Insurance and Gardasil

When I wrote last June about Gardasil, Merck's cervical cancer vaccine, I got some surprised reactions from people who thought that was a topic way, way outside my usual field. Surprise, it's back!

It's an expensive vaccine — $360 for a course of three shots — and people who want it are running into trouble with insurance:

Many practices must tie up $50,000 or more in vaccine inventory, run multiple refrigerators, insure the vaccines and spend lots of time on inventory management. They also must absorb the cost of broken or wasted vials and say that's not possible with most insurers reimbursing at just $2 to $15 over the $120 per dose charged by Gardasil's developer, Merck & Co. of Whitehouse Station, New Jersey.

"Doctors are drawing a line in the sand on this. They're either not giving it or requiring a surcharge," said Dr. Daniel Schwartz of Broadway Pediatrics Associates in Westport, New Jersey, which charges patients a $25 surcharge per shot.

One of the underappreciated problems of traditional health insurance is what is usually touted as its primary feature: payment insulation. You don't pay for your health care except for some nominal co-pay or deductible — your insurance pays instead.

But there's a catch. Your insurance might not pay enough to properly reimburse your health care providers. The insurance company decides how much something is "worth" and if their reimbursements are too low, you're in trouble. It's out of your hands — it's not your decision. As the example of Gardasil illustrates, doctors may refuse to give you the service or product you want or they may add a surcharge. Then you're paying a whopping insurance premium and the surcharge, if you can get the care at all!

People with high-deductible insurance plans are in a better position to get Gardasil. Even if their insurance won't apply the entire cost of Gardasil against their insurance deductible, they can still pay for the vaccine from a Health Savings Account and get the tax benefit on the entire cost of treatment. (And since most people with high-deductible insurance plans won't exceed their deductibles anyway, the tax benefit is all that matters.)

This example doesn't affect me personally because I'm not a teenage girl, but it still makes me glad I have a high-deductible insurance plan. I'm also glad that I'm not a teenage girl, 'cuz that would be like, so, totally, ohmigod!