UPDATED: Insulin Pricing and Victim Shaming: An apology.

Last week, Bernie Sanders posted the following video (click to view) on Twitter. It tells the tragic story of a young Minnesota man named Alec Smith with diabetes who died soon after after no longer being able to afford either health insurance or the insulin and other medical supplies needed to keep him alive:

Alec Smith died at 26 because he was rationing insulin that was too expensive. The greed of the pharmaceutical industry is killing Americans and it has got to stop. (with @NSmithholt12) pic.twitter.com/xmryYm0Enr

— Bernie Sanders (@SenSanders) November 21, 2018

The main point of the video is the horrific price gouging on insulin, and a new drug price control bill which Sen. Sanders is pushing for which would tie U.S. drug pricing to that of a half-dozen other countries.

It's a genuinely depressing story, and the proposed drug pricing bill is interesting and worthy of discussion.

However, when I first watched the video, I got hung up on a different aspect of Alec Smith's story...the question of whether or not he would have qualified for tax credits via an ACA exchange policy based on his income. I reached out to Alec Smith's mother, Nicole Smith-Holt, to clarify a few things from her story, but hadn't heard back yet as of yesterday morning...and made a poor decision to post the article yesterday anyway, in which I speculated, based on the limited information in the video, that Alec may have qualified for some level of assistance after all without realizing it.

The whole post was, quite simply, wrong. It was wrong for several reasons, and I'm sorry for each of them.

First, I should have waited longer to hear back from Ms. Smith-Holt. It was Thanksgiving weekend, for heaven's sake, and no doubt a particularly hard time for her and her family. There was no urgent need to post this story this week...and frankly, if I had never heard back from her, I probably shouldn't have posted it at all.

As it happens, after I posted the story and then pulled it a few hours later, I did hear from Ms. Smith-Holt. We had a lengthy online discussion, and after I apologized personally she answered most of my questions, giving me permission to repost her responses:

Ms. Smith-Holt: so actually, he missed the discount by a lot, he turned 26 on May 20th and effective June 1st he had no insurance. In February is when I started my research on what his options would be starting in June. I was starting early because I have heard the ACA system is difficult and I wanted to be prepared and I wanted Alec to have a fairly good idea of what his options would be.

This refers to a special 25% premium discount which the state of Minnesota was offering in 2017 to unsubsidized enrollees as an emergency measure. The deadline to enroll in it was February 8th; the video had given me the impression that Alec had turned 26 a few weeks later. He would have missed the deadline either way, however...and his medical costs still would have been unaffordable regardless.

Ms. Smith-Holt: The entire system is difficult, confusing and it appears to be set up to discourage people from making good decisions on their healthcare. I have been managing my families insurance for 28 years and I was very frustrated, confused and in tears on many occassions trying to figure it out. The options I found were not affordable and from what i hear from many others they are experiencing the same, but regaurdless he chose not to purchase the unaffordable options that we found.

There's a lot of important points here about how confusing and frustrating the entire healthcare system can be, even for those who have years of experience working with it.

And the part of your story about keeping his same clinic and physicians was a correct assumption, it was important to Alec to stay with the same Dr and clinics.

This refers to speculation in my post about an obvious reason why not everyone enrolls in the least-expensive plan available: Network adequacy. It's not just about how wide the network of covered doctors/hospitals/clinics is, it's about who's included in them. If you have a trusted doctor who you've been working with for years, you're going to want to keep them if at all possible...and in some cases it's not just a matter of "preferring" them; it may literally be a life or death difference.

Second...I was victim-blaming. The very fact that I felt compelled to include several disclaimers protesting that I wasn't doing so should have served as a red flag to myself that...yeah, I kind of was.

90% of my healthcare writing is about numbers and other data. How many people enrolled. How much people are paying. How many are receiving financial assistance. I have a tendency to look at everything through that lens...and sometimes that leads me to forget about the human side of all of this insanity.

Alec Smith was a real person. His mother, Nicole Smith-Holt, is a real person, still experiencing real grief over the loss of her son. Telling the APTC story was neither necessary nor helpful in this instance. I added pain to an already grieving family for no reason. I cannot apologize enough for that.

Third, my post literally focused on the smallest part of the problem:

the reason Alec did not buy into the marketplace was all because of the stupid deductible- he would have had to pay for premium, medications and supplies as well as copays until that 7,600 deductible was met, that was going to be impossible. Far too many people are stuck with meeting high deductibles and paying list prices on extremely high medications...his medications and supplies were 1300 a month.

Whether or not he qualified for APTC financial assistance for what would have been $5,400 in annual premiums is irrelevant, because it wouldn't have done anything to deal with the $7,600 deductible. Unlike APTC, CSR assistance (which deals with deductibles and co-pays) would've only been available to Alec if he had earned less than $30,000/year. There was no question that he didn't qualify for that, so his APTC eligibility was mostly besides the point. APTC ikely would have only shaved a couple thousand dollars off of his total costs, which would have been at least $15,000/year including premiums, co-pays and deductibles.

UPDATE/CORRECTION: As commenter "M E" reminds me, since Alec would have been on his parents plan until the end of May, he would only have paid for his own policy for perhaps 7 months in 2017, and the ACA's Maximum Out of Pocket cap was $7,150 for 2017. For 2018 it increased to $7,350. Assuming his $450 premium dropped around 6% this year (which was typical in Minnesota), it means the maximum total amount he would have had to pay, including premiums, deductibles and co-pays (which he obviously would have reached) would actually have been $10,300 in 2017 and  somewhere around $12,000 or so in 2018, assuming everything was in-network.

This is significantly better than $15K/year, mind you...but it still would have amounted to over 30% of his gross income, which is still a major problem, since it's not like this was a one-time catastrophic expense; he would've been looking at this type of annual cost each and every year due to his diabetes.

In addition, I've done a little more research, and I've confirmed that Ms. Smith-Holt was correct that Alec would not have qualified for APTC subsidies after all. The benchmark Silver plan for a 26-year old single adult in Hennepin County, Minnesota in 2017 was $293/month, or $3,516/year. The APTC subsidy cap for someone earning $40,000/year was $3,876/year...which means he earned around $3,000 too much to be eligible. Even at $35,000/yr, he still only would've qualified for around $20/month, which wouldn't have been particularly helpful in that situation.

For someone in Alec's situation, his income would really have had to be under $30,000 to qualify for enough financial assistance to make it reasonable under the current ACA structure...and no more than around $24,000 for it to be truly affordable, since that's the threshold for robust CSR assistance.

In other words, my blog post wasn't just hurtful...it was mostly moot.

That brings me to the fourth reason, which goes back to the original point of the video and the drug pricing bill itself: Why the hell insulin costs so much in the first place?

Ms. Smith-Holt: it seems like Alec's story is primarily about the high price of insulin, we feel he slipped through the cracks of the system, made too much for help with insurance and not enough to afford his meds. I am a firm believer that health care is a human right, and right. I believe health care and medications should be affordable and accessible to all.

Ms. Smith-Holt has become a devout advocate for affordable prescription drug pricing since Alec passed away, as detailed in this Chicago Tribune article from May of this year:

...Now, Smith's mother is speaking out against the high and rising prices of prescription drugs and calling for legislation to prevent excessive price increases for essential medications. "The price of insulin has gone up over 1,200 percent in 20 years," said Nicole Smith-Holt of Richfield, Minn. "It's not affordable. You're price-gouging people who need this one product to live, to survive."

Drugmakers have faced growing pressure over the past year to rein in price hikes, particularly for older drugs such as insulin and epinephrine allergy injections, which have become more expensive without fundamentally changing.

...But advocates believe more pressure is needed at a time when drugmakers, distributors and pharmacists have few financial incentives to change.

...Short-acting Humalog has tripled in price over the past decade and is listed at $275 for a 10 ml bottle, which typically lasts two to three weeks. Lilly is one of three synthetic insulin manufacturers being sued for their prices and marketing tactics.

...Rep. Erin Murphy, DFL-St. Paul, authored a bill in Alec Smith's name authorizing the state to buy bulk insulin at a discount and make it available for free or low cost for diabetes patients with emergency needs.

"It doesn't take that next step of driving down the cost (of drugs), which is where we need to go," Murphy said. "But in the short term, I don't want another example of an Alec Smith."

Most of my analysis tends to focus on the payment side of healthcare costs: How much are premiums? How much are deductibles? How much financial assistance is available from the government? Who's receiving that assistance, who should be, and how much should they be?

Very little of my analysis focuses on the cost side: Why hospitalizations, prescription drugs, etc. cost so much in the first place, regardless of whether the patient, the insurance company or the government is the one paying some or all of the bill?

Put another way: Let's say a particular medication should, by all rights, only cost $10 per pill in order for the drugmaker to turn a profit on it (that is to say, if it was any other product with similar R&D costs and administrative overhead)...yet they're charging $1,000 per pill instead.

The solution to that situation shouldn't have to be "have the government pay for $990 of it". It should be "don't let the drugmaker charge $1,000 in the first place if they don't need to."

We should be working on both sides of the equation: Greater financial assistance to more people and stronger regulations to keep provider costs down.

Unfortunately, in the meantime, as MN State Rep. Murphy notes, "in the short term, I don't want another example of an Alec Smith". Having the government beef up/expand subsidies is the most obvious short-term solution until tackling the actual cost side can be made viable.

With all of this in mind, here's some advice from one of my Twitter followers who rightly scolded me for the blog post yesterday:

If @charles_gaba wants to rally help, he can look back at the #Insulin4all movement and all that's been and is being done to address the issue of unconscionable drug prices.

And he can wait more than a few days over the holiday for a response to get the facts straight.

— Erin Gilmer (@GilmerHealthLaw) November 26, 2018

He can talk to others leading the movement like @erpfiester at @t1international.

He can share resources like those found at https://www.t1international.com/usainsulin4allaction/

He can support state bills asking for price transparency.

He can talk about the ACAs failure in this area and how to address it.

— Erin Gilmer (@GilmerHealthLaw) November 26, 2018

Consider all of these done. I'm following both of those accounts and am spreading the word on this issue.