by US Rx Care | Jan 28, 2020 | Health care costs
A new study has found that the average annual
premium for a group family health plan has exceeded $20,000 for the first time
in 2019, up 5% from 2018.
The average premium for single coverage plans
in 2019 is $7,188, up 4% from the year prior, according to the Kaiser Family
Foundation’s annual report on employer coverage.
The costs of high-deductible health plans are
only slightly less than the average. The average premiums for covered workers
in HDHPs with an attached health savings account are $6,412 for single coverage
and $18,980 for family coverage.
Increasingly, workers are picking up a larger
portion of the health care and insurance tab. In 2019, they are paying $6,015 on
average in premiums for family coverage, or about 29% of the total tab. Workers
with individual coverage contribute 17.3% toward the total premium.
Additionally, the average deductible for single coverage is $1,655 in 2019, which is unchanged from the year prior, however, the deductible is often higher for workers in small firms ($2,271) compared to large businesses ($1,412).
The average annual deductible among covered
workers with a deductible has increased 36% over the last five years and 100%
over the last 10 years, according to the report.
Also, 66% of workers have coinsurance and 14%
have a copayment for hospital admissions. The average coinsurance rate for a
hospital admission is 20%, and the average copayment is $326 per hospital
admission.
Another survey by the Kaiser Family Foundation and the Los Angeles Times found that 40% of group health plan enrollees had difficulty affording health insurance or health care, or had problems paying medical bills.
And
close to 50% said that they or a family member had skipped or postponed getting
health care or prescriptions in the past year due to costs.
Easing the burden
There are steps you can take to ease the
burden on both your company and your employees.
Consider plans with telemedicine – More and more employers (69% of firms with 50 or more workers) are offering health plans that cover the provision of health care services through telemedicine. Telemedicine can greatly reduce the cost of care in terms of price for medical visits, as well as the time involved for the employee to travel to the doctor.
Telemedicine can include video chat and remote monitoring.
Utilizing retail health clinics – More health plans will pay for services rendered by retail clinics, like those located in pharmacies, supermarkets and retail stores. These clinics are often staffed by nurse practitioners or physician assistants and treat minor illnesses and provide preventative services. They can greatly reduce the cost of care for these kinds of visits outside normal hospital systems.
Plans with narrow networks – If a health plan can contract with fewer doctors and specialists, there is often less outlay for care. At this point, the jury is still out on exactly how much can be saved, but there are also drawbacks such as:
- Disruption of provider relationships
- Employee backlash
- Reduced access or convenience for
employees
- Lack of specialists.
Tiered or high-performance networks – These networks typically group providers in the network based on the cost, quality and/or efficiency of the care they deliver and use financial incentives to encourage enrollees to use providers on the preferred tier.
by US Rx Care | Jan 14, 2020 | Uncategorized
The U.S. Fifth Circuit Court of Appeals has upheld a lower court’s decision that the individual mandate portion of the Affordable Care Act is unconstitutional because the penalty was set to zero in 2017.
However, the fate of the entire law is still in play after the court remanded the question of whether that
means the entire ACA should be declared void back down to the district court.
Proponents of abolishing the ACA say that its lack of a “severability provision” means that if any element of the ACA is found unconstitutional, the entire law must go. However, that would likely create chaos for the health insurance marketplace.
Two of the three judges on the court on December 18 upheld a lower court’s decision that the individual mandate is not constitutional because it cannot be construed as a tax.
The judges wrote: “The individual mandate is unconstitutional because it can no longer be read as a tax, and there is no other constitutional provision that justifies this exercise of congressional power. On the severability question, we remand to the district court to provide additional analysis of the provisions of the ACA as they currently exist.”
The decision prolongs the court process and ensures that the future of the landmark health care law remains uncertain.
There is much at stake in this case. If the entire law is thrown out by courts, it would reverberate through the health care industry, including insurance providers and hospitals, and put the coverage of millions of Americans at stake.
The decision would affect people who buy coverage in the individual market and those with coverage through Medicaid expansion, Medicare and from their employers.
The ruling that the individual mandate is unconstitutional will be appealed to the U.S. Supreme Court by the 20 Democratic states that are now defending the ACA in this court fight against republican states that filed the suit to abolish the law on the grounds that it is unconstitutional.
Some background
The ACA individual mandate provision ― or “individual shared responsibility” provision ― initially
required many people to own what the government classifies as solid major medical coverage, or else pay a penalty. Congress passed a tax bill in 2017 that included a provision setting the penalty at zero.
ACA critics challenged the mandate through a case that reached the Supreme Court in 2012.
In a ruling on that case, the Supreme Court held that a federal law that blocks challenges to new taxes
protected the individual mandate provision, because the penalty was a tax.
Critics of the provision say that, now the new tax law has set the individual mandate penalty at zero, the
individual mandate is no longer a tax and can no longer benefit from the legal protection accorded to federal taxes.
The takeaway
Because of this ruling, the lower court will likely start hearings on whether the entire law should be thrown out based on the elimination of the penalties for not securing coverage.
The other part of the ruling, that the individual mandate is unconstitutional, is destined for appeal to the Supreme Court. It’s unlikely that it would be heard in 2020 and that the issue about the fate of the rest of the law will take years to wind its way through the courts.
by US Rx Care | Jan 9, 2020 | Health care costs
Starting Jan.
1, 2020, employers can establish accounts for their employees to help them pay
for individual health insurance policies they purchase, as well as for other
health care expenses.
A new
regulation expands on how health reimbursement accounts can be used. Currently,
employers and their workers can contribute to these accounts, which can be used
to reimburse workers for out-of-pocket medical expenses.
With these
new Individual Coverage HRAs, employers can fund the account workers would use
to pay for health insurance premiums for coverage that they secure on their
own.
Up until this
new regulation, such arrangements were prohibited by the Affordable Care Act
under the threat of sizeable fines in excess of $36,000 per employee per year.
This rule is
the result of legislation signed into law by President Obama in December 2016,
which created the “qualified small employer health reimbursement arrangement
(QSEHRA),” which would allow small employers to reimburse for individual
insurance under strict guidelines.
The Trump
administration was tasked with writing the regulations, which created the Individual
Coverage HRA (ICHRA).
How it works
Under the new
rule, if an employer is funding an ICHRA, the plan an employee chooses must be ACA-compliant,
meaning it must include coverage for the 10 essential benefits with no lifetime
or annual benefit maximums — and must adhere to the consumer protections built
into the law.
Once the
ICHRA is created, the employer will a set amount every month into the account
on a pre-tax basis, which the employee can then use to buy or supplement their
purchase of health insurance benefits in the individual market.
The law
allows employers to set up as many as 11 different classes of employees for the
purposes of distributing funds to ICHRAs. The employer can vary how much they
give to each different group. For example, one class may get $600 a month per
single employee with no dependents, while members of another class may receive
$400 a month.
The allowable
classes are:
Full-time employees — For the purposes of satisfying the employer mandate, that means a worker who averages 30 or more hours per week.
Part-time employees — Like the above, the employer can choose how to define what part-time is.
Seasonal employees — Workers hired for short-term positions, usually during particularly busy periods.
Temps who work for a staffing firm — These employees provide temporary services for the business, but are formally employed through a staffing firm.
Salaried employees — Staff who have a have a fixed annual salary and are not typically paid overtime.
Hourly employees — Staff who are paid on an hourly basis and can earn overtime.
Employees covered under a collective bargaining agreement — Employees who are members of a labor union that has a contract with the employer.
Employees in a waiting period — This class would include workers who were recently hired and are in their waiting period before they can receive health benefits (in many companies, this is 90 days).
Foreign employees who work abroad — These employees work outside of the U.S.
Employees in different locations, based on rating areas — These employees live outside the individual health insurance rating area of the business’s physical address.
A combination of two or more of the above — Businesses can also create additional classes by combining two or more of the above classes.
The rules for ICHRAs are as follows:
- Any employee covered by the ICHRA must be enrolled in health insurance coverage purchased in the individual market, and must verify that they have such coverage (as mentioned above, that coverage must be ACA-compliant);
- The employer may not offer the same class of workers both an ICHRA and a traditional group health plan;
- The employer must offer the ICHRA on the same terms to all employees in a class;
- Employees must be allowed to opt out of receiving an ICHRA;
- Employers must provide detailed information to employees on how the ICHRA works;
- Employers may not create a class of employees younger than 25, whom they might want to keep in their group plan because they’re healthier;
- A class cannot have less than 10 employees in companies with fewer than 100 workers. For employers with 100 to 200 employees, the minimum class size is 10% of the workforce, while for employers with 200 or more staff, the minimum size is 20 employees;
- While benefits must be distributed fairly to employees that fall within each class, each class can be broken down further by age and family size. That means employees with families can be offered a higher amount per month and rates can be scaled by age.
by US Rx Care | Jan 3, 2020 | Uncategorized
A new study published in the Journal of the American Medical Association estimates that about 25% of all health care spending in the U.S. is attributable to waste in the system.
The study, conducted by health insurer Humana and the University of Pittsburgh School of Medicine, estimated that between $760 billion to $935 billion of health care spending in the country is wasteful.
The study is eye-opening and reflects the need for new approaches in the health care system and how medical care and pharmaceuticals are paid for. It also reflects the tremendous waste caused by complex administrative procedures, which again cries out for changes in the health insurance and care delivery models.
The researchers identified wasteful spending in the following six areas:
Failure of care delivery: $102.4 billion to $165.7 billion
Failure of care coordination: $27.2 billion to $78.2 billion
Overtreatment or low-value care: $75.7 billion to $101.2 billion
Pricing failure: $230.7 billion to $240.5 billion
Fraud and abuse: $58.5 billion to $83.9 billion
Administrative complexity: $265.6 billion
“This study highlights the opportunity to reduce waste in our current health care system,” William Shrank, MD, lead author and Humana’s chief medical and corporate affairs officer, said in a prepared statement. “By focusing on these opportunities, we could make health care substantially more affordable.”
With that much waste in the system, the industry is crying out for more efficiency in hospitals, medical services delivery, health insurance and administration across the spectrum.
The researchers said that if the industry worked on concrete solutions, it could reduce waste by up to $282 billion a year.
They identified the most promising areas for reducing waste, and said that value-based care and reimbursement models represent a major opportunity to reduce the greatest source of waste: administrative complexity.
Value-based care
They said that value-based care models could improve administrative coordination in the system, which is currently severely lacking. The researchers wrote:
“In value-based models, in particular, those in which clinicians take on financial risk for the total cost of care of the populations they serve, many of the administrative tools used by payers to reduce waste (such as prior authorization) can be discontinued or delegated to the clinicians.”
That, they said, would reduce complexity for physicians and give them incentives to reduce waste and improve value in their treatment decision-making.
Using value-based care in which all parties share some in the financial risk would benefit insurers, employers who sponsor health insurance for their workers, hospitals, doctors and patients.
More and more insurers are experimenting with value-based care, which is primarily a payment model that offers financial incentives to physicians, hospitals, medical groups and other health care providers for meeting certain performance measures. Essentially, they are paid based on patient health outcomes.
Value-based care differs from a fee-for-service or capitated approach, in which providers are paid based on the amount of health care services they deliver. The “value” in value-based health care is derived from measuring health outcomes against the cost of delivering those outcomes.
Other waste
To further reduce waste, the researchers also recommended:
- Addressing the high cost of pharmaceuticals (especially for high-cost specialty drugs).
- Implementing hospital price transparency.
- Implementing market competition policies.
- Improving payer-provider collaboration to reform care coordination, safety and value.
- Implementing new measures aimed at reducing fraud and abuse.
by US Rx Care | Dec 31, 2019 | Uncategorized
May this year bring new goals, new achievements, and a lot of new inspirations for life. Wishing you a year fully loaded with happiness. Happy New Year!
by US Rx Care | Dec 24, 2019 | Uncategorized
Happy Holidays. Wishing you every happiness this holiday season and throughout the coming year!
