'd wanna I'd probably wanna allow or reduce the ban on lifetime or annual caps because that would just be a blank check to from the government. You know, it's a subsidy is from taxpayers, and that would also be from taxpayers. We need to look for what would make it more efficient. It's currently not efficient because people are over you know, 80% of the population who wants who enrolls is overcharged so that, you know, 10, maybe 15%, you know, get a better deal.
Devon Herrick:Right. You know, that's not stable because people like me say, you know, what are the odds that I'm going to need, you know, more than $20,000 with the care, which is which is the threshold I would have to pay before I would get any kind of coverage? So Yeah. You know, I'm looking at what is my risk? What is my expected cost?
Devon Herrick:The odds of having more than $20,000 is less than one percent probably.
AnneMarie Schieber:Yeah. I mean, somebody with significant disabilities may not have the lifespan that a healthy person would have. Right? So you're not gonna be paying they're not gonna be covered in a plan that's going to take them to age 100. That may not be realistic.
AnneMarie Schieber:And so they may not you know, those limits may not be all that devastating to them, But I see what you're saying that I, you know, I will tell you I've had personal experience with this with a very sick loved one. And I will tell you straight face, we spent more time in the financial aid office where they mined the insurance policy than we did before a doctor. And what they would do is they'd max out the policy. They'd see what how much they could bill to get away with. And my loved one here was like $4,000,000 before he died.
AnneMarie Schieber:And I I just thought it was stunning. And I think that's why these hospitals, they look at this stuff and they mine the plans. And when there is no limit, they will go for the sky. And that's what we're dealing with right now. I wanna pull up a couple of things here.
AnneMarie Schieber:We'll leave this we could talk about this for hours, but there is an interesting editorial in the Washington Post. Now remember, I don't know if we could pull that up. The publisher of the Washington Post is Jeff Bezos, the founder of Amazon, a pretty successful company. So, you know, Jeff Bezos knows what he's doing. This was on October 5.
AnneMarie Schieber:Do we have that, Andy? Can we pull up that editorial? Alright. So I wanna pull up this op ed or actually an editorial in the Washington Post. The publisher is Jeff Bezos, the founder of Amazon, a pretty successful company.
AnneMarie Schieber:He knows what he's talking about. This was on October 5, and this line in in the editorial said this. The real problem is that Obamacare was never actually affordable. This is how entitlement programs work. Once you habituate people to some generous government handout, they grow dependent on it, and it becomes politically perilous, if not impossible to fully claw it back.
AnneMarie Schieber:Now they're basically saying a statement of fact. They're not recommending that we do claw it back. So I guess there's that in there. The other thing I wanna pull up, I so I thought that was kinda significant coming out of the Washington Post. Mhmm.
AnneMarie Schieber:The other thing is a really funny meme that was, in the committee to unleash prosperity blog post. That's the one there we go. Okay. We told them health care was free. Here's Obama laughing.
AnneMarie Schieber:I thought that was pretty funny. You know, it's 15 out. Obamacare went into effect 02/2014. It took us a couple of years to kind of figure out how this thing was gonna play out. It's now eleven years, and we we know full well that this thing is not working.
AnneMarie Schieber:So time to end it. And I I I don't know. I guess we will see. Alright. Let's move on to our next topic, which is kind of related to Obamacare because, like I mentioned earlier, I have seen an explosion of hospital construction and expansion in my little neck of the woods.
AnneMarie Schieber:And I keep wondering, my goodness, are we getting sicker? Where are these sick people coming from? This was a great little article by the the, American Association, the Association of American Physicians and Surgeons. If we can go down, scroll down to the graphic that they have here, it shows look at this map. Okay.
AnneMarie Schieber:So this is the industry that existed in 1990. And you can see 1990, most of the country, the biggest driver for the economy in states was measuring. Look what it is. This is 02/2013. Okay?
AnneMarie Schieber:So imagine what it's like today. I bet the whole thing is blue. But look at all the blue states, and that's health care. Are we sicker? I mean, my goodness.
AnneMarie Schieber:I know that we have baby boomers, and they're getting older and maybe that's what we're seeing. But my goodness, you know, technology also improves. So we shouldn't see this level of, you know, health care spending in our economy. It just doesn't make sense. We don't see other countries spending money like this on health care.
AnneMarie Schieber:What do you think, Devin?
Devon Herrick:Yeah. Nearly $1 and 5. 20 nearly 20 percent of the economy is now health care. And, I mean, do you really it's it's hard to explain in in terms that people can fathom that, you know, one fifth of our entire national income goes for hospitals and drug companies and doctors. Because the average person, the average worker, let's say, is probably yeah.
Devon Herrick:They're paying for insurance, but they're not going to the doctor ever every week. They're not going to the doctor ever once a month. They're probably going maybe every other month. Some some of that will be well visits. So but, yeah, it is I I looked at this graph before we started, and I thought, you know, good lord.
Devon Herrick:That's the I mean, health care is the is the biggest industry in many states. And and, like you said, it's in my neighborhood. Every hospital has a construction crane. Yeah. And they're adding on and adding on, and new hospitals are going up.
Devon Herrick:You know, I'm in a growing area, so that makes a little bit of sense. But, I mean, where's this money coming from? Well, you know, I can tell you where it's coming from. It's coming from about half from the federal government or federal and state government, and the other half is coming from our wages mostly or our take home pay. And it's and for the average well, you know, one thing I always go back to, for the average worker, if they really understood that about $2,526,000 dollars of their wages is being, you know, diverted for health care that they may not be using much of or they demand control of that money.
Devon Herrick:And that would be better because cross subsidies don't work. They're never efficient, but because it breaks the feedback loop between consumers and producers. You know, you go to your local Kroger, and they know you're price sensitive. They know you might want a premium brand, but you're still price sensitive. In health care, we've broken that link by intentionally creating cross subsidies, and this blue atlas is the result.
AnneMarie Schieber:Yeah. I mean, what we have is a churning economy. We're not producing things. We're taking capital from one sector and moving it to in another to another. That's what a service economy does.
AnneMarie Schieber:You know? And here's the thing. We're spending all this money on health care. We have a shortage of doctors and medical professionals. Most of this money is going to administration and middlemen, and they are not producing anything really except taking the money from one hand and passing it over to another.
AnneMarie Schieber:A churning economy, and that's what we're seeing in health care today. That's why we have six people because that money is not going into health care. It's going into all the regulation compliance, construction, administrators. I mean, my goodness. And that's what happens because you're right.
AnneMarie Schieber:Half that money comes from the government. CEOs are rewarded for figuring out the best ways to get that money. Hospital CEOs, insurance companies have have figured out the best way to get their premium premiums paid by the government. You know, they don't have to go chasing after consumers to pay their premiums. They just get the money directly from the government.
AnneMarie Schieber:So I don't know. I thought that was a very good graphic, and maybe I'd love to see what it looks like today. Let's move on to our final topic. This came out this week. Costco is going to sell Ozempic and Wacobi.
AnneMarie Schieber:These are the fat reduction drugs. And I think this is a really good development because right now, this is direct pay. So Mhmm. They're gonna sell it for $500, which means that perhaps insurance companies and drug plans will say, no. We're not gonna pay for this.
AnneMarie Schieber:You can pay for it. $500 a month is affordable if you value it. And, you know, these drugs, people don't forget. One in eight people have used these drugs in our country. Insurance companies up until this point loved it because, you know, they it was driving people to insurance plants or whatever.
AnneMarie Schieber:But if this coverage drops, imagine what would happen. People would have to evaluate the drug on its merits. This drug has to be taken for a lifetime. That's a lot of money. It's $6,000 a year for a lifetime.
AnneMarie Schieber:And, you know, we how much was it selling for before we had, reports that compound pharmacies were making semaglutides for, like, $200 a month. That was a little more reasonable. But the price to insurers was, like, 950, a thousand dollars, a little over a thousand dollars a month. You know, a couple of other things, $500 a month could really get you you know, you could spend a lot of money. $500 a month, you could join the nicest health care club in the country, go to a nice gym, even hire a personal trainer by get a better diet.
AnneMarie Schieber:And, you know, I think I don't know. What what do you think?
Devon Herrick:Oh, I I agree. It is a great great development. 500 or $4.99 a month is definitely a a discount. Some of these drugs have a list price of, I don't know, like, 1,200, 1,300 a month. So, yeah, that's that's a great deal.
Devon Herrick:But what I don't understand, but I would be curious about because the dosage is very. A morbidly obese individual with diabetes would be on a different dose than someone who's just, you know, needing to lose some weight. And so that you know, I I've written about, you know, money on drugs by, you know, using using your brain. And I'm wondering if you could buy one auto injector that had a large quantity and just microdose it, you know, for some of these just and and make it last more than a month, two months, three months. Yeah.
Devon Herrick:And which is you know, I I think that's probably a better idea for many people is go go at it slowly. Don't hit it all try to hit it all quickly. And and that that touches on another topic, which there's a huge market for regular people that are just thirty pounds overweight, let's say. I mean, they're selling it for 500 for people that are presumably obese or wealthier or vain. Why don't they make it where, you know, ordinary people can microdose for, say, 100 a month?
Devon Herrick:Yeah. There's a huge market there. And maybe that's where they're going. Maybe this is the first step. But but, yeah, I I think it is a huge development, and that'll create competition with couple of the others like Mounjaro, for example.
Devon Herrick:It's a GLP one plus a, I think, PIC. Basically, it has an additional factor that helps metabolize fat and control insulin sensitivity. And so you're seeing more and more competition. So, hopefully, that will translate into more consumer friendly prices and options for a wider audience. But but, yeah, that's that's that's funny.
Devon Herrick:I mean, that's Well it's still expensive, but it's affordable Yeah. To some degree.
AnneMarie Schieber:The price will go down enough because what we do know about losing weight is it's a lifestyle. You have to make significant changes. It's work. It's effort. And the idea that you could take a pill and lose weight effortlessly has been very attractive to a lot of people.
AnneMarie Schieber:I was just shocked when I read that one in eight people have tried these drugs. And we don't they they're fairly new. We don't know the long term consequences. I would be afraid to take the drugs even if I had, like, 20 pounds to lose because I'd be afraid that unless I if I went off the drug, my weight would explode. And, you know, again, it comes down to changing your diet, finding more long term solutions without side effects.
AnneMarie Schieber:You know? I don't know what the side effects of these drugs are, but, you know, you could do a lot. And, you know, I wrote there a couple of years ago, the the show South Park came out, and they had a hilarious episode on these weight loss drugs. And I wrote about I wrote a review. And, you know, in this review, in this episode and I'm sure it's online somewhere, but I would highly encourage you.
AnneMarie Schieber:It's alright. I gotta, you know, give a caution here because the language in it is not very nice. But in the beginning, it's about a character who's obese. And the mom is in the doctor's office, and she says, exercise just doesn't seem to work for him. And it's hilarious because it illustrates all the competing interests compounded by government regulation that make health care dysfunctional.
AnneMarie Schieber:My favorite scene in this episode was there were some you know, the kids' friends were wanted to manufacture the drug in their basement, and they were drawing buying ingredients from India to do it. And the sugar industry was outraged that all these people now didn't wanna eat sugar. And there's a really hilarious scene in the episode where Captain Crunch stages a terrorist attack on an Indian drug ingredient company that's supplying The US underground market. Yeah. It it it was a really good show.
AnneMarie Schieber:I don't know. Did you have you seen it?
Devon Herrick:I I have not. But
AnneMarie Schieber:It's it's probably out there. We'll we'll put the link to the article, and I'm sure you could find it somewhere. But I I just thought they did a a remarkable job just showing all the dysfunction in the health care industry wrapped around this this drug. Alright. Well, we've chatted about a lot of stuff.
AnneMarie Schieber:We've run out of time. Be sure to check out health care news at the heartland.org website and the Goodman Institute health blog for free market perspectives on the very latest in health care. In the meantime, stay well, stay safe, and we'll be back here in a couple of weeks. Thanks for tuning in.