State Health Policy Resources for the COVID-19 Era

M2’s focus has always been state health policy, and right now, WOW, there’s a lot of action at the state level! We pulled together a list of resources for anyone wanting to take a closer look at state actions and/or policies by state. See our list below and feel free to share additional state level policy resources you are finding useful.

• Council of State Governments (CSG) is tracking state resources and restrictions and executive orders by state
• Kaiser Family Foundation (KFF) is tracking state policy actions to address coronavirus with information in map, chart, and table form
• The Center for Connected Health Policy is tracking state telehealth coverage policies in the time of COVID-19
• Go to these CMS links for info on two popular Medicaid waivers right now:
  1. Section 1115 waivers by state
  2. Section 1135 waivers by state
• The National Conference of State Legislatures (NCSL) is also posting state health policy COVID-19 related resources, including a map showing the open/adjourned/suspended status of state legislatures
• The National Governors’ Association (NGA) is sharing their state action tracking chart via spreadsheet and PDF

“Medicare-for-All” Understood as Lower Premiums for Me?

Proposals for Medicare-for-All, or more accurately, universal health coverage, are being introduced by both Congress and state legislatures at a rapid pace (see this useful interactive tool, The Many Varieties of Universal Coverage from The Commonwealth Fund). While policy types argue over how such a plan would be funded and how to set reimbursement rates for providers, and Wall Street frets about what single payer health coverage would do to health insurance companies, state legislators and regular people seem to have a different perspective. In my many conversations with people across the country about the idea of “Medicare-for-All,” I have found it striking how often people say they favor such an approach because they want lower health insurance premiums.

I think we may have a language problem. When health policy people hear “Medicare-for-All”, they think “change the health care delivery and insurance infrastructure from employer contributions to taxpayer contributions,” but maybe when regular people say “Medicare-for-All”, they mean “please find a way to lower my premiums”. The Kaiser Family Foundation Health Tracking Poll conducted in early January hints at the importance of lower premiums as a reason to support “Medicare-for-All” type proposals. As shown in the figure below, nearly 50% of people polled strongly favored proposals that allow people between 50 and 64 years of age to buy in to Medicare, or allow people to buy in to Medicaid, or create a plan like Medicare that is available to anyone. Getting insurance from a single government plan is strongly favored by only 34% of respondents.

These “buy-in” proposals may be gaining in popularity as people lose access to employer-sponsored insurance. Here is the math: “if the coverage rate for employer-sponsored insurance was the same in 2017 as it was in 1999 (67.3%), almost 24 million (or 23.8 million) additional people would be covered through an employer plan in 2017.”

It’s easy to understand why people would focus on lower health care premiums; rising premiums are having a big impact on household incomes. As fewer people are receiving health insurance through their employer, they are also being exposed to higher costs for health care premiums. We pulled recent information on employer and worker contributions for health insurance, the average national premium for a person earning just over 400% of FPL ($49,000) to buy a health plan on the ACA Exchange at various ages, and Medicare premiums. We then created a rough comparison chart of what premiums an individual might have to pay for health insurance based on how they accessed coverage. Below is what we found:

Notably, the average annual premium for employer-sponsored coverage of an individual was about $6,900 last year. But employees usually paid just 18% of that amount. For people who may have been covered by their employer for years, and then have to buy insurance in the ACA Exchange, the loss of that employer-sponsored contribution to their health insurance coverage could be quite a shock.

It’s a catchy phrase and easy to hashtag in social media, but is the appeal of Medicare-for-All driven largely by the hope that a person’s premiums will be lower? Is Medicare-for-All the best or only way to achieve lower premiums? As with all policy issues, we should probably start with the key question, “what problem are we trying to solve” and then go from there, always checking to see that we are, in fact, addressing the problem we are trying to solve with a workable solution.

Same health care, different setting, but much higher costs

There is so much health care news happening right now, you may not have seen this, but different services cost different amounts, depending on where they were delivered. While this concept isn’t necessarily news to health care policy types, this latest data set and accompanying graphics make the issue clearer than ever and beg for a policy fix.

The Centers for Medicare & Medicaid Services (CMS) finalized the Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs Rule November 21, 2018, implementing site neutral payments for hospital outpatient clinic visits. The policy essentially reduces payments for services provided in outpatient settings to the same level as the payment made for the same service in a physician’s office.

However, the policy change applies only to Medicare, which covers less than 20% of the U.S. population. The commercially insured, for example, via employer-sponsored insurance and the individual and small group market, account for 56% of the population (see Charles Gaba, The Psychedelic Donut: Types of Coverage in the U.S.).

Wouldn’t a similar policy for people who receive health insurance outside of Medicare be a way to reduce costs?

Outpatient setting is always more expensive…

The Health Care Cost Institute compared a common set of services performed in physician’s offices and outpatient hospital settings and found “for this set of services, the average price was always higher in an outpatient setting than an office setting.”

Services that saw a significant change when provided in an office vs. an outpatient setting varied by service. Some of the bigger changes were for ultrasounds, upper airway endoscopies, and drug administration. For example, “in 2017, 45.9% of level 5 drug administration visits occurred in outpatient settings, compared to 23.4% in 2009.”

Not only did prices increase over time for both settings, the site differential for some of the visits was stunning.

We took the HCCI info and added a calculation of our own for a few of the visit types to show the percentage difference between the price of a visit in the office setting vs. outpatient setting, as shown in the table below.

It is also something that should be made transparent to patients. As mentioned in a recent , health care costs are rising and people are struggling to afford those costs. States are passing transparency bills left and right (hospital transparency, drug price transparency), even though it is unclear how “transparency” actually lowers costs. However, implementing site neutral payments for all payers (not just Medicare) is a more obvious, and more immediate, improvement to rising health care costs.