by US Rx Care | Feb 12, 2019 | Uncategorized
The number of companies offering health insurance to their employees has risen for the first time in a decade, according to new research from the Employee Benefit Research Institute.
In 2017, almost 47% of private-sector employers offered health insurance, up from 45.3% in 2016. The percentage had previously been dropping steadily since 2008, when more than half (56.4%) were providing coverage.
The trend continues that the larger the company, the more likely it is to offer coverage, with 99% of firms with 1,000 or more employees offering health benefits.
Interestingly, the pre-Affordable Care Act numbers are higher than the post-ACA numbers, despite the fact that the law required employers with 50 or more full-time workers to provide most of their staffers with health coverage.
And the fact that numbers started ticking higher in 2017 points not so much to the results of the ACA, but that the labor market is tightening and as competition for talent increases, more employers are adding health coverage to their benefit packages, according the EBRI’s analysis.
The increases have been across all business sizes.
The percentage of employers offering health benefits in 2017, compared to 2015, is:
- Employers with fewer than 10 employees:5% in 2017, up from 22.7% in 2015.
- Employers with 10–24 employees:2%, up from 48.9%.
- Employers with 25–99 employees:6%, up from 73.5%.
- Employers with 100‒999 employees3%, up from 95.1%.
Another interesting development is the percentage of workers who are eligible to receive health coverage at their employer also ticked up to the highest level since 2014, the year the ACA took effect. But the number was still not as high as in 2013.
The percentage of employees eligible for health insurance is as follows:
The takeaway: Coverage matters
The EBRI attributes the increases in both the above metrics on the fact that workers have been migrating to jobs that offer health coverage. It also puts the changes down to the strong economy, the tighter job market and the fact that group health insurance rates have been increasing at a moderate clip of about 5% a year.
It also indicates that more employers are offering coverage to recruit and retain talent.
There has been a significant drop-off among small employers offering coverage since the recession hit in 2008 (when 35.6% of firms with fewer than 10 employees offered it, a percentage that dropped to its nadir in 2016 of 21.7%).
EBRI analysts cite many factors for the larger decline in coverage offering among the smallest employers, including the effects of the recession on their businesses and the fact that their employees could get coverage on exchanges at relatively low rates thanks to government subsidies.
The overall uptick in 2017 was largely driven by small employers, meaning that they are likely having to step up to compete for talent. As competition for talent will likely continue to grow, it’s likely that more employers will continue adding health benefits, in addition to other voluntary benefits, to sweeten the pot.
If you would like to know more about your options, feel free to contact us.
by US Rx Care | Feb 6, 2019 | Uncategorized
An audit carried out for Ohio Medicaid found
that large pharmacy benefit managers that contract with the state’s Medicaid
program have been pocketing a larger and larger share of drug pricing.
In fact, PBMs charged Ohio Medicaid plans
31% more for generic prescriptions than the amount they paid pharmacists for
the drugs, the audit found, shedding light on a practice that observers say is
being mirrored throughout the country.
The auditor found that the two largest PBMs
operating in the state billed Medicaid managed-care plans $223.7 million more
for prescription drugs than they paid pharmacy providers in 2017.
The report comes as pressure grows on PBMs
to be more transparent about their pricing and costs amid complaints by
pharmacies that are barely breaking even or losing money due to the tough contracts
they have to enter into with PBMs. Many critics say that PBMs are not passing
on the savings to payers when they negotiate lower contracts with pharmacies.
“We know that Ohio is not alone,” Ernie
Boy, executive director of the Ohio Pharmacy Association, said in a prepared
statement. “Every state and every payer in the country is grappling with these
overinflated costs.”
What’s going on
Medicaid doesn’t directly pay pharmacists.
Ohio Medicaid pays five private insurance companies to manage Medicaid plans
for the state. The insurance companies contract out pharmacy benefits to
middlemen, which pay pharmacists to fill prescriptions.
Medicaid and most health plans contract
with PBMs to essentially run the drug portion of the health insurance equation.
They are supposed to negotiate volume discounts with drug-makers and rates with
pharmacies to reduce the overall drug spend by the payers.
PBMs make a good deal of their money from a
growing “spread” between what the PBM pays pharmacies and what it charges
payers (in this case, the state Medicaid program). The PBM keeps the spread,
but most PBMs are not transparent about how much the spread is, leaving both
the pharmacies and the payers in the dark.
According to the report, the overall spread
in 2017 in Ohio was $224.8 million – with an average spread of 8.9% per
prescription. Generic drugs, which comprise 86% of Medicaid prescriptions in
Ohio and for which pricing is most opaque, accounted for an overwhelming
majority of the spread.
The report found that during the entire
study period:
- The average spread was $5.71
per prescription.
- The average spread for
brand-name prescriptions was $1.85.
- The average spread for generic
prescriptions was $6.14.
- The average spread for
specialty drugs was $33.49.
Generic drugs account for 86% of Medicaid
prescription claims in Ohio.
The auditor stated in its report that PBMs’
administrative fees typically range from $0.95 to $1.90 per prescription.
“Although this figure may not include all
of services performed by a (pharmacy benefit manager), it suggests Ohio’s
current spread may be excessive and warrants the state taking further action to
mitigate the impact on the Medicaid program,” the report stated.
As part of its findings, the auditor noted
that pharmacies in Ohio have been shuttering at a brisk pace since Medicaid PBMs
have been cutting how much they reimburse them for medications.
Between 2013 and 2017, some 371 pharmacies
closed in Ohio, coinciding with significant reimbursement reductions in their
PBM contracts. The majority of those closures have taken place since 2016.
As a result of the audit, Ohio’s Medicaid
department directed its managed-care organizations to quit their contracts with
PBMs, citing the opaque pricing practices.
The state’s five managed-care plans were
required to enter into new contracts with companies that were able to manage
pharmacy services using a more transparent pricing model by the start of 2019.
by US Rx Care | Jan 29, 2019 | Uncategorized
A series of changes to Medicare programs may
lead to lower drug prices for some Medicare Part D and Medicare Advantage
enrollees, expand services to include transportation and telemedicine, and
bring hospice benefits to Medicare Advantage patients.
Drug plan changes
Under the Part D Payment Modernization
initiative, the Center for Medicare Services is revising the way Medicare
compensates private insurers, with the intent of increasing competition and
creating incentives for companies to lower drug prices and reduce costs for
plan enrollees.
Under the current system, once a patient’s
spending reaches the “catastrophic” threshold, Medicare picks up 80% of the
cost of the individual’s drugs. Insurers have designed their plans to get
patients to the catastrophic threshold as quickly as possible, so they can
qualify for the higher federal subsidies.
As a result, federal spending for drugs under
the catastrophic phase has skyrocketed 17% per year over the last decade,
rising from $9.4 billion to $37.4 billion.
“This structure introduces perverse incentives to push patients
to the catastrophic phase and leave plans with little reason to negotiate lower
costs for the highest spending patients,” said the Center for Medicare Services’
administrator, Seema Verma. “This means that plans are more likely to manage
drug spending for low-cost patients, since plans are responsible for a greater
share of drug costs at their level for the benefit structure.”
Under the new plan, which takes effect in
2020, carriers will be picking up a greater share of the prescription drug tab
for patients in the catastrophic spending category. In return, they will have
some opportunities to share in overall cost savings under the plan. Federal
officials estimate that the initiative will save taxpayers around $2 billion
per year.
The Part D Payment Modernization Initiative is
part of President Trump’s broader Blueprint to Lower Drug Prices and Reduce
Out-of-Pocket Costs. The plan will create more incentives for plan participants,
carriers and care providers to choose lower-cost drugs where possible.
Value-based insurance design benefits expansion
At the same time,
Medicare is expanding a new “value-based” benefits model to all 50 states.
Under the scheme, called V-BID (Value-Based Insurance Design), Medicare
Advantage plans will have more flexibility to offer cost-saving alternatives:
- Lower
copays
- Better
plan design for lower-income beneficiaries
- Assistance
with treatment-related transportation costs
- Incentives
for preventive care and healthy lifestyle changes.
Telemedicine
V-BID would also
allow plans to cover telemedicine consultations – a key change that could lower
overall costs while allowing plans to extend their reach into previously
underserved rural areas where they had difficulty covering because of federal
network adequacy rules.
The change may
help improve competition and choice in underserved areas.
Hospice benefits
Plans are also
afoot to allow Medicare Advantage plans to start offering Medicare’s hospice
benefit beginning in 2021.
Today, the hospice benefit is covered separately under
fee-for-service Medicare, so patients do not have a single provider network
that is managing all of their conditions and taking responsibility for their
overall health.
The change is designed to increase access to hospice services
and encourage better coordination between patients’ hospice services and their
other clinicians.
“These two models ignite greater competition among plans,
creating pressure to improve quality and lower costs in order to attract
beneficiaries,” Verma said.
by US Rx Care | Jan 22, 2019 | Uncategorized
As group health insurance costs continue rising every year, more employers are embracing a new plan model that aims to both cut costs and improve outcomes for patients.
This trend, known as value-based primary care, is a bit of an umbrella term for various models that involve direct financial relationships between individuals, employers, their insurers and primary care practitioners. Insurers are experimenting with different model hybrids to find better care delivery methods that reward quality outcomes and reduce costs.
This new approach was made possible by the Affordable Care Act and the Medicare Access and Child Health Plan Reauthorization Act. And as the future of the ACA remains in doubt, the enabling parts that allowed for this system of payment reform that rewards health care providers that produce better quality outcomes for lower costs will likely remain intact.
And now more health plans are adopting this model. The 2016 “Health Care Transformation Task Force Report” found that the share of its provider and health plan members’ business that used value-based payment arrangements had increased from 30% in 2014 to 41% at the end of 2015.
In a McKesson white paper, payers reported that 58% of their business has already shifted to some form of value-based reimbursement.
How does it work?
First, let’s look at what the value-based primary care model is not: it’s not a fee-for-service system, under which when doctors see a patient and deliver care, they then bill the insurer a fee that is directly tied to the service they provided.
Fee-for-service arrangements have a fee schedule that lists the usual and customary charges for thousands of different procedures. The payment amounts will vary also based on the
reimbursement rate negotiated between the insurer and health care provider.
The part of the equation that’s missing is that the there is no direct link between the payment and the outcomes of the care. The insurer does not look at if a person was cured or has recovered successfully. There is only a link between the service provided and the payment.
Many value-based models provide a payment bonus to doctors and hospitals that produce better quality outcomes, like if they have more patients who don’t relapse or who recover at a slower pace and require more doctor visits.
Providers of value-based primary care typically charge the health plan a monthly, quarterly or annual membership fee, which covers all or most primary care services, including acute and preventive care.
The main goal is to get away from the fee-for-service system which puts pressure on doctors to only provide very short primary care visits with their patients, who will often send the patient out for unnecessary high-margin services such as scans and specialists and/or write excessive prescriptions. By eliminating this billing structure, doctors are able to practice more proactive care, which can reduce or eliminate certain future health care costs.
But just because the model is patient-focused, it does not mean that costs are higher. Proponents of value-based care say the focus on patients, and focusing on preventative and forward looking care rather than reactive care, reduces overall costs, which should be reflected in premiums.
Some benefits to patients include:
- More time with their doctor
- Same-day appointments
- Short or no wait times in the office
- Better technology, e.g., e-mail, texting, video chats, and other digital-based interactions
- 24/7 coverage by a professional with access to their electronic health record
- More coordinated care.
Vale-based care also improves provider experience and professional satisfaction, which, in turn, is known to improve the quality of care.
by US Rx Care | Jan 15, 2019 | Uncategorized
In the final rules that the Centers for Medicare and Medicaid Services released for 2019, it also covered annual cost-sharing limits for group plans, rules on SHOP exchanges, and grandfathered plans, among other items we’ve covered earlier.
Here we break down some of the focuses of the 2019 rules:
Annual cost-sharing limits for group plans – The maximum annual limit on cost-sharing for 2019 will jump to $7,900 for self-only coverage and $15,800 for other than self-only coverage. That’s up from $7,350 and $14,700, respectively, for this year.
New rules for SHOP – Starting in 2019, the Small Business Health Options Program will no longer be required to provide employee eligibility determinations or appeals, premium aggregation or online enrollment. The SHOP scheme was created as a way for small employers to shop on an exchange much like individuals buying Affordable Care Act plans on marketplaces do.
SHOPs will still be required to determine employer eligibility for the SHOP and certify each qualified health plan available through the SHOP. However, enrollment will not be done online, but rather through agents and brokers who have registered with SHOP or an insurer offering a qualified health plan.
Notably, the small business health care tax credit will remain in place for eligible employers. SHOP will still have a website that includes information on the plans in all geographical areas, a premium calculator and access to customer service where SHOP personnel can answer questions.
One other item that will stay in place is the “rolling enrollment” rule that allows employers to buy SHOP coverage at any point during the year if they meet certain criteria.
The main reason for these changes is that SHOP enrollment has been well shy of expectations, so CMS is looking for ways to continue offering the administration functions required by the ACA.
That said, state-based SHOPs will still have leeway to maintain their current operations as they see fit. But for the most part, starting with the 2019 policy year, federal and state SHOPs will mainly rely on brokers and insurers to take on more of the responsibility for determining employee eligibility, conducting enrollment and collecting premiums.
Another grandfather extension – CMS has extended the transitional policy that allows states to permit insurers in small group markets to renew health insurance policies they would otherwise have to cancel because they don’t comply with parts of the ACA.
This means that states may allow insurers that have continually renewed eligible non-grandfathered individual and small group policies since Jan. 1, 2014, to again renew those policies, provided that the policies end by Dec. 31, 2019.
Health insurers that use the transitional policy will be required to send informational notices to affected individuals and employers.
by US Rx Care | Jan 8, 2019 | Uncategorized
In recent years, many companies have been dealing with rising health care costs largely by transferring more of the expense and risk on to their employees.
But some employers have found smarter, more creative ways to limit health costs without further burdening valued employees. Here are some of the best solutions:
- Pharmacy benefit managers. Pharmacy benefit managers are independent third party administrators who work with pharmacists, employers and workers to reduce costs and inefficiencies. For example, they may help workers migrate from expensive brand name drugs to equally effective generics for a fraction of the cost.
Or they may be able to migrate workers from bricks-and-mortar pharmacies to mail order. They also assist employers with contract negotiations.
- Telemedicine. Some companies are contracting with doctors to provide health services online, via a video feed. It’s no substitute for an in-person examination, but workers can get consultations and routine assessments done and get a prescription for a fraction of the cost of an in-person visit. Furthermore, the worker doesn’t have to take time off work for an appointment. It can be done from the office. A typical insurance billing for a basic medical appointment can run as high as $150. But a telemedicine visit can cost about a third of that amount, according to reporting from U.S. News.
- Wellness programs. Healthy employees cost much less than sick ones over time. Smokers and the obese generate much more frequent and higher medical claims than normal-weight employees.
Employers are fighting back by offering access to smoking cessation and weight loss programs, as well as additional programs for the management of common conditions such as high blood pressure, diabetes and asthma. About 58% of health plans nationwide offer an incentive for participating in a wellness program, according to research from CEB, the best-practice insight and technology company.
- Consumer-directed health plans. Employers are also giving employees greater control over their spending decisions. They are doing this via high-deductible health plans, which come with access to health savings accounts. These allow either an employee or an employer to contribute pre-tax dollars to an HSA. Withdrawals from an HSA to pay for qualified health care expenses are tax-free.
These plans are less expensive for employers than comparable traditional insurance plans, and can work very well for employees in good health. Some employers choose to contribute to HSAs on their workers’ behalf.
- Transparency tools. Cost-transparency tools make the cost of every medical procedure or service visible to employers and patients alike.
A claims analysis from UnitedHealthCare found that those who used the company’s transparency tools spent an average of 36% less on health services. When consumers used price-transparency tools, CEB researchers found an average saving of $173 for employees and $409 for employers per procedure.
