By Wayne Winegarden | Forbes

Imagine if you never had to directly pay for your morning cup of coffee again. Instead, a coffee insurer guaranteed that, for a small co-pay, you could enjoy a cup of coffee every morning.

Sounds good?

The catch, and there is always a catch, is the caveat “directly pay.” In this bizarre world, you would still be paying for your cup of coffee every morning, but instead of paying your favorite barista, you would now pay your local coffee insurer.

But, bureaucracy loves complexity. Instead of the coffee insurer directly paying the coffee shop, a middleman enters, promising that he can increase efficiency and reduce costs.

With the entry of the middleman, now, to receive a cup of coffee every morning, you must pay a small co-pay at the coffee shop and your coffee insurance premium. Your coffee insurer uses those premiums to pay the middleman, who then, after a negotiation with the coffee shop, pays the coffee vendor, kicking back a portion of any savings to the insurer.

This scheme, which sounds ridiculous and ripe for abuse, is actually how prescription medications are purchased for most Americans. Three of these middlemen, known as Pharmacy Benefit Managers (PBMs), now control prescription drug benefits for more than 260 million Americans.

After years of quietly gaining power, PBMs are coming under heightened public and congressional scrutiny. And, for good reasons.

Click here to read the full article in Forbes.