I spent the early morning at our town hall paying property tax, about 33 percent more than last year, which brings the cost of property tax up to about half of what the house would rent for. I had a discussion with the assessor about why our basement has doubled in value since last year and why the rotting detached garage has appreciated almost as much.
I spent the late morning affixing previously purchased annual registration stickers to our airplane and helicopters at Hanscom Field. These are required by the Massachusetts Aeronautics Commission, recently reorganized into the Registry of Motor Vehicles. I spent the afternoon driving to a U.S. Department of Transportation certified drug testing lab where I underwent an alcohol and drug test (drive time was about one hour round-trip; wait time was 45 minutes; test time was about 10 minutes). The lab promised to forward the results to the person in charge of our drug testing program… i.e., me. We do a handful of sightseeing rides around Boston every year, which means that all pilots and mechanics are required to be on a random drug-testing program. As far as I know, there has never been a crash of a commercial aircraft that was attributed to a pilot or mechanic being on drugs; the regulation was put in place about 20 years ago for millions of workers in all forms of transportation.
I spent the evening on the phone with Medco, a prescription drug insurance provider. One of the benefits of living in Massachusetts is that it is illegal to pay for health care, at least unless you’ve already paid for health insurance that you would expect to cover that care (though it seldom does). A woman, let’s call her “Donna” to preserve medical privacy, had previously attempted to get a prescription filled at CVS for her infant. The pharmacy demanded $40 instead of the usual $5 co-pay because Medco had denied coverage. The dosage was too high. A 35-minute phone conversation ensued between Donna, Medco, and the pharmacist. Medco would not pay because the dosage was over their daily limit. It was coming up on time for a refill, so I decided to take on the challenge of getting Medco to pay up. I called up a wonderfully intelligent and helpful claims representative. He first explained that Medco provided all of its customers with an easy-to-understand formulary. If I had a copy I would surely see the dosage limit plainly written out. I responded that I did not have a copy. He referred to his own copy. “This is very confusing and I can’t figure it out. Let me get a pharmacist on the line.”
It turns out that Medco employs numerous pharmacists who never dispense drugs to patients. Their only job is to sit in an office and figure out how various rules and regulations apply to whether or not their employer will have to pay for a prescription. The first pharmacist figured out that the limit was quite low, about one quarter of what the pediatrician had prescribed. How could this make sense, I asked, when the drug was prescribed by weight and was taken by people from infancy through adulthood. “You’ll have to file an appeal with the plan administrator who came up with the formulary,” said the Medco folks. The claims representative thought this answer did not make sense, so he decided to talk to a different pharmacist in another branch of the company. The second pharmacist explained that the computer system wasn’t advanced enough to figure out how much an infant should be taking by age so they put in an arbitrary limit for the drug. Whenever it was prescribed to a young patient, the pharmacy filling the prescription was supposed to call a special help line and learn how to put in an “age override”.
The phone call lasted approximately 30 minutes, including a lot of hold time waiting for pharmacists.
Soon this kind of experience will be required by federal law for every American (though it may be unconstitutional according to this article; my personal argument would be that dealing with insurance companies constitutes cruel and unusual punishment and requiring it is therefore unconstitutional). I wonder if politicians are enthusiastic about health insurance because none have ever tried interacting with an insurance company. Surrounded by interns, assistants, and a non-working spouse, and provided with the most comprehensive coverage imaginable, a Senator could be excused for thinking that health insurance is as simple as car insurance.
How much business did we lose at the helicopter branch of the flight school because we had to comply with all of these regulations? None. Due to the state of the economy, we didn’t have any customers. Maybe I should thank the government for giving me something to do…
[I mentioned the Medco story to a doctor who runs clinics in Haiti, Peru, and Rwanda. “That’s a generic drug,” he responded. “Been around for 40 years. We pay about 1 cent per pill. You were having a discussion about less than 50 cents worth of medicine.”]
Phil – sorry for your experience with the healthcare debacles. Things like ‘age overrides’ and ‘dosage limits’ make me extremely uncomfortable … glad I’m not the only one….
cheers
Plenty of senators and congressmen have interacted with insurance companies. The interaction consists of a delivery of a suitcase full of money to the campaign fund.
“brings the cost of property tax up to about half of what the house would rent for”
Do you mean half of a month’s rent, or half of the full year’s rent?
Just asking because I live in Spain, where I pay around 1,000 euro per year in property tax on a 3-floor semi-detached with garden. I understand taxes in the States are much higher, but how much?
John: I meant half of the full year’s rent. Property tax in the U.S. is usually 1-2 percent of the value of the house. In a city where there is a lot of demand for rentals, you can probably rent a house for about 5 percent of its value. In the suburbs, however, especially if the house is fancy, a house might rent for only 2-3 percent of its value.
The property tax in Westchester, New York, is 3.25% of the “value” per year. As an example, my 3300 square foot house on one quarter acre is still valued at $1.1 million USD. Obviously I wouldn’t be able to afford purchasing it now, and in fact am trying to sell it, but the market is very poor, the exceedingly high taxes make it difficult, and the value is way down from what they think it is.