Governing By Scuttle

On the day Virginia seceeded from the Union, there was a scramble for control of Navy ships. The USS Merrimack was a steam powered frigate which had been in federal service for five years. She was moored at the Norfolk Navy Shipyard, along with many other Union vessels. In preparation to move the Merrimack to Philiadelphia, her engines were lit and plans were made to take her out to sea, away from advancing Confederate forces. However, during the night, small ships were cleverly sunk by the enemy, thereby blocking the Merrimack in dock. Her commanding officer ordered the crew to set fire to the ill-fated vessel and burned her down to the water line to prevent her from falling into Confederate hands. The USS Merrimack sank right where she had been moored.

USS Merrimack

Desperate to develop a navy, the Confederates raised the USS Merrimack and remade her into an ironclad ram. Nearly two years after being burned and sunk, she was renamed the CSS Virginia and put to use to disrupt the Union blockade. The Virgina saw action on several occasions, but was eventually trapped in a bay and faced the threat of being taken by the Union. The Confederate commader ordered her to be stripped of all value and destroyed (yet again). After plundering guns and munitions, the CSS Virginia was filled with a good amount of gunpowder. The resulting blast ripped her in two and sent her once again to the depths.

CSS Virginia

Scuttling, the deliberate sinking of a ship by it’s commander, commonly involves opening valves and hatches, lighting fires, or blowing a hole in the vessel. Donald Trump is the commander of the USS America. Surrounding himself with former military leaders, there is a wartime-like obsession with disabling our great vessel. To his devoted crew who romanticize authoritarian rule, scuttling makes perfect sense. It is adrenaline charged action against all that has stood in the way of right wing rule. The crew cheers with each destructive event, even as water rushes into the hull and our government rides low in the waves.

Never in the history of political transitions have there been so many unfilled leadership positions. Many agencies are running on autopilot. And in those cases where leaders have been appointed, many of those chosen have openly professed the intention to cause damage to the agencies they lead. Before being appointed as the 14th Secretary of the Department of Energy, Rick Perry ran a campaign to shut that department down. Before being appointed as the 11th Secretary of Education, Betsy DeVos made it clear her intention was to divert public education funds to private schools. And before becoming the 17th Secretary of Housing and Urban Development, Ben Carson said poverty is a state of mind and stated his intention to cut services to the poor.

Domestically, Trump has knocked great holes in the side of our boat by defunding insurance subsidies for the Affordable Care Act (ACA), threatening the program’s solvency and ultimately threatening the health insurance of 20 million citizens. With another blast, he has defunded the Chidren’s Healthcare Insurance Program (CHIP) blowing 9 million poor children out of Medicaid coverage. White Supremacists have and been made to feel confortable on deck with their guns and axes and torches. They are chopping away at civil rights and setting fires. Smoke is billowing into the sky.

Internationally, the historical good will and trust of our allies has been badly damaged. Explosive charges have been detonated, blowing holes in the base of our great ship by questioning the US commitment to NATO, backing out of the Paris Accord thereby hampering an international response to global warming, decertifying the Iran nuclear deal and opening the door to future military engagement, and brushing aside diplomacy in favor of threatening North Korea with nuclear strikes.

Finally, plans are underway to remove plunder from our sinking ship. Beautiful yachts, the best money can buy, have pulled alongside the USS America. They wait greedily to load their hulls heavily with tax cuts for the richest citizens while Commander Trump falsely assures passengers there is no cause for concern as this massive removal of wealth will benefit everyone.

Like the USS Merrimack, the USS America is moored in her home port. The engines are lit, but she will not be going out to sea. No course has been charted. On the distant horizon, a potential rescue can be seen coming toward us, but it won’t arrive until November 2018. Will we be prepared to lend a hand?

[Special thanks to American Research Writer Micah Crittenden for critical input]

Las Vegas: The Cost of Our Wild West Gun Culture

It took 15 minutes for one man to fire thousands of rounds down on 22,000 concert goers in Las Vegas on October 1, 2017. There were 59 killed and hundreds injured in the deadliest shooting rampage in modern American history. 

Save your breath with friends/families and forget about any Facebook campaigns to draw attention to this tragedy. Prayers, condolences, and flags at half staff are the best we can hope for. 

Gun enthusiasts are a loud group and well financed. What they want is worth more than your freedom. Open carry is worth more than your freedom to feel safe in a grocery store. Being able to sell guns with hardly a background check is worth much more than your freedom to attend large public gatherings with peace of mind. Purchasing guns that can be easily converted to human murder machines is worth more than the freedom of you child to safely attend school.

This is the era of the Wild West Gun Culture. Our children and grandchildren will study our political paralysis. Historians will write about how we undervalued our own freedom so gun enthusiasts could walk the streets packing heat.

The Parasitic One Percent

The one percent (1%) who fund the political campaigns of Congress, are pushing for tax reform. This is code speak for chaneling more wealth to them while working Americans pay their expenses. 

The One Percent:

  • Use our roads to drive their goods to market
  • Use our legal system to form agreements and protect their wealth
  • Use the Internet created by our tax dollars
  • Land at our public airports
  • Trade using U.S. currency
  • Sell their goods in protected and regulated markets 
  • Utilize banks, which we insure and protect
  • Invest in the stock market we regulate
  • Eat foods and take medications we pay to insure for safety

They reap profits and live comfortably while doing all they can to avoid contributing to the system where they flourish. And then they brag about paying nothing! They say it’s their obligation to avoid paying a #FairShareTax. 

They say we owe them for creating jobs. But what’s really true? They hire profit creators (workers) which we paid to educate in our public schools and colleges. Those profit creators make goods for the one percent, deliver those goods to market for the one percent, and sell those goods to consumers for the one percent. And then, to add insult to injury, the profit creators pay a #FairShareTax for the bed of roses which the one percent sleeps upon!

I’ve had enough. This is immoral.

#FairShareTax

Healthcare is a Freedom Issue

“Texas Jim,” as his friends called him, worked on a house framing crew making $18 an hour ($37,000 a year). He was able to support a wife and two little boys. They lived in a rental house with a small yard and shared a family car. Jim’s wife supplemented the family’s income by watching a couple of babies in the home.

Jim’s employer couldn’t afford health insurance for the framing crew. Texas Jim and his wife looked into insurance options, but the cost for basic nothing-special coverage was way too high. It would have claimed more than one third of the family’s income for premiums, not to mention deductibles and co-pays.

Then came that Saturday when Texas Jim was putting boxes in the attic. He lost his balance and fell through the ceiling, breaking his right leg in two places. He went to the emergency room, where they set the leg and braced it. The attending physician told Jim the break was complicated and he needed to see a specialist. The bill for the ER visit was a staggering $2200, which the family didn’t have. They set up payments.

Texas Jim talked to his boss about the broken leg and the need for further treatment. The boss liked Jim and valued his work. He encouraged him to heal up and return to the framing crew. As a show of support, the boss told Jim he could provide half-pay for two weeks.

The orthopedic specialist told Jim there would be a need for surgery and a few months of physical therapy. Without treatment, he would have chronic pain and limited use of the leg. The cost for surgery and physical therapy, without health insurance, was estimated to be around $25,000. For Jim, that cost was completely out of reach. The freedom to work a good paying job was gone. 

There are millions of hardworking Americans like Texas Jim who don’t have health insurance. They support families, pay taxes, and contribute economically to their communities. What happens when serious illness strikes? Back injury, cancer, a broken leg, and severe depression are just a few problem with the potential to interfere with employment. Sadly, the most common reason given by the poor for being unemployed is illness or disability

Healthcare is a freedom issue. Without it, the door to work a good paying job can become suddenly closed. It is time for our nation to provide Medicare for all. 

Medicare is divided into two parts. Part A covers hospitalizations and home healthcare. That’s free. Part B requires a reasonable monthly premium and covers doctor visits, therapies, tests, and medications. There are deductibles and co-pays attached. Some people opt for an additional layer of coverage, known as Medigap insurance. This is a private healthcare insurance that can expand Medicare coverage and limit out-of-pocket expenses. 

Medicare for all promotes the freedom to continue working a good paying job when faced with illness or injury. It’s made up of layers of cost and care, depending on what a person can afford. It works within our current healthcare system. 

Freedom always wins.

Cajun Navy: Who Are These People?

My wife related an encounter with the Cajun Navy, while working as part of a crisis support group in the aftermath of Hurricane Harvey (2017). A representative of the Cajun Navy showed up at the prison where her team was responding. Because my wife was responsible for all staff and family support, the Cajun Navy sought her out and asked what they could do to help. The emergency response team was working closely with FEMA and the Red Cross, but they were uncertain about who or what the Cajun Navy was. My wife had seen something on the news about guys with boats rescuing stranded citizens. A little doubtful about their relevance to her team’s operation, she asked what the Cajun Navy was offering. The guy said, “Anything. What do you need?” He offered water, food, clothing, and transportation. However, he continued to emphasize the word “anything.” My wife said they could use a hot meal for about 250 personnel. She explained how the staff were living on site to care for the 6,000 inmates who were in the prison and the emergency responders providing support to the families of officers adversely affected by Hurricane Harvey. Without hesitation, the Cajun Navy rep said, “Okay. Are you asking for food for the inmates, too?” To make certain he understood the situation fully, she carefully reiterated that there were 6000 inmates. “Right,” the guy said. “Are you needing us to feed them?”

In relating the story to me, my wife said with amazement, “Who are these people?!? This Cajun Navy is far more than guys with boats! They appear to be very well connected to a deep network of caring and motivated people!”

Because there was ample food on hand for the inmates, the offer of food for the 6000 was declined. 

The Cajun Navy brought a hot meal to emergency personnel and officers. It was Cajun food, which was delicious and gratefully received by staff and emergency responders. 

Coming together and providing aid during times of great difficulty is one of the most beautiful things about being an American. God bless the Cajun Navy and the families who support them!

Corporate Culture, Ashley Madison, and Trump

Many of us have heard of the salacious AshleyMadison.com, an internet resource platform for people seeking extramarital affairs. In 2015, the Ashley Madison website was hacked and gigabytes of scandalous information was released to the public. Interestingly, many of the exposed accounts were registered with corporate email addresses. This provided an opportunity to make comparisons between Ashley Madison activity and corporate behavior within the companies where account holders worked. 

In an article cleverly entitled 50 Shades of Corporate Culture, researchers found corporations which fostered a culture of innovation and risk-taking had the most Ashley Madison accounts. These were companies with business models built around rapid financial cycles and cut throat competition. The research also showed that high rates of Ashley Madison account ownership strongly predicted corporate tax disputes, lawsuits, product quality concerns, and financial misstates due to bribery, fraud, and inflated earnings. These findings built upon research conducted four years earlier, where Harvard business scientists described “the dark side of creativity.” Turns out inventive individuals show a propensity toward dishonest behavior. 

President Trump was elected by an impatient group of citizens to change government using his wealth building ingenuity. There are certainly many historical examples where Trump skirted the rules to avoid an obstruction or to cash in on profits. One example of this involved a financial crisis at Trump’s Taj Mahal. The casino was on the verge of missing a critical bond payment when father Fred walked into the casino and bought 3.5 million dollars worth of chips and walked out without gambling. This action immediately put money on the books to pay the bond debt (Trump was later assessed a $30,000 fine by the New Jersey Division of Gaming Enforcement for this illegal loan). Trump came up with a creative solution to get around an obstacle. 

As we would expect in the life of a very creative person, there are also many articles about Mr. Trump’s pre-POTUS years as a man who has lived his personal life outside the box. The dark side of creativity is evident. Professionally, Trump has evidenced cycles of dizzying success followed by bankruptcy and reorganization. We have also seen tax disputes, lawsuits, product quality concerns, and financial misstates. Personally, Trump has had high profile affairs and failed marriages.

And who does Trump surround himself with? Other ingenious individuals who see opportunities to cash in on their seats at the White House. Jared Kushner aiding his family’s real estate business, Stephen Bannon hanging on at Breitbart News, Ivanka Trump hawking jewelry, and General Michael Flynn working deals for his consulting firm during the Trump transition. Trump fills his executive stable with business people who live their lives outside the box.

From the Ashley Madison study, there were corporations which had very few accounts. They came from industries which favor slower paced business models where steady, smooth operations yield the best profits. These included fabricated products, mining, shipbuilding, railroad equipment, textiles, rubber/plastic products, and coal. The federal government might best be compared to these corporations. There’s a place for some ingenuity, but steady and smooth operations yield the best results.

Trump is the lead engine of a federal freight train pulling 110 cars. He wants to use his ingenuity to suddenly change course, and he’s getting frustrated that flashy moments of deal making aren’t impacting the speed and direction of the load. 

For those worried about a train wreck, we have two things going our way: inertia and the inevitability of serial scandals due to the dark side of Trump’s creativity. 

 

ALERT! YOUR CO-PAY HAS BEEN CLAWED BACK

How Does Prescription Drug Insurance Work?

Every insurance plan has preferred drugs, brand name drugs and drugs that are either not covered or have a high co-insurance cost.  These are often arranged into Tiers.

  • Tier 1 – Generic Drugs

    • Once a drug has been on the market for 20 years (25 in some circumstances), the patent held by the company which created the drug expires.  This allows other companies to create the exact same drug (chemically and in delivery) for a tiny fraction of the price.
    • Lowest copay amount
  • Tier 2 – Non-Preferred Generic Drugs

    • Same as above just more complex or expensive ingredients.  Could also be generics purchased by new companies trying to drive profits.
    • Slightly higher copay amount
  • Tier 3 – Preferred Brand Name Drugs

    • These drugs are less expensive than the Non-Preferred list, but are still under patents and therefore significantly more expensive than a generic.
    • Often have a higher copay than a generic drug
  • Tier 4 – Non-Preferred Brand Name Drugs

    • These are expensive drugs which are still under patent.  They are often the brand name drugs for the generics in Tier 1.  Considered an unnecessary insurance expense.
    • These drugs are often susceptible to a copay and having to pay the cost difference between the Brand Name and the Generic version.
  • Tier 5 – Specialty Drugs

    • These drugs are expensive, new and used to combat complex diseases.
    • They are often not covered at all or require heavy co-insurance payments and restrictions on access.

So…how do tiers become tiers?  Why is a drug covered under one insurance plan and not another?  Who controls this system?

Pharmacy Benefit Managers

Insurance Companies and Employers contract PBMs (Pharmacy Benefit Managers) to organize and negotiate plans with pharmacies and drug companies.  These folks are super important to understanding the cost of pharmacological medicine.

BCBS uses Prime Therapeutics from Irving, TX, as their PBM for many of their plans.  According to Prime Therapeutics’ website:

“Prime Therapeutics’ NetResults is one of the most aggressive formularies in the industry. And it works. Our clients are seeing an estimated savings of more than $10 per member per month.

So being aggressive pays off — we get people the medicine they need without the use of high-cost drugs.

Go bold or go home.”

So wait.  You do this formulary thing and we avoid high-cost drugs and everyone wins?  Cool.  

What’s a formulary?

A formulary is a tiered list of drugs covered by a prescription plan.  The “NetResults” formulary can be accessed here.  It uses a “p” for Tier 1, “np” for Tier 2, “P” for Tier 3 and “NP” for Tier 4.  The copay assigned to each of those tiers depends on how much your insurance company/business wants to pay for prescription coverage.

The average copay for a three-tier system (usually combines tiers 1 and 2 from above and excludes all drugs from tier 5) are $11 for Tier 1, $31 for Tier 2 and $53 for Tier 3.

So how do Wal-Mart and Target offer $4 generics WITHOUT INSURANCE? (They totally do.  Check out their lists here and here)

Average Wholesale Price

The Average Wholesale Price is the price a pharmacy buys the drug for in bulk.

It is considered the industry’s average price paid by a pharmacy to a drug manufacturer per 30/day or traditional supply.  You can find the federal government’s ACA payment AWP list here.

Let’s use Meloxicam 15mg as an example.  Target offers it for $4 without insurance.  The FDA says its AWP is about 1 cent a pill.  That’s a wholesale cost of 33 cents per 30 day supply.  With my insurance it is $4.18/30 day supply at Walgreens (as mine is a percent, not a copay).  The average cash price for the same amount is $13.78.  Priority Health will charge you $7 after you meet their $75 deductible.

NOTE:  The pricing isn’t even this simple as it is what the manufacturer reports to the government.  It doesn’t include all of the standard rebates and coupons given as incentives to PBMs and Pharmacies in the form of checks after our collective purchases.

Has it ever occurred to you that pharmaceuticals are like a grocery store without price tags?  Everyone pays a different amount and no one knows exactly why.  But more importantly, does Walgreens keep all of the 1,250% markup on my Meloxicam?

The Clawback

A PBM clawback occurs when an insurance company assigns expensive copays to a drug, a price that may be significantly higher than the actual value and acquisition cost of the drug.

Clawbacks occur when your pharmacy submits a claim for a prescription drug, and you’re directed to collect a specific dollar amount for the copay. The amount will likely be excessive and unrelated to the acquisition cost of the drug. – pbahealth.com

So for example, if you paid that $7 co-pay for 30 days of Meloxicam and Walgreens paid 33 cents, the PBM would clawback over $6 of that copay YOU PAID after paying your deductible and monthly premiums.  The amount of clawback to these PBMs has skyrocketed the cost of medication.

  • The PBM negotiates with drug companies to decide which drugs will be part of their formulary and on which tier.
  • The PBM establishes a rebate program for themselves based on purchases made by member of their formulary.
  • The PBM then sets the copay amount (often far above the actual price of the drug).
  • When the copay is more than the pharmacy charges, the PBM claws back all of the copay paid beyond the cost of the drug.

On top of this, you could have gotten the prescription cheaper by paying cash and not using your insurance.  But, if you’re a pharmacy, telling a customer not to use their insurance is asking for big-time PBMs to make your pharmacy a persona non grata under all plans they administer.  That would be a huge loss.

What Did We Learn?

There is a lot about pharmaceuticals that needs overhaul and transparency.  When the pharmaceutical rep shows up in a short skirt to your doctor’s office talking about the next big drug, she’s bringing with her a list of PBMs who have tiered that very medication.  The whole system revolves around a few key players who negotiate the prices, set the premiums, set the copays, choose the drugs, tell the doctors what scripts to write, tell the pharmacies what to charge and then collect back huge sums of cash from your family’s bank account.  We need transparency so that we can reform this broken system.  The only thing that can fight darkness is the light of day.

Further reading on other relevent pharma shenanigans

Micah Crittenden is a Senior Writer for American Research and is on Twitter at @thatgingerish