I went to the drug store the other day to pick up two prescriptions. The price tag was nearly $400.
I didn't really pay that much. The nice woman behind the counter said the computer ate my insurance information, and she had to enter it again. The final cost was $35.
My insurance gives me generic drugs for $10, and brand names for $25. What this means is that one of my prescriptions was a generic that probably costs $50, and the other was an outrageously overpriced brand name that cost more than $10 per pill. At that price, I would probably just live without the medicine. To tell the truth, I don't notice much difference anyway.
And herein is the problem. When consumers are insulated from the true costs of what they buy, the prices go up. It skews the whole supply and demand curve. Somebody just made $325 because I only had to pay $25.
Insurance companies are supposed to be able to keep costs down because they can negotiate with the drug companies for volume discounts, helping restore the economic balance.
But it doesn't seem to work. I can remember back when my insurance didn't cover drugs. Medicine was a lot cheaper back then. Along comes insurance, and the prices go up faster than a barrel of Saudi oil.
And now we have the giant Medicare drug benefit. I'm too young to get any benefit, but we all bear the costs. I read last week where, despite what proponents of this system contend, the benefit is driving drug prices even higher, according to AARP. Take the sleep drug Ambien. It rose in price by 30 percent in one year. Just paying for this drug would make me lose sleep.
But the point is that I don't pay for it, or at least I don't think I pay for it when I'm picking up my prescriptions. Eventually, we all pay for it, as the costs are just passed on through higher insurance premiums.
But I don't pay for all of those costs, either. My company picks up the majority of my health insurance bill. If I had to pay the whole thing, it would add up to more than my house and car payments combined. Again, I'm insulated from the costs, but somebody pays, and the cost keeps going up.
If you want another example of how screwed up this system is, you will see doctors charge those with insurance more than those without insurance and who can pay cash upfront. Doctors know that the insurance companies will delay paying bills as long as possible and fight any questionable charges, so the doctors screw them back by charging more. I saw one estimate that the amount of money wasted in this tug-o-war over billing would pay for insurance for all the uninsured people in this country. It's an incredibly wasteful system for which we pay 50 percent more than any other country.
We don't need more insurance, we need more health care. Insurance doesn't cure disease. It stands between people and their health.
The comptroller general of the United States, David Walker, was featured on "60 Minutes" recently, relating that the country is in dire long-term financial straits, with trillions of dollars of unfunded liabilities coming down the road in the next 20 years.
And what did he recommend we do about it? Fix the health care system.
Walker said that if we don't substantially reform our current system over the next 20 years, it will bankrupt the country, not to mention what it will do to us.
"It's the number one fiscal challenge for the federal government, it's the number one fiscal challenge for state governments and it's the number one competitive challenge for American business," Walker said.
Fixing health care isn't an option, it's a must, and it won't happen without pain, kind of like going to the doctor.
How it gets fixed is the most important task government will have to tackle in the coming years. And it's up to us to keep their feet to the fire, to make sure this "reform" isn't just another boondoggle.
• Kirk Caraway is editor of http://nevadapolitics.com, and also writes a blog on national issues at http://kirkcaraway.com.