By Bill Geraci, CEO of MAGIC Health Insurance Solutions

I recently took a trip to see several of the sites mentioned in the song, “Walking in Memphis.” I saw ghost of Elvis on Union Avenue (Sun Records) and followed him up to the gates of Graceland. I also had the most amazing lunch on Beale Street. In fact, there was so much food left over I took about half of it home in a doggie bag.

As I was “walking with my feet ten feet off of Beale,” I heard a voice behind me. It was a very kind and humble homeless man. He said he could tell by the way I was walking I must have been an officer in the military. I told him I was enlisted in the Air Force. After a nice conversation about his (and his daughter’s) situation, he asked me for some money. I offered the leftovers of my lunch, and he gratefully accepted them.

Unfortunately, many employees don’t have the same spirit of gratitude as this kindly man had.

A recent survey found, “While 73% of employees have an employer-provided health benefits plan that includes prescription drug coverage, 80% said it is important that their current or future plan cover the cost of their and their family members’ specialty medications.”

What really stood out from this survey was the following comment. “Employers must have a sustainable strategy to provide a rich pharmacy benefit that is both cost-effective for the company, as well as attractive to current and future employees.”

How is it possible to provide “a rich pharmacy benefit” that is “cost-effective for the company,” when Specialty medications such as Humira can cost up to $84,000 a year or Tremfya $150,000 a year? 

This is an oxymoron.

Providers and members are absolutely oblivious to the cost of Specialty medications.


Because, like everything else with a health insurance plan, the true cost is hidden behind deductibles and minimal copays.

Who is going to pay for the “rich pharmacy benefit”?

I don’t know why, but the answer to this question seems to be lost on everyone.

Of course, the employer, ultimately, has to “pay the piper.” The buck stops with them.

The cost of Specialty medications is projected to increase by 12% this year. A similar increase is forecasted for 2022, as well. Furthermore, approximately 66% of the drugs that gained Food and Drug Administration (FDA) approval in 2019 were specialty drugs, pointing to a steady rise in usage. 

This problem is never going to go away. It’s only going to get worse.

Several years ago, we had a member who was being treated for cancer. The net charge for each chemotherapy treatment was approximately $15,000. The member was driving almost two hours to a well-known cancer facility for their regular treatments. We spoke with our case management company about how to reduce the cost of the treatments. They suggested getting the medication directly from the manufacturer, at a much-reduced cost, and have them infuse at a center closer to the member’s home.

When we offered this option to the member, they were very surprised to hear how much the medications were being marked up. Knowing the higher price was ultimately going to be assumed by the employer, they still decided to continue going to the cancer center.

This is what we run into every day.

Once a member meets their deductible, coinsurance, and copays, which isn’t hard to do with Specialty medications, they could care less about the cost of anything. If I’ve heard it once, I’ve heard at least a hundred times, “My insurance will pay for it.”

There’s a part of me that would like everyone to be responsible for the first $5,000 of their medical costs. It would be an eye-opening experience for them, just like when someone sees their COBRA rates.

Many would complain to the government, which would bring us closer to the disaster called “free” healthcare.

As we’ve all heard, “There’s no such thing as free!”

Only if more people were like the kindly homeless man at the beginning of this post; grateful for their employers who are trying to provide steady work, good pay, and the best benefits they know how to provide in a very competitive global economy.

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By Bill Geraci, CEO of MAGIC Health Insurance Solutions

My mother was an early breast cancer survivor. Even with a tough course of treatment, a mastectomy, and maintenance medications, she lived a good, long life – 91 years. As anyone will tell you, she was a spunky, sassy, strong-willed, freckled-face, red head, and I loved her. She was my mom, and I miss her a lot.

About 1 in 8 U.S. women (about 13%) will develop invasive breast cancer over the course of her lifetime. The chance that a woman will die from breast cancer is about 1 in 39 (about 2.6%). Since 2007, breast cancer death rates have been steady in women younger than 50 but have continued to decrease in older women. From 2013 to 2018, the death rate went down by 1% per year.

Just the sound of the word “cancer” creates fear and dread in most everyone. It’s like a totally innocent person getting a death sentence. No one asks any questions. We just do what we have to so the person can recover and live a good, full life, just like my mother did.

The cost of cancer

Unfortunately, there are those in the Healthcare industry who know and take advantage of this situation. They charge exorbitant amounts of money, knowing no one is going to question them. After all, are we going to put a price tag on someone’s life?

So, it’s a delicate, balancing act we must perform to keep the Healthcare industry honest.

In late 2019, a member of one of our plans was diagnosed with breast cancer. Last year, she successfully went through surgery and treatment. Early this year, she went through reconstruction surgery.

The total charge (before any PPO discount) for the reconstruction surgery was $133,257.46. What was so stunning about the bill was the cost for the breast implants – $77,085.44. The cost of the surgery was $38,668.00.

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Doctors and hospitals will always respond to allegations of excessive charges that patients don’t ever pay the billed charges. This is correct. If the doctor or hospital are “in the network,” there is a discount. In the case of this reconstructive surgery, the discount was $75,956.75 or 57%. This left a net bill of $55,379.25.

A quick Google search will show you, “With health insurance, out-of-pocket costs for breast reconstruction add up to a few hundred to several thousand dollars. In some cases, costs can hit $10,000 to $12,000 or more.”

Our hospital’s net charge was five times the average amount.

Our Solution

So, we did what we always do, ask for an independent audit of the bill, and they recommended a payment of $32,161.16.

Having dealt with this hospital in the past, we fully expect them to send the balance of the bill, $23,218.09, to the member. This is called “balance billing.” At first, the letters from the hospital are polite and business-like. However, they soon turn threatening, which of course, puts fear in the heart of the member. The hospital can count on the member going to the employer, complaining they didn’t ask to be put in a situation where they could be sent to collections or even sued for the balance.

This same hospital once sued seven members of our plans for similar situations. When the Court asked for justification for such extreme measures, the hospital decided to settle out of court, forgiving all the balances.

Our auditor is willing to put their reputation on the line. They are willing to defend this member from being harassed by the balance bill process with this hospital.

There are egregious charges in the healthcare system. None are worse than with cancer.

Because of this, the ultimate payer of these charges, the employer, has to have someone who will protect their company and their bottom line.

Are you working with a broker or consultant who is wiling to roll up their sleeves and go to battle for you?

If not, give us a call at (844) 800-MAGIC. 

You, your company, and your bottom line no longer have to be at the mercy of the system.

We will show you how to take back control.