Why is Health Insurance So Expensive?

Costs Keep Climbing Upward

Healthcare costs are on the rise.
Healthcare costs are on the rise.

I suspect that all Americans believe health insurance is too expensive, and the trend is going in the wrong direction—higher. The question is why? There are many reasons, but to this blogger, the main culprit is the cost of medications, specifically specialty medications. The pharmaceutical manufacturers have everything going their way. Consider these facts as I understand them from being in the insurance business for over 20 years.

Big Pharma pays little or no federal income tax because they can write off all R & D costs against earnings thus eliminating paying federal income tax. I learned that many years ago when talking with a Big Pharma executive who told me and further explained that Big Pharma and Congress were very close.

To add insult to injury, Big Pharma sells their medications all over the world for less money than they charge in the US. Many years ago, I met an insurance broker from Northern Nevada who had developed a computer program that allowed you to enter the medication and search the world for the best price. The federal government shut down his program and he went out of business very quickly. The reason Big Pharma was exposed and that didn’t play well is because the average American has no idea about the cost of medications and that everywhere else in the world, you can get them for less money than in the US. We used to drive from Southern California to Tijuana Mexico pay cash for the medications and save a lot of money,

To this blogger, this is inexcusable and needs to be corrected. I suspect that Congress will never address this issue even though they know and understand the ramifications for all Americans.

So, what is a possible solution to this very serious problem? Since we can not count on Congress to do anything on their own, the only plausible solution is to magnify the issue so that all Americans become aware of this situation and pressure their congressperson to do something about it.


This is not an easy task, but as medications become more expensive because Big Pharma does a great job of developing medications to cure so many diseases, the issue will gain more attention when the average American cannot afford the medication that could cure their illness.

This is a very serious situation, and every American has a stake in its outcome. Of course, the average American will not feel any pressure to do anything until and when they have a serious illness that requires expensive medication.

Personally, as an insurance broker and a person with Rheumatoid Arthritis for over 35 years, this issue is close to my heart. In my case, I found the best rheumatoid arthritis doctor here in Nevada and she has me on the right medication to control the disease. The problem is the medication costs $4000 per month.

No, I am not independently wealthy to cover the cost of this wonder drug, but my insurance covers it. I am on Medicare and have a Medicare Supplement, and because the drug must be administered by the doctor, it is covered under Part B of Medicare and not Part D. If I could do it myself, it would then be covered under Part D, not Part B and the entire cost would be on my shoulders.

If I had a Medicare Advantage plan, I would be paying 20% of the cost of the medication. That is not a slap at the MAPD plans but merely how they must operate to maintain viability in the marketplace. The government sets the basic plan design, and the insurance company attaches the pricing.

There are a couple of things to consider when going onto Medicare. Your medications are extremely important, and understanding how these medications are covered by the plans available is of paramount importance.

The average American does not have the knowledge to figure this out by themselves and should seek the services of an experienced Medicare broker to help them navigate the Medicare marketplace. Here in Southern Nevada, there are 84 different plans to pick from and that is a daunting task for anyone. Medicare brokers cannot charge you a fee for their services because they get paid by the insurance company, and all payments are standardized, so the broker is supposed to be impartial.

I hope this information is useful. If anyone has questions, please contact me via phone or email, and I will respond quickly.

Also, if you need Medicare information, take a look at Medicare 2024 Information.

The Barend Agency

The Barend Agency Inc.

Len Barend, Broker

Email: len@insurance4unevada.com