RUSH: Here's Stacy. Oh! Oh! This is our insurance expert from the unknown wilds of the state of Georgia, Stacy. Gee, if I'da known it was you, I'da gone to the phones sooner. I'm sorry.
STACY: No, that's okay, Rush. How you doing?
RUSH: Well, I'm fine. How are you doing?
STACY: Well, what a day. Well, listen, there's so much to talk about. When I read the New York Times article this morning, I just knew I had to call you because there's so many problems with it. But the most important thing to tell you --
RUSH: With the story, problems with the story?
STACY: Oh, yeah.
RUSH: Yeah, it's not complete at all.
STACY: But the most important thing to tell you --
STACY: -- is that there is a much more dramatic issue here for 2014 than premiums.
RUSH: Hmm. What?
STACY: Let me explain it to you.
RUSH: All right.
STACY: You go to your doctor, and your doctor writes you a prescription for an antibiotic. You go to the pharmacy. Now, there's three entities involved in that transaction at the pharmacy --
RUSH: What if I have built up an immunity --
STACY: (laughing) There's the pharmacy itself. There's what's called a pharmacy benefits manager --
RUSH: Oh, jeez.
STACY: -- and then there's the insurance company, okay?
STACY: Now, realize that Obamacare doesn't apply to the pharmacy benefits manager. Okay, they can do whatever they want to do, in terms of communications, all this stuff. Decent apply to them.
RUSH: Stacy, this is my bad. I didn't put two and two together and recognize that it was you, and I'm up against it on time. Can you hold on?
RUSH: Do you have some time for the next half hour?
STACY: I do.
RUSH: Great. Folks, if you've not heard Stacy before, she knows it upside down, inside out, and extremely adept at explaining something very complex in an understandable way, so don't go away. We'll take a brief time-out and be back after this.
RUSH: Okay, let's boil this down as we get ready to talk Stacy in the next segment. Obamacare is mandating very low caps on deductibles, and no limit on how much insurance companies have to pay out over a lifetime. And those companies are gonna have to make up that money somewhere. And that is gonna happen by raising everybody's premiums. And raising premiums on everybody, i.e., voters is what Obama has now delayed until 2015.
RUSH: An extensive discussion of the latest chicanery involving Obamacare being delayed in order to not harm Democrats the 2014 midterm elections, and we now go back to Stacy from the wilds of Georgia. She's a semi-regular caller to the program when she gets the itch. She's an expert in the health insurance field in this country and has the unique ability to take all this complicated stuff and synthesize it down to make it somewhat understandable. So let's pick up where you left off. We're talking about the rising premiums, talking about the lower caps, but you say there's something in this involving pharmaceuticals, prescriptions and so forth. Why don't you pick up there at that point where we left off.
STACY: Sure, Rush. I want everybody to understand, this is way more complicated than I'm making it sound, but I'm trying to explain it in a way that everybody will understand the impact to every single person who walks into a pharmacy or walks into a prosthetics store, who walks into any place that you're gonna purchase a product that is supposed to be covered by your health insurance.
STACY: The New York Times article claims that the insurance companies' computers can't handle this. Well, I'm here to tell you, that's a load of bull. We can do it. It's a database change, it's no big deal. Here's the problem. There's not real-time connectivity between all the pharmacies, all the pharmacies in your town, all the mental health providers in your town, all the prosthetic providers in your town, okay, they don't communicate real-time with your insurance company. But we're supposed to be able to, in real-time, tell these people how much you have to pay to buy your prescription, or to see your shrink, or whatever it is you're doing.
RUSH: That's for those who see a shrink.
STACY: Exactly. The pharmacy is the one pretty much everybody's done. You've been to your doctor for an antibiotic or whatever, you go to your pharmacy to buy your prescription. What happens in the background that you don't see, there's three entities involved. There's your pharmacy, is your pharmacist, you're standing there at the counter; there is what's called a pharmacy benefits manager. You can think of them like AT&T or Verizon. They're the people who are connecting the information from your insurance company to the pharmacy, okay? Here's the problem. They don't connect real-time with the insurance company. Usually it's a batch process that happens overnight. So when you go to your pharmacy and you present your prescription for Amoxicillin, your pharmacist enters that information into a computer, and you see that happen. What you don't know is that computer's going to the pharmacy benefits manager.
RUSH: Where is this person?
STACY: Let's just say CVS. Pick any pharmacy. It doesn't matter.
RUSH: But is he on site? Is he in the pharmacy?
STACY: Yes. You're standing there at the counter waiting for this pharmacist to give you your medicine so you can go home and take it 'cause you're sick. You don't care what happens. You just want to go home.
RUSH: I understand. I'm just trying to get a physical layout of where the pharmacist benefit manager's actually at his computer --
STACY: They can be anywhere. They can be three states away; they can be in India; doesn't matter where they are.
RUSH: Could be in Mumbai. Okay. I just wanted to establish that.
STACY: Doesn't matter.
STACY: What they're doing is they have the connectivity to your pharmacist. And what happens is your pharmacist says, "Okay, pharmacy benefits manager, is this drug covered? What tier is it covered? How much does this person standing at my counter have to pay me to get this medicine?" That's how it works today. Under what they're trying to do in Obamacare -- and here's what happens when you have bureaucrats and politicians who have no idea how anything works trying to mandate something like this. At this point the insurance company is processing claims. You've been to your doctor. You pay the copayment, right? So your doctor submits a claim. We're processing that claim, we're updating, okay, you had a thousand and we're adding $30 to your out-of-pocket. Well, you're standing there at the pharmacist, and your pharmacist has no idea how much you have to pay legally to get that medicine.
RUSH: Well, but he charges you something because everybody gets out of there with their medicine.
STACY: Well, but here's the problem, okay, now you've got a Obamacare that says that you can't charge over this amount. If the pharmacist takes your money, and legally he wasn't supposed to, he can get sued. If your pharmacy benefits manager tells the pharmacist to take your money, they can get sued.
RUSH: But Stacy, how can they even set a price if they're not connected in real-time? This pharmacist benefits manager, he can't possibly --
STACY: Sure he can. Because they're not connected to your health part. It's a different -- you can think of it is a bucket, think of it as a bank account, okay. The pharmacy bit is coming out of its own bank account, and then on the back end the pharmacy benefit manager tells us, "Okay, Enis spent a hundred dollars', you know, worth of heart medicine at our pharmacy today," okay?
STACY: We update our database with that. No big deal. Because it's not critical today to know that. But when all this Obamacare crap goes in, then it's critical to know real-time, and that's the key, real-time --
STACY: -- data exchange.
RUSH: Why? What's changing? What about Obamacare is making real-time relevant?
STACY: Because let's say you're almost at your out-of-pocket max, say you've got 20 bucks 'til you're there, and you've been to your doctor, you paid a $20 copayment, you go to your pharmacist to get your medicine. By the law, you don't have to pay a dime for that medicine, but the pharmacy benefit manager doesn't know that, so the pharmacist doesn't know that. So they're gonna say, "Okay, you owe me 20 bucks," 'cause that's what it was last --
RUSH: So then what happened, you pay the 20 bucks that you don't owe.
RUSH: Do you ever find out you didn't owe it?
STACY: Well, I'm sure you will at some point.
STACY: We don't know yet. Is it a report that's coming out the back end of us, is it a report coming out of the PBM? We don't know. Here's the problem --
RUSH: You mean to tell me that if a consumer is charged $20 he doesn't have to pay, somebody in a week or two is gonna get hold of 'em and say, "By the way, we owe you 20 bucks"?
STACY: Sure. Or you can credit it to some -- you know, that's the problem, Rush, is figuring out the money end of all of this. The money end is very complicated. And now, not only is it just that we don't want our patients to have to pay extra money, now it's a legal risk. Now you take your $20 at the pharmacy, and then the patient can sue the pharmacy or the PBM or the insurance company. Now, who's gonna want to do that?
RUSH: Yeah, I see --
STACY: Who's gonna want to hand you that over-the-counter in 20 minutes at CVS?
STACY: So, here's what's gonna happen. They implement this stuff before 2014, and you've got pharmacies who can't do the connectivity, the PBMs aren't ready yet. Remember, they're not covered under Obamacare. They're not legislated to communicate in real time.
STACY: Never. They don't have to. They don't do it today. They don't care. It's not their problem.
RUSH: Well, ultimately it is because it's money, and when money's involved --
STACY: Ultimately it is, but legally, their legal risk isn't as great as the insurance companies or the pharmacist.
RUSH: But Stacy --
STACY: Think about it. They're Ma Bell, they're plugging it in.
RUSH: Stacy, you know as well as I do that your industry is in the crosshairs now.
STACY: Oh, I know.
RUSH: All of this is designed to practically make it impossible for you all to function.
STACY: I know. But here's the problem for 2014. When Enis goes into a diabetic coma standing at the CVS counter because Enis can't get his insulin because the connectivity doesn't exist to tell him how much he owes, what's that gonna do to the elections?
RUSH: But all that's been delayed, hasn't it?
STACY: Well, it has now, and that's why. Because people like me who work in this, who know, are going, "You're gonna have mass chaos."
RUSH: Well, how is this any different under Obamacare? Because there were caps before Obamacare.
STACY: Oh, that has nothing to do --
RUSH: And you can still be about to go over your cap now; doesn't matter whether it's now or twenty -- you can still be about to go over your cap.
STACY: Well, sure. But the difference is --
RUSH: I just don't see how Obamacare changes this.
STACY: Because now it's one bank account instead of two. Remember before I said you think about your pharmacy stuff coming out of one bank account and your doctor and hospital stuff coming out of a separate bank account?
STACY: Now it's one bank account.
RUSH: And it's yours?
STACY: And your money's coming in and out from all over the place, right?
RUSH: But it's the insurance company's account, that's what you're saying here?
STACY: I'm using that as an example to try to visualize why --
RUSH: I'm trying to understand the perspective. You're in the insurance business, you're describing problems for you.
STACY: For me and for everybody who needs medical care. I mean, this is gonna impact everybody, at the point-of-sale when you're standing there that pharmacy counter with the flu waiting for your Tamiflu. I'll tell you something else they've done, Rush, that nobody's talking about.
RUSH: I don't see how Obamacare changes any of this. It seems to me that what's in the New York Times and Forbes today about these caps and delaying these massive premium increases, now, that I can see.
STACY: Yes, and that's the easy part. That's the stuff that everybody gets. This stuff that I'm talking about is the day-to-day impact to you, standing there at your pharmacist, waiting for your wheelchair, whatever it is you're doing, and the fact that we, insurance company, cannot communicate real-time with the pharmacist, with the prosthetic guy, with whomever it is --
RUSH: This is a legal liability concern that you've got here?
STACY: Well, it's legal liability. It's financial liability. I mean, 20 bucks doesn't sound like a lot, but multiply 20 bucks by, you know, a couple million subscribers. Then you've got a financial disaster on the back end trying to figure out where all this money needs to go. Remember, our goal is to never pay out more or less than we're supposed to.
RUSH: You're speaking, when you say "our," the insurance company?
STACY: Correct. We want to pay what we're contractually obligated to pay.
RUSH: No, you don't. Let's be honest, you don't want to ever pay.
STACY: No, we don't. You know what's funny, Rush, talking about the lifetime max, now, this is a totally different topic. The lifetime maximum in my company, the standard is $2 million. That was increased from $1 million about 15 years ago when an employee of the insurance company's wife came down with the necrotizing fasciitis, the flesh eating bacteria.
RUSH: I read about that.
STACY: She came down with it, and within six months she had already had like $1.5 million in claims to save her life, so the insurance company looked at these rare cases and said, "Okay when you have this type of infectious disease, your claim exposure is gonna be greater," so they bumped it up all by themselves to two mill. But the problem with that is -- and it's not so much a problem with two million as it is with unlimited. You as a subscriber or your employer, whoever it is that's paying those premiums are never going to pay that much money. In your whole entire lifetime, you will never pay that much money to the insurance company for your premium.
RUSH: 'Cause you're not gonna be in business long enough.
STACY: I don't care, whoever you are, you are never gonna pay that kind of money.
RUSH: That's true.
STACY: So basically --
RUSH: That's true.
STACY: -- Obama just made us welfare distributors. That's what we do now. We don't do math anymore.
RUSH: Strip it all away, that's what you do. It's just like the old general manager, the CEO of GM, said, "You know, I thought I got in the business to sell cars, and I'm a health care manager."
STACY: It's insane. There's so many ways that you can fix this, and this definitely is not it.
RUSH: They're not trying to fix it.
STACY: But, guys, guess what? Now, it's not just your antibiotics or your insulin or your heart medicine. Obamacare also has made it so that if your doctor prescribes aspirin, daily aspirin for you, we now have to pay that, no cost there.
RUSH: Who prescribes aspirin?
STACY: Doctors. It is considered a standard treatment for heart problems.
STACY: It's a blood thinner. A low dose blood thinner. And now we have to pay for that. You don't have to pay a dime for it. If your doctor writes you a prescription, we have to pay for that. we have to pay for breast bumps. We have to pay for all this stuff that used to be paid by you, if you wanted it, you go get it, great, but leave us out of it.
STACY: Now we have to pay in total for it.
RUSH: Okay, I have dwindling time here and I'm still confused. I don't understand why one bank account or two bank account -- in your explanation --
STACY: Okay --
RUSH: -- I don't know what's different now --
RUSH: -- as opposed to what's gonna happen --
STACY: Let me help you with that.
RUSH: -- with this pharmacy benefits manager guy, whoever the hell he is in Mumbai.
STACY: Okay. He's got his information that we link up nightly, okay, and we say, "Enis has met a thousand dollars of their out of-pocket," okay, and we tell them that nightly, and then they send us a file that says, "Well, Enis went and got a $50 prescription so add $50 to your bucket," and then the pharmacy benefit manager adds a thousand to their bucket. You see that?
STACY: How that data crosses? That only happens once a night. It's a batch process. Okay?
RUSH: Basically what you're saying is, it's gonna lead to a lot of incorrect payments and reimbursements?
RUSH: That's what it's all about.
STACY: And the legal risk for the pharmacy is such that a pharmacist may just say, especially your independent guys, may say, "You're gonna pay me total out-of-pocket, and then you could submit a paper claim to your insurance company."
RUSH: This is just a nightmare. This is ridiculous. The bottom line here is this is just absolutely unnecessary ridiculous, and there isn't anybody at the government level who's gonna be able to make this happen, understand it, design it, oversee it, manage it. You know, I can see where a diabetic goes into diabetic shock at the counter at the pharmacy waiting for the prescription 'cause all this stuff is going on. Everybody's gonna be scared to death if they don't do what the government says they have to do, that's gonna be the primary objective, staying out of trouble with the government rather than servicing the patient there on the other side of the counter. And I can see it, so somebody goes into diabetic shock 'cause they don't have their insulin, who they gonna sue? Stacy, thank you for holding on during the break. I really appreciate it. Always enlightening to hear from you, always, and thanks for your time today.