How insurance companies wear you down before providing benefits

This is a story that starts with a baby. We welcomed a baby to the family last Friday. Since he was late pre-term we were in the NICU for a few days before being finally discharged on Tuesday afternoon. Before we left, a lactation consultant at the hospital said we should check with our insurance company to see if we qualify for a free breast pump. Most insurance companies cover the purchase of a breast pump with a $0 copay which is great because we need one to help us feed our premature baby.

When I called the insurance company, they said there were providers online where we could order one and have it shipped to our house, and that it usually takes a few days depending on availability. They then sent me a list of in-network providers of “durable medical goods” (DMG) near me who I could reach out to.

This list had three vendors on it. Three. For all of Colorado. I called each of them: One didn’t supply breast pumps anymore. One was actually a Target CVS and was not an in-network DMG provider. The third said we would need to get a prescription from our doctor, fax it to them with proof of insurance, and it would be delivered to us within 7-10 business days.

I’d understand the hassle if a breast pumps were dangerous, like opiods, or hard to transport, like an iron lung, but you can buy literally any breast pump you want at any of the following stores, put it in your car next to the carseat, and go home and feed your baby: CVS, Wallgreens, Target, some grocery stores with large pharmacies, the hospital gift shop where our baby was born, any of the other hospitals in Denver, baby stores like The Mammahood, and probably a few other places I don’t even know about.  There are also zillions of them available on Amazon if you can wait a couple days. These are widely available commodities. It shouldn’t be such a hassle to get one to us.

I’d also understand the hassle of breast pumps were expensive, but they’re not. Our insurance will cover up to $165.04 and you can buy a pretty decent one for less than that! So why, then, does it take going through a medical supply company with a prescription to buy something that costs so little? Even if there’s a small amount of waste and fraud in the system, the costs of processing all of the paper work alone must balance out to more unless the insurance company is getting a hell of a deal on these pumps. Think about it, to get this breast pump so far has involved:

  • An hour of my time on the phone with the insurance company and the in-network providers who can fulfill this benefit.
  • Roughly an hour total of time spent by doctors, nurses, and medical assistants helping us issue the prescription and navigate the process.
  • Pump rental while we wait at an (admittedly affordable) rate of $4 per day. If the DMG provider takes the full 10 business days our total not-covered, out-of-pocket, not-FSA/HSA eligible costs will be $68-72.
  • Time spent processing the claim and prescription on the DMG provider and insurance company’s side.

According to the Bureau of Labor and Statistics, the median hourly wage for a general pediatrician is $90 per hour, $35 per hour for a Registered Nurse, and $52 for a Nurse Practitioner. Given these rates, and how many individuals in each of those professions we’ve talked to about this, it seems likely all of this totals more than $165 in total economic activity. All of this with no promise of any specific brand or type of product, leaving us consumers in the dark about what we might actually get. If we end up with a manual pump, for example, we’ll probably just go out and buy our own electric pump out of pocket.

A common argument against Medicare for all or single payer systems in the US is that private markets are more efficient and therefore provide lower costs. This a large, half-billion dollar insurance company has come up with is far from efficient and at some point consumers who can afford it will give up and buy their own out of pocket and those who can’t will either give up and pay more in rental costs or wait it out and eventually settle for whatever the PPO’s DMG provides.

There’s a much simpler solution if you cut out all the bullshit wrapped up in the business model of preferred provider network-dependent insurance companies. A single payer like Medicare could simply issue a coupon to us for $165.04 and obligate any retail store selling breast pumps to take it much like how grocery stores are obligated to accept SNAP benefits. Then, no matter where you live, or where or how you delivered your baby, you can redeem the benefit you’re entitled to with little economic friction.

Better yet, institutions like hospitals and birthing centers could simply give the mom a pump upon discharge and let CMS know. This option also reduces the risk for fraud because it has a built-in mechanism for verifying whether the person in question did in-fact need a breast pump.

Also, WTF is this $165.04 business. Just round it down to $165.

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