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Comment by stouset | Hacker News Reader

The bill caps the price of the co-pay, but the actual cost is still passed on to the consumer through insurance premiums. Meanwhile, the California government has contracted out with a nonprofit pharmaceutical company to manufacture insulin and sell it at cost, which comes out to $30.

This is—in theory at least—more effective, since it forces pharmaceutical companies to compete on price. And if they don't, Californians still have access to a source of cheap insulin.

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Why not both though.

Patients/doctors have much less incentive to pick the cheaper brand if the insurance company is forced to provide the expensive insulin for a low copay.

What kind of insensitive are you talking about?

If a patient can get California-produced insulin for $30 or insulin produced by a for-profit pharmaceutical company for $35, many people won't bother to opt for the former. This, despite the latter containing significant hidden costs which are reflected in insurance premiums.

A 20% difference in cost ought to be enough of an incentive to make the consumer chose the nonprofit one especially since there shouldn't be any “bothering” involved.

Also, insurers would have incentives to mandate the $30 version since it means lower cost on their side and they don't even have to reflect that in insurance premiums (which they don't since they're competing with each other).

If these were items you picked up off the shelf at the store with a displayed price, I’d agree with you.

But 95% of the time, your doctor writes a scrip, your pharmacy fills the scrip, and if the sticker price is “reasonable” you pay and walk out.

If the bill capped the total cost to 30 dollars he would not have vetoed it. The reason he vetoed it is because it would ultimately just trigger insurance companies to raise prices to cover it across the state. That goes against trying to keep healthcare affordable.

Except the insurance companies would have strong incentive to make sure that their clients take the $30 one instead of another one that force them to raise their prices.

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