Despite efforts to establish quality metrics for health care and empowering health care consumers to choose elements of their own coverage, recent findings still show that people shop primarily around cost. This is according to an analysis by the U.S. Department of Health and Human Services (HHS), covered in a recent article in the New York Times.
According to the HHS analysis of buying trends in the public health insurance marketplace, two-thirds of people went for the lowest- or second-lowest-priced plans for the plan year 2015. For the plan year 2016, approximately half of people chose the cheapest plans.
According to health economist Austin Frakt in a different article in the New York Times, choosing a health plan based on premium price alone may be problematic because it leaves out other aspects of choosing care, such as the cost of the deductible. Other aspects of care, such as quality of care and number of doctors in the area, are also left out when only cost is considered.
This is where employers can step in. With clear and regular communication, and simple benefit tools, employers can help employees make the the best health care decisions possible given their health status and budgets.
To read the entire article in the New York Times, click here.
A recent slideshow in Employee Benefit Advisor identified the top 10 worst states for student loan debt. As an employer, should you care whether any of the states in which you hire are on the list? Based on an article by Randy Abbott, a senior consultant for Willis Towers Watson, in Employee Benefit News (EBN) earlier this year, the answer could be “yes.”
According to Abbott, a growing number of employers interested in recruiting and retaining Millennials are offering benefits related to student debt, including debt forgiveness, assistance in paying off debt, and financial advising. A recent Willis Towers Watson survey showed that 4% of employers currently have student debt refinancing programs, but by 2018, that number could grow to 26%.
To find out which states are the worst for student debt, see the complete article in Employee Benefit Advisor.
To read Randy Abbott’s article in EBN on student loan repayment plans and advice for employers considering adding them to their employee benefits, click here.
Private Exchange Adoption Continues To Grow
August 22, 2016
Employers are increasingly turning to private exchanges for their full-time employees, as evidenced by the recent announcement by Starbucks about making the switch.
While large employers have been slower to adopt private exchanges than small- to medium-size employers, according to Craig Jannino, group exchange leader for Willis Towers Watson, this has more to do the immaturity of early exchanges than it does with employer interest. In a recent article in Inside Health Insurance Exchanges, Jannino explained, “Large employers have not lost interest in exchanges. Instead, in our view, private exchanges have only recently evolved to meet the particular needs of large employers.”
Early adopters of exchanges were intrigued by the potential for cost savings. But large employers have traditionally done a good job of managing cost. Thus as exchanges have evolved, so have adopters. Instead of being primarily focused on cost, today’s adopters are also concerned about “meet[ing] the needs of a more multi-generational workforce, creat[ing] a more satisfying benefit experience, and manag[ing] the complexity associated with providing employees with a much broader array of benefit types,” said Jannino.
To read the entire article in Inside Health Insurance Exchanges, click here and select the August 2016 issue. [Note: Article is behind a paywall.]
Parental Leave a Key Attraction and Retention Tool For Employers
August 17, 2016
In the wake of big tech companies such as Netflix and Facebook making headlines for expanding their parental leave offerings, other companies are looking to stay competitive in the war for talent by adding these benefits to their own benefit packages.
According to a Society for Human Resource Management (SHRM) survey, covered in a recent article for Bloomberg, just 26% of employers offer paid maternity leave, 21% offer paid paternity leave, and 20% offer paid adoption leave.
But this won’t be the case for long, according to Willis Towers Watson national practice leader, Jackie Reinberg. Quoted in the Bloomberg article, Reinberg said: “The hottest thing out there is the area of parental leave. Organizations are very, very rapidly looking at creating it as a retention tool or an attraction tool, or increasing it.”
To read the complete article in Bloomberg BNA, click here.
According to the Willis Towers Watson 21st annual Best Practices in Health Care Employer Survey, U.S. employers expect their health care costs to increase 5% this year and next with plan changes, and 6% without plan changes. These increases are at historical lows, but slightly higher than in 2015 and still more than twice the rate of inflation.
The survey also found that in the face of these continuing cost pressures, employers will make modest to moderate changes to their plans and programs to manage costs. However, according to Julie Stone, a national health care practice leader for Willis Towers Watson, given employee affordability concerns, most employers will focus on changes to high-cost benefits rather than on changes that would add to employees’ out-of-pocket costs.
The high-cost services that will get the most attention are pharmacy and especially specialty pharmacy, and surcharges for coverage of working spouses who are eligible for coverage from their own employers.
Employers also are encouraging employees to use centers of excellence for specialty care that have proven track records of delivering quality services at less cost. Telemedicine is being adopted by employers as another source of cost savings. In an article in Politico reporting on the survey and employer adoption of telemedicine, Allan Khoury, a senior consultant for Willis Towers Watson, said, “We think the savings are real.”
To read the press release announcing survey results, click here.
To read two articles on the findings, click here for Kaiser Health News and here for Politico.
In his 2015 State of the Union address, President Obama announced an initiative to dedicate more than $200 million in federal funding to personalized or “precision” medicine. In December of that year he signed into law bipartisan legislation appropriating the funds. And in early March of this year (2016), the White House hosted a Precision Medicine Summit where more than 40 private sector organizations presented commitments they’ve made and ideas they have for accelerating progress in the field.
As part of this effort, the National Institutes of Health (NIH) through the White House announced that it is seeking one million people to participate in a 10-year research effort. Volunteers will be asked to submit their genetic and lifestyle information so government scientists can study it to better understand the causes and cures of some of the most serious diseases affecting Americans. In a recent article in the New York Times NIH Director Francis Collins described it “the largest, most ambitious research project of this sort ever undertaken.”
The target for 2016 is to enroll 79,000 people; the hope is to hit the one million goal by 2019.
For employers, study findings could be used to improve wellness programs and develop better tools for anticipating, preventing, and managing chronic illness among employees. Findings also could be used by HR professionals overseeing health plan design to tailor benefit offerings to better meet the needs of employees who suffer from or are at risk for disease.
To read the complete article in the New York Times, click here.
For more on precision medicine, see our first post on this topic from May of 2015.
A trend toward coinsurance over copays results in Medicare beneficiaries paying higher out-of-pocket prices for their prescription drugs. It also makes it harder for seniors to predict costs because drug prices fluctuate.
Unlike copays, which are flat rates, coinsurance rates are based on a percentage of total costs. Coinsurance was previously limited to higher cost specialty drugs, but its adoption in other drug tiers now is increasing.
According to an analysis from Avalere Health, reported in a recent article in Kaiser Health News, more than half (56%) of drugs covered under the Part D Medicare benefit will use a coinsurance model in 2016. Medicare Advantage plans are also making the change, but at a much lower pace. Just 26% of drugs offered through Medicare Advantage plans will require coinsurance in 2016.
Rising pharmacy costs have been a concern not just for seniors on Medicare, but for health care consumers and providers generally. Pharmacy Benefit Managers (PBMs) have been working to manage the rising cost of drugs to avoid passing on higher costs to employees.
To learn more about the Avalere analysis, click here. To read the complete article in Kaiser Health News, click here.
Consumers Take Advantage Of Exchange Plan Loopholes
August 8, 2016
In the (still) new world of the public exchanges, health plan consumers have been taking advantage of loopholes in the enrollment system, especially as it relates to special enrollment periods (SEPs).
The loopholes and how consumers exploit them are detailed in a recent article in Managed Healthcare Executive. According to the article, the public exchange “trusts but does not verify” claims that would result in an exemption. Some examples of claims people can make that render them exempt include:
- Recently moved
- Lost previous health coverage
- Lost Medicaid eligibility
- Had a change in family status (birth, marriage, etc.)
Jay Wolfson, a professor of public health, medicine, and pharmacy at the University of South Florida, explained two main types of people who falsely claim eligibility for the SEP: 1) people who cannot afford coverage and 2) those simply trying to game the system because they can.
Wolfson speculated that the former category exists because people can wait up to three months to pay for care, meaning they can rack up health expenses in that time and then cancel their coverage before they pay. According to Wolfson, it is unclear what motivates the latter category, Although it might have to do with resistance to the individual mandate.
Many health insurers have expressed concern about SEP system abuse. In comments submitted to CMS, the Blue Cross Blue Shield Association said, “Individuals enrolled through SEPs are utilizing up to 55% more services than their open enrollment counterparts, suggesting that SEP enrollees are sicker or waiting until they need care to enroll. SEP enrollees are also incurring costs in double digit magnitudes over the rest of the ACA risk pool.”
This cost gets spread over the risk pool, raising rates for everyone. That said, the article revealed that many are still optimistic that these loopholes will get closed and the issue will be resolved.
Interviewed for the article, John Barkett, director of policy affairs for Willis Towers Watson, said “In my opinion, plans are more likely to lobby public exchanges to change or enforce the rules than they are to pull out because of gaming. These are solvable problems for public exchanges, and CMS is already taking steps to resolve them.”
To read the complete article in Managed Healthcare Executive, click here.
Public Exchange “A Viable Option” For Pre-65 Retirees
August 3, 2016
According to new data from Willis Towers Watson, 56% of U.S. employers are confident that the public exchange will be “a viable option” for pre-65 retirees within the next two years. The data comes from the 2016 Willis Towers Watson Emerging Trends in Health Care Survey, which gathered responses from 467 employers representing 12.1 million employees.
Additionally, the survey found that 72% of employers intend to make moderate to significant changes to their existing pre-65 retiree health benefits. The willingness of employers to make these changes can be attributed to the continued rise in health care costs for this segment of the employee population. In other words, costs rise, and employers need to take action.
In a recent article for Business Insurance, John Barkett, senior director of policy affairs for Willis Towers Watson, said, “Employers are seeking alternatives to providing their retirees with the same group health care coverage they offer active employees. Many employers have already transitioned their post-65 retirees to original Medicare plus private individual Medicare plans or are planning to. This keeps costs down and retiree satisfaction up. However, because Medicare is not available to younger retirees, employers are looking elsewhere for a solution.”
To read the article in Business Insurance, click here.
To read the complete press release from Willis Towers Watson, click here.
When Care Comes To You: Home Visits Save Medicare Money
August 2, 2016
The doctor is in. But in this case, “in” could mean in your home.
A recent article in Kaiser Health News highlighted the first-year results of a pilot program, called Independence at Home, run by the Centers for Medicare and Medicaid (CMS) to test whether in-home care provided by 17 medical practices for Medicare beneficiaries could improve outcomes for people with multiple chronic conditions while saving money. The answer? According to the CMS, “Yes.”
In fact, the CMS analysis found that participants saved more than $25 million in the first performance year, an average of $3,070 per person. In addition, all 17 participating practices improved quality in at least three of the six quality measures; four practices met all six quality measures.
Doctors going to their patients, as opposed to having them come into the office, saved Medicare $13,600 per patient in Portland, Oregon and $12,000 per patient in Washington, D.C. While this method of delivering care seems antiquated, it has proven to be effective at saving money. The savings comes, at least in part, from reduced emergency room visits and hospital readmissions, and the ability to monitor patients’ chronic illnesses before they worsen.
“House calls go back to the origins of medicine, but in many ways I think this is the next generation,” said Dr. Patrick Conway, head of the CMS Innovation Center, which oversees the program.
Congress has authorized the program through October 2017. It remains to be seen whether the program will be re-authorized with support to extend it nationwide.
For the complete article in Kaiser Health News, click here.
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