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Minnesota insurers finally shamed into humane coverage for diabetics

Insurers' stealth contribution to price gouging wouldn't go unnoticed much longer.

Insurers' stealth contribution to price gouging wouldn't go unnoticed much longer. Getty

The problem was that too many people were beginning to notice.

One vial of insulin costs between $3 and $7 to produce. Yet the retail price to Minnesota’s diabetics ran $300 to $400.

There was no way to explain this. Across the border in Canada, the price ran just $30 a vial. It cost even less in much of the developed world.

The easy and rightful scapegoat was Big Pharma. Ninety-six percent of the world insulin market is controlled by just three companies, which have a history of raising prices in concert. But what most people didn’t know is that health insurers were equally responsible. And their stealth contribution to gouging their customers wouldn't go unnoticed much longer.

Though the price of insulin had tripled in the last decade, the money falling into pharma's hands had actually declined by 25 percent. Insurers were negotiating increasingly stiff discounts, ostensibly to soothe their customers' pain. But instead of passing it along, they were pocketing the difference. And the prices kept rocketing upward.

For the insured, insulin costs routinely surpassed $500 a month. In ran past $1,000 for the uninsured. So diabetics were rationing their medicine just to stay afloat. And people were dying.

Even in the world's most predatory health system, dead people get noticed. There were congressional hearings, public sessions in St. Paul, calls to create a state emergency fund to keep Minnesota's 440,000 diabetics alive.

The more people dug, the more they noticed it wasn't just the villain pharma leaving those dead bodies. Insurers were helping to dig the graves. So they've begun to cover their tracks.

Beginning next year, Blue Cross and Blue Shield of Minnesota says it will no longer require copayments for insulin, nor will diabetics have to spend months paying down their deductibles before coverage kicks in.

It followed Medica's announcement that out-of-pocket costs would be capped at $25 a month. The same for UCare.

You could say they finally found their sense of charity, but that's doubtful. They've known for years that their pricing was driving patients to both physical and financial ruin. Only under the prospect of public shaming did they change their ways.

And the true motive likely wasn't altruistic. More and more hearings into their discount negotiations risked revealing all the scams they're running on pricing other medicines. The entire racket was in peril.

It remains to be seen how merciful these new policies will be. Insurers' history is to giveth in the brochures, and taketh away in the fine print. But at least for the moment, the little people of Minnesota can claim a rare victory.