Health payers propose new solutions for reducing premiums, other costs for individuals seeking plans through the individual market.
American Health Insurance Plans recently issued a dozen solutions aimed at assisting families with an income over 400 percent of the federal poverty level afford comprehensive coverage covering their pre-existing conditions.
Last year, the United States spent 17.2 percent of its gross domestic product on healthcare, highest of any nation participating in the Organization for Economic Cooperation and Development and almost double the OECD average of 9 percent, the trade association reports.
The twelve solutions put forward by AHIP specifically address challenges consumers face when choosing and paying for health plans in ACA marketplaces.
AHIP identifies as many as three levers and their constituent parts to be used to provide relief to those shopping the health insurance exchanges for plans.
LEVER 1: REDUCE THE COST OF HEALTH CARE
Reduce surprise billing
When consumers can’t opt for an in-network provider, like emergencies, and lack out-of-network benefits spelled out in their policy, providers should be prohibited from balance billing patients in order to shield them from surprise bills and unneeded premium spikes associated with out-of-network care.
A set of payment benchmarks should clearly lay out what the plan’s expected to pay the provider for the rendered services. The benchmark should be designed to ensure a reasonable reimbursement rate for providers while preventing price gouging and excessive consumer bills.
Congress should update the Airline Deregulation Act of 1978 to allow states to regulate their markets in order to more closely control Air Ambulances.
While policies guarding patients against surprise physician bills are implemented, in-network hospitals and other facilities — rather than health plans — should be required to disclose a patient might be treated by an out-of-network provider in that facility.
Curb inappropriate third-party premium payments
Instead of guiding them to coverage for financial gain for third-party dispensing healthcare services, consumers should be enrolled in coverage aimed at best meeting their needs to help contain costs and enhance market stability.
Direct and indirect payments to entities should be prohibited where the provider has a financial interest and clarifying existing guidance under 45 CFR § 156.125. While HHS’ long-standing policy specifies that health insurers may deny any third-party payments outside of federal requirements, current regulations should be formally amended to include this language
Increase drug competition
Create a biosimilars market. Biosimilars can generate cost savings for consumers. To help ensure this, the FDA should finalize regulations promoting robust competition and guarantee patients and providers have unbiased information about the benefits of biosimilars.
Revisit and revise the currently misapplied Orphan Drug Incentive. Rather than a gateway to premium pricing and blockbuster sales beyond orphan indications, it should be applied only to those developing medicines to treat rare diseases. Among those types of diseases for which there’s no therapy, policymakers should ensure newly approved drugs are proved based on their value and efficacy.
The FDA should require drug manufacturers to disclose information on the intended launch price, use of the drug and research, both direct and indirect, and cost of development. Manufacturers should provide transparency into list price increases following approval, while state-level drug pricing transparency laws should be enacted by states, as California and Oregon have done.
Expand the use of telehealth
Support multi-state licensure compacts, which can promote expedited licensure for physicians and/or reciprocity for certain providers applying in multiple states.
State laws and mandates should be consistently applied. Otherwise, it can be difficult for health insurance providers, especially those who operate in multiple states, to provide access to telehealth services.
To meet federal requirements for network adequacy standards, under 45 CFR 156.230, HHS should establish telemedicine as an option.
As a component of updating standards to increase use of telemedicine, states can identify guardrails to ensure telemedicine use is expanded for scenarios for which it is clinically appropriate.
Increase flexibility for reference pricing
Withdraw FAQs to enhance the flexibility of individual market consumers with premium savings, like those in employer-based plans who’ve implemented reference pricing.
LEVER 2: BRINGING FINANCIAL PARITY TO THE INDIVIDUAL MARKET
Provide tax parity for those buying individual market coverage
Greenlight the deduction of the cost of health insurance premiums from taxable income to spark parity between the individual and group markets. Coverage for those purchasing insurance of their own would markedly increase its affordability.
Amend the Internal Revenue Code, which would enable individual market health insurance premium costs to be deductible for federal income tax purposes among those who don’t qualify for premium tax credits.
Expand HSA options
Allow more individual market plans to be eligible for pairing with an HSA. That way, more Americans will be able to save for near-term and long-term health expenses — without paying taxes on those savings
Grant health insurance providers the option to offer coverage of certain services, treatments or medications needed to treat chronic health conditions before an enrollee has met their deductible. Millions in HSA-eligible plans would be in a better position to afford essential services.
Expand the criteria for health plans to be HSA-eligible to all catastrophic and bronze plans. Typically, both include high deductibles that permit more affordable premiums but limit overall affordability of medical care. Enabling consumers to save in an HSA is one way to give consumers a tax-advantaged means of preparing for future medical costs and having funds to access care.
Create reinsurance programs
Create or reinitiate state reinsurance programs that aren’t funded solely by carrier assessments. While reinsurance programs have received bipartisan support in many states, funding sources can be controversial. While they remain the best option, general state funds are scarce. A variety of stakeholders that benefit from reinsurance must share necessary assessments.
Continue to expedite the review and approval of state 1332 applications seeking to create a reinsurance program.
Establish a permanent federal reinsurance program to offset some of the costs that come with caring for individuals with complex health conditions who have significant health care needs.
Create state premium discount programs
The program should be directed at individuals and families earning more than 400 percent of FPL. For the 2017 plan year, Minnesota created and funded one for a resident who didn’t qualify for APTC. The program was funded by the state and provided a 25 percent premium discount for unsubsidized individual market enrollees. States should consider programs if they can be funded without imposing fees or assessments that increase the overall cost of coverage.
Repeal the health insurance tax
Suspend or repeal health insurance taxes. Otherwise, individual health insurance providers will have to factor in the cost of health insurance tax for 2020; a tax that, annually, will continue to add $196 to the cost of coverage in the individual market. The tax is calculated as a percent of the premium, which means consumers already paying the highest premiums must contend with the largest burden.
Enact legislation to permanently repeal the Health Insurance Tax to abet the efforts to deliver more affordable coverage and care, along with reduced premiums for millions of Americans.
LEVER 3: INCREASE ENROLLMENT/IMPROVE THE RISK POOL
Provide savings to consumers who engage in wellness programs
While wellness programs have been limited to the group markets, they’d boost the value of insurance in the individual market among those who believe they’re healthy, drawing more healthy individuals into the risk pool.
Congress should fund an appropriation to enable the 10-state demonstration program for wellness.
Individual market health providers should be allowed to leverage medical management tools and benefit designs promoting safe, effective, affordable care.
Preserve flexibility for plans to promote safe, effective, high-value care
Allow individual market health insurance providers to use medical management tools and benefit designs that promote safe, effective, and affordable care
Marketing and outreach
Marketing, outreach, and education, which helps ensure consumers are aware of open enrollment timelines
Invest in advertising and marketing without increasing exchange user fees, which would lead to premium increases.
While evaluating the user fee as the exchange evolves, CMS should pinpoint user fees that can be allocated to support state marketing and outreach activities. States that elect to receive funds can use them to execute a defined list of marketing and outreach activities, such as support for navigators or other in-person assistance. States that elect to receive user fee funds would be required to provide a plan for how they anticipate using these funds to support open enrollment activities.
Date: November 27, 2018