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How does prescription fraud affect health insurance premiums?
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Prescription fraud–whether through forgery, doctor shopping, or illegal diversion–costs billions each year. Who foots the bill? Insurers pass these expenses along to consumers in the form of higher premiums, deductibles, and copays. Let’s break down the numbers and see why cracking down on fraud protects patients and taxpayers.
What is Prescription Fraud?
Prescription fraud takes many forms:
– Forgery: Creating fake prescriptions or altering real ones to get controlled substances
– Diversion: Legally obtaining drugs then reselling them illegally
– Doctor Shopping: Visiting multiple doctors to get multiple prescriptions for the same drugs
Other types of fraud include billing for services never provided, upcoding to more expensive procedures, kickbacks for referrals, etc. But prescription scams alone total billions per year.
Why is Prescription Fraud so Tempting?
Prescription meds are valuable–and easy to steal. As one former scammer admitted, “It’s just so easy. It’s unbelievable.” Forged scripts can fetch hundreds or thousands on the street. And with over 255 million prescriptions filled each year, the sheer volume makes oversight difficult.
Who Gets Hurt?
We all pay. Insurers recoup losses from fraud through higher premiums and out-of-pocket costs. One estimate pegs the yearly toll of health insurance fraud at $100 billion–and rising. That’s about $800 per family per year. Yet few realize their healthcare is costing more to cover others’ crimes.
Why do premiums keep rising faster than wages and inflation? Prescription fraud is a major culprit. Criminals have grown more sophisticated, using technology to coordinate scams and launder money. And penalties are still too low to deter this high-profit crime.
Consider this: A 2021 survey found 61% of Americans skip treatment due to cost. Yet they’re still paying more to subsidize fraudsters. That shows how waste and abuse contribute to unaffordability.
Who Commits Prescription Fraud?
You might assume it’s only shady drug dealers. But actually, medical professionals commit much of this fraud–from doctors running “pill mills” to pharmacists altering prescriptions. Even otherwise law-abiding folks get tempted: for example, by selling their unused Oxycontin instead of safely disposing it.
In most years, the majority of healthcare fraud is committed not by career criminals but doctors, nurses, pharmacists, and more. Still, organized crime is heavily involved too–using threats and violence to expand their networks.
How Can We Stop This?
Experts recommend several steps to curb fraud and control costs:
- More oversight and stiffer penalties. This makes fraud less tempting and more risky.
- Better coordination and data sharing among insurers to detect suspicious patterns.
- Patient education so they can help identify scams.
- Mandatory e-prescribing to prevent altered scripts.
- Expanded access to addiction and mental health treatment services to reduce demand for abuse.
There are no silver bullets. But a combination of carrots and sticks–prevention plus enforcement–could save billions. And slowing premium hikes would help more people afford the care they need.
The Bottom Line
Prescription fraud drives up costs for all of us. That contributes to unaffordability, skipped care, worse health…and even more fraud when untreated conditions lead to addiction. By tackling this, we can strengthen the system for patients and taxpayers alike.
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