healthcare

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

By M2|2019-05-07T20:39:01+00:00May 7th, 2019|Health care spending, Health Care Trends, Health Plans, Health Reform, Insurance, Medicare, Medicare For All, Out-of-pocket spending, Uncategorized|

“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.

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What the Midterms Mean for State Health Policy

By M2|2018-11-09T20:29:48+00:00November 8th, 2018|Health care spending, Health Plans, Health Reform, Insurance, Medicaid, Out-of-pocket spending, State Health Initiatives, Uncategorized|

What the Midterms Mean for State Health Policy

The midterm elections have happened and all signs point to health care as a top issue in state legislatures in 2019. We have been telling our readers (and clients) this for several months, and Drew Altman, President and CEO of the Henry J. Kaiser Family Foundation, wrote in a guest post for Axios today: “most of the real action affecting people will be in the states.”

Approximately 4 in 10 voters told exit pollsters health care was the top issue for their voting choices. This isn’t surprising as health care costs are going up by about 5% a year, and consumers are being asked to pay a higher share of those costs, which is clearly putting pressure on state policymakers to do something.

States are under particular pressure because they are responsible for overseeing the individual and small group health insurance markets and Medicaid. Why does this matter? Because an increasing proportion of people are working, but don’t have access to employer-sponsored insurance, and can’t afford health insurance being offered in their state.

That is, people have jobs, but the jobs don’t offer health insurance.

In The Rise and Nature of Alternative Work Arrangements in the United States, 1995-2015, researchers at the National Bureau of Economic Research (NBER), Lawrence Katz from Harvard University and Alan Krueger of Princeton University, estimate:

…all of the net employment growth in the U.S. economy from 2005 to 2015 appears to have occurred in alternative work arrangements.

The researchers found between 2005 and 2015 workers in alternative work arrangements, such as “temporary help agency workers, on-call workers, contract workers, and independent contractors or freelancers – rose from 10.1 percent in February 2005 to 15.8 percent in late 2015.”

For these “gig workers,” buying health insurance coverage, for example in the Obamacare exchanges, means high premiums (see ) and very high deductibles, as the chart below from Avalere shows.

Deductibles of $4,000, $5,000, $6,000 are rarely seen in large employer insurance offerings. Only 20% of covered workers in large firms in 2018 had an annual deductible of $2,000 or more. Compare that to 42% of workers with a deductible of $2,000 or more in small firms (fewer than 199 workers), as the Kaiser Family Foundation chart below shows.

For the parts of the health care market states oversee, including the individual and small group insurance markets, state employees, and Medicaid, states will have their hands full in 2019 as they try to manage health costs for constituents who are working but can’t afford the health insurance options available to them.

It’s hard to understand why it’s reasonable that a freelancer or person working in a small firm can’t have access to the same affordable, robust health coverage as their counterparts in large firms.

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It’s Open Enrollment for Health Insurance. Am I a Small Business?

By M2|2018-11-02T16:14:41+00:00November 1st, 2018|Health Plans, Health Reform, Insurance, Uncategorized|

It’s Open Enrollment for Health Insurance. Am I a Small Business?

Open enrollment started today for the approximately 15 million people – less than 5% of the U.S. population – who do not purchase their health insurance through an employer, or receive it via a government-run program, such as Medicaid, Medicare, or military health care. Likewise, for people enrolled in Medicare, or many employer plans, it is the season to be making a choice about what health insurance you’d like to have for you and your family next year.

As a small business owner, I am also faced with a decision about whether and how to offer insurance to my employees, and what to offer. Here is where the fun begins and where my work life as a state health policy consultant collides with my experience as an employer trying to do the right thing.

In Virginia, as of 2018, I can now choose between buying coverage in the individual market or the small group market. This is because the Virginia legislature passed SB672 this summer, revising the definition of “small employer.” Here is the super boring, but very important change as described by the Virginia Bureau of Insurance in a bulletin to health insurance carriers:

The new law broadens the definition of “small employer” in §§ 38.2-3406.1 and 38.2-3431 of the Code of Virginia (“Code”) to include a “self-employed individual, and to allow a sole shareholder of a corporation or a sole member of a limited liability company (“LLC”), or an immediate family member of such sole shareholder or sole member, to count as an employee of the corporation or LLC, provided that the individual has performed a service for remuneration under a contract of hire.

Why does this matter? Because the rates offered to me in the small group market are much lower than those offered to me in the individual market for the same coverage, in the same market, with the same selection of providers. The difference is stark as the table below shows.

Table 1. M2 Health Care Consulting Healthcare.Gov Individual v. Small Group Rate Comparison

Notably, the Virginia Bureau of Insurance admits in the summer bulletin, “the inclusion of sole proprietors in the definition of “small employer” does conflict with the definitions of “small employer” as administered by the Department of Health and Human Services, the Department of Labor, and the Internal Revenue Service, § 1321(d) of the Patient Protection and Affordable Care Act (“ACA”)…” [emphasis added]

But in its defense of possibly being in violation of federal law, Virginia argues first, that this provision “does not ‘prevent the application’ of the ACA,” and second, that other states have enacted similar laws.

Health care is confusing, expensive, and has become increasingly frustrating. Virginia decided to make a health care policy change this year that makes at least one small business less frustrated, while at the same time making health insurance options for me and my employees less expensive and we appreciate it. Let’s keep working on the system and see what else we can do!

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The Rising Cost of Health Care – a 360 Degree Perspective

By M2|2018-09-21T20:19:20+00:00September 21st, 2018|Health care spending, Health Reform, Insurance, Out-of-pocket spending, Uncategorized|

The Rising Cost of Health Care – a 360 Degree Perspective

The Colorado Women’s Alliance surveyed 2,000 swing women voters in Colorado earlier this year and asked them to identify their top issues of concern, as well as what they hoped the new Governor (who will be elected in November) and Colorado legislature will focus on in the coming session.

The rising cost of health care was the number one issue.

In response, Joni Inman, the Executive Director of the Alliance, in partnership with the Summit Chamber, organized a series of events, including a panel discussion in Frisco, Colorado last week titled “The Rising Cost of Healthcare – a 360 Degree Perspective.” I was honored to serve as a panelist alongside Colorado House Representatives Millie Hamner (D) and Bob Rankin (R), and professionals from the local hospital, a statewide health insurer and the Summit County Care Clinic.

While I am often asked to share policy ideas, for this panel, we were asked to share thoughts on what the consumer can already do that they might not realize is a good strategy available to them to lower their health care costs.

This is of particular relevance in Summit County as it is one of the healthiest places in the U.S., but also has some of the highest health insurance premiums in the country. Not surprisingly, Summit County health care consumers, as the audience quickly proved once the panel discussion started, are highly informed and interested in being proactive about their health care and the health care of their families.

My primary message was simple. When it comes to health care, we need to be much more demanding.

Be a demanding constituent

Sharing the stage with elected officials, I acknowledged the state legislature and Governor’s administration has some ability to make changes to how health care, and health insurance is financed and delivered. With that in mind, yes, it is important to advocate for policy changes. Vote. Call your representative. Send letters. Participate in hearings. Get involved in local politics. Make your opinion and preferences known.

This seems simple, but Reps. Hamner and Rankin were clear that they wanted to hear more from constituents, and individuals in particular, not just from lobbyists. Still, this can be hard to do. We all have busy lives and sometimes it is hard even to know what is happening regarding legislation or proposed policy ideas.

Be a demanding consumer

In addition to being a demanding constituent, it is important to be a demanding consumer. What can consumers already do that are good strategies to lower costs? Know more and ask questions.

First, know as much as you can about what your health insurance costs. What is the premium amount? What is the deductible? What types of services are covered at what levels? What are your rights to appeal a denial? Lots of resources exist. A great place to start is this compilation of websites from the Institute for Healthcare Improvement.

Second, as a consumer and as a patient, it is important to ask questions. Especially about how much a health care service will cost you. Of course, if you have been transported by ambulance to the emergency department, you aren’t going to be able to demand pricing information, but in the many instances you can ask, you should.

For example, as of May of 2018, 26 states, including Colorado (see map) have passed laws banning a practice that forbid pharmacies from informing consumers if and when the drug they were seeking to buy would be cheaper if they paid out-of-pocket instead of using their insurance. Yes, you read that right! Before these laws, many pharmacists were contractually forbidden by so-called “gag clauses,” from answering a direct question from a consumer at the pharmacy counter about the purchase price of a drug.

Ask this question: What is the price of this medicine, or this procedure, or this lab test, if I don’t use my insurance?

This strategy works outside of the pharmacy too. A consumer in the audience at the Summit County event gave an example of going to a local hospital with her husband over the fourth of July after he broke his elbow. When they asked the hospital about the price for the scan a provider recommended, they were told they could receive a 50% discount if they paid cash or used their credit card instead of using their insurance.

When I went to my dermatologist recently, I signed a document saying I wouldn’t submit a claim to my insurer if I agreed to use a specific pathology lab that would only charge $65 for lab tests. While my dermatology office wouldn’t tell me exactly how much I was saving (I was saving it since I was out-of-network and have a $7,600 deductible even in-network), they implied the insured rate for these pathology labs was hundreds of dollars more.

Demand more

Yes, call your legislator. Participate. Organize. Vote. But, we should all demand more of our employers, our health plans, and our health care providers, too. Ask for price lists. Ask for discounts. Ask what care options you have. Ask whether cheaper alternatives exist and how you can access them. Tell your employer you want choices.

We are all health care consumers, even if we aren’t all patients. Make your voice heard and your preferences known. Consumers can change the way the system works, but we have to demand that change.

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Are $59 Virtual Visits at CVS Health a Play for Women?

By M2|2018-08-23T13:49:46+00:00August 22nd, 2018|Health Care Trends, Innovation, Retail Health, telehealth, Uncategorized|

Are $59 Virtual Visits at CVS Health a Play for Women?

Last week we wrote about how CVS Health offering $59 telehealth video visits through the company’s retail medical clinic, MinuteClinic, would significantly change the health insurance market. This week, we are going a step further to consider the specific effects of the CVS Health offering for women.

As covered previously, CVS Health is looking to serve people with routine health needs who are shopping for lower costs. Who is doing that shopping? Primarily women. Women make “80% of the health care decisions for their families.” If the woman is a mother, surveys show more than 75% of the time, she is responsible for choosing a child’s health care provider and taking the child to health care appointments. Women who aren’t mothers are also often caregivers – nearly 50% of women without kids make health care decisions for a family member.

The combination of increasing deductibles – more than half of cost-sharing payments were in the form of a deductible for the first time in 2016 – and increasing need for health care at convenient times has already driven women to be the most likely users of retail clinics.

According to FAIR Health, in 2016, women accounted for a higher percentage of retail visits covered by insurance than men in nearly every age group. For people between the ages of 19 and 30 who visited a retail clinic, nearly 70% of visits were by women, as the chart below shows.

CVS Health, no doubt, already knows women are the primary users of their in-person MinuteClinics. Converting women MinuteClinic visitors to $59 telehealth visits shouldn’t be too difficult since women are the primary health care decision makers, and the virtual visits are cheaper and more convenient than going in-person to a CVS store.

Will other health care organizations follow CVS Health’s lead and start to cater more to women as health care consumers? Theirs seems like a data-driven strategy that other entities might be wise to emulate. Just as the $59 virtual visit will disrupt the health insurance market, the new CVS Health offering could also change the way the health care system meets the needs of the primary health care decision-maker in the U.S. – women.

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CVS Health Just Upended the U.S. Health Insurance Market

By M2|2018-08-15T13:38:07+00:00August 14th, 2018|Health care spending, Health Care Trends, Health Plans, Health Reform, Innovation, Insurance, Out-of-pocket spending, Retail Health, telehealth, Uncategorized|

CVS Health Just Upended the U.S. Health Insurance Market

For $59, CVS Health will now offer telehealth video visits through the company’s retail medical clinic, MinuteClinic. The video visits will be available through the CVS Pharmacy App to anyone interested who lives in Arizona, California, Florida, Idaho, Maine, Maryland, Mississippi, New Hampshire, and Virginia – and Washington D.C.

This move will significantly change the health insurance market, and CVS’s merger with giant insurer Aetna isn’t even final, though reportedly, the “Justice Department’s antitrust division hasn’t turned up vertical competition concerns from the merger,” increasing the odds significantly that the deal closes before the end of the year.

What does CVS Health see that is driving this strategy? A shifting private health insurance market that requires people to pay up front for routine care, making consumers more sensitive to costs and less obligated to use a provider that is “in-network.” In the olden days (2006!), as the chart below shows, patients paid the majority of their cost-sharing payments in the form of copayments or coinsurance, that is, payments to providers who had an agreement with a health insurer. In 2016, for the first time, more than half of cost-sharing payments were in the form of a deductible, as the chart below from the Peterson-Kaiser Health System Tracker shows.

MinuteClinic video visits for $59 (paid for directly by the consumer) capitalize on three ongoing trends: 1) Patients have to pay more, before insurance starts to pay for claims, making consumers more sensitive to cost; 2) Patients want more convenience and CVS can deliver it more cheaply, in no small part because there are no insurance forms or administrative costs; and 3) Payers are reluctant to pay for virtual visits.

First, CVS Health is looking to serve people with routine health needs who are shopping for lower costs.

According to FAIR Health, the median charge for a new patient office visit at a retail clinic in 2016 was $109, compared to $294 in an office setting. The average charges and allowed amounts for the most typical retail clinic visits are shown in the chart below from the FH Healthcare Indicators™ and FH Medical Price Index.™

Simply put, the video visits will be cheaper than retail clinic visits. And, even if a patient is referred from the MinuteClinic video visit to one of the 1,100 MinuteClinic physical locations, that patient is likely to save more than $100 for the visit compared to going to a physician visit.

Second, CVS is looking to leverage the steep rise of people seeking care in retail clinics, by offering a clear value proposition to use a MinuteClinic virtually because it’s cheaper and more convenient. As the chart from FH Healthcare Indicators™ and FH Medical Price Index™ below shows, retail clinic visits increased by 847% from 2011 to 2016 with growth in rural areas increasing by 704% and in urban areas by 865%.

Clearly, CVS Health knows their potential customer well. A survey of 5,000 virtual visit users published by the Advisory Board in April shows more than 33% of people who had a virtual visit lived in a city, compared to 9% who lived in the suburbs or rural areas. Virtual visit users are also high earners – 52% “make more than $71,000 a year,” and are more likely to have private insurance.

Third, CVS Health sees that getting insurance companies to pay for virtual visits is hard. Forbes recently touted telehealth in article titled, “Lower Cost Higher Quality Health Care Is Right At Our Fingertips“ but the author was blunt in his explanation of what is holding telehealth back:

“The biggest obstacles? Government. Insurance companies. Employers. They pay the bills. Not only have they been slow to take advantage of telemedicine, they are refusing to pay for most of it…”

Getting a virtual visit via the free CVS/pharmacy app for just $59 means a person can go around his or her insurance company – and CVS avoids that hassle, too. Here are just a few ways that CVS Health’s approach differs from regular health insurance: You don’t need a referral. You don’t need to wait days for an appointment. You probably don’t have to take time off work because the virtual visits are available 24 hours a day, 7 days a week.

If you are one of the 40% of people who has employer-sponsored insurance but is enrolled in a high deductible health plan (HDHP), you probably love the idea of a cheaper alternative to a retail clinic since you are accustomed to paying out-of-pocket for your basic care now. Even if you have insurance, it doesn’t matter, because the virtual visits can only be paid for with a credit or debit card (CVS Health said they will add insurance coverage and national coverage by the end of the year).

Insurers have been offering limited products, in limited geographies, with limited providers, their “network,” for years. The launch of MinuteClinic video visits will be trumpeted as a huge value for consumers. That is only half the story. How will health care providers convince people who are mostly healthy that they have to wait for appointments between 10am and 3pm at a complex, integrated health system where they have to pay to park? How will insurers convince people to continue to buy the expensive, comprehensive coverage on offer today? This move will start to change the way people think about what insurance is even for. Now THAT is disruptive.

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