Definition of Insurance:
Compensation provided to offset the loss caused by a potential event or outcome.
One reason why health insurance is so expensive is because in addition to providing compensation to handle serious medical events in your life (which is what they should do), health insurance companies also involve themselves with things that you can probably handle on your own.
In fact, without your insurance company’s involvement your costs might be less expensive.
‘During 2011, 2010 and 2009, our pharmacy gross profit rate continued to benefit from an increase in generic drug revenues, which normally yield a higher gross profit rate than equivalent brand name drug revenues.‘
What CVS is telling us is that there is a lot of profit to be made with their growing generic drug revenues.
Is it because generic drugs are usually more expensive than brand name drugs?
The reason is because most of these generic drugs are paid for using a combination of a customer’s co-pay and the health insurance company’s negotiated rate. Pharmacies like CVS will not complain about this arrangement because their expected growth rate of generic drug prescriptions in 2011 was $40.5 billion dollars.
When plenty of generic drug pills costing only .30 cents or less there is a huge markup even when the customer only has a monthly copay of just $5 or $10.
There are many cases where you can save money by paying a lower cost directly to your pharmacy and avoid the higher costs arranged by your health insurance’s negotiated payment arrangement.
In the video below Dr. David Belk covers examples of inflated prescription drug prices caused by insurance companies' intervention.
For information on how you can possibly save your money on prescription drugs,
Based on the information provided in Dr. Belk's video above, customers would be better off learning the true cost of prescriptions without their insurance company's involvement and if they can pay a lower price for the same prescription then all the better for the customer, especially the elderly that are on a fixed income.
When insurance companies interfere and cause the price of prescriptions to rise they are no longer providing true insurance protection.
Raising the expenses that a customer has to pay is not insurance at all.
While politicians argue back and forth on our health care system. They should all remember or learn what the true definition of insurance actually is.
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Observing the Cause/Effect cycle of economic systems.