By Susan Jaffe, KHN, May 03, 2022.

Something strange happened between the time Linda Griffith signed up for a new Medicare prescription drug plan during last fall’s enrollment period and when she tried to fill her first prescription in January.

She picked a Humana drug plan for its low prices, with help from her longtime insurance agent and Medicare’s Plan Finder, an online pricing tool for comparing a dizzying array of options. But instead of the $70.09 she expected to pay for her dextroamphetamine, used to treat attention-deficit/hyperactivity disorder, her pharmacist told her she owed $275.90.

“I didn’t pick it up because I thought something was wrong,” said Griffith, 73, a retired construction company accountant who lives in the Northern California town of Weaverville.

“To me, when you purchase a plan, you have an implied contract,” she said. “I say I will pay the premium on time for this plan. And they’re going to make sure I get the drug for a certain amount.”

But it often doesn’t work that way. As early as three weeks after Medicare’s drug plan enrollment period ends on Dec. 7, insurance plans can change what they charge members for drugs — and they can do it repeatedly. Griffith’s prescription out-of-pocket cost has varied each month, and through March, she has already paid $433 more than she expected to.

A recent analysis by AARP, which is lobbying Congress to pass legislation to control drug prices, compared drugmakers’ list prices between the end of December 2021 — shortly after the Dec. 7 sign-up deadline — and the end of January 2022, just a month after new Medicare drug plans began. Researchers found that the list prices for the 75 brand-name drugs most frequently prescribed to Medicare beneficiaries had risen as much as 8%.

Medicare officials acknowledge that manufacturers’ prices and the out-of-pocket costs charged by an insurer can fluctuate. “Your plan may raise the copayment or coinsurance you pay for a particular drug when the manufacturer raises their price, or when a plan starts to offer a generic form of a drug,” the Medicare website warns.

But no matter how high the prices go, most plan members can’t switch to cheaper plans after Jan. 1, said Fred Riccardi, president of the Medicare Rights Center, which helps seniors access Medicare benefits.

Drug manufacturers usually change the list price for drugs in January and occasionally again in July, “but they can increase prices more often,” said Stacie Dusetzina, an associate professor of health policy at Vanderbilt University and a member of the Medicare Payment Advisory Commission. That’s true for any health insurance policy, not just Medicare drug plans.

Like a car’s sticker price, a drug’s list price is the starting point for negotiating discounts — in this case, between insurers or their pharmacy benefit managers and drug manufacturers. If the list price goes up, the amount the plan member pays may go up, too, she said.

The discounts that insurers or their pharmacy benefit managers receive “don’t typically translate into lower prices at the pharmacy counter,” she said. “Instead, these savings are used to reduce premiums or slow premium growth for all beneficiaries.”

Medicare’s prescription drug benefit, which began in 2006, was supposed to take the surprise out of filling a prescription. But even when seniors have insurance coverage for drugs, advocates said, many still can’t afford them.

“We hear consistently from people who just have absolute sticker shock when they see not only the full cost of the drug, but their cost sharing,” said Riccardi.

The potential for surprises is growing. More insurers have eliminated copayments — a set dollar amount for a prescription — and instead charge members a percentage of the drug price, or coinsurance, Chiquita Brooks-LaSure, the top official at the Centers for Medicare & Medicaid Services, said in a recent interview with KHN. The drug benefit is designed to give insurers the “flexibility” to make such changes. “And that is one of the reasons why we’re asking Congress to give us authority to negotiate drug prices,” she said.

CMS also is looking at ways to make drugs more affordable without waiting for Congress to act. “We are always trying to consider where it makes sense to be able to allow people to change plans,” said Dr. Meena Seshamani, CMS deputy administrator and director of the Center for Medicare, who joined Brooks-LaSure during the interview.

On April 22, CMS unveiled a proposal to streamline access to the Medicare Savings Program, which helps 10 million low-income enrollees pay Medicare premiums and reduce cost sharing. Enrollees also receive drug coverage with reduced premiums and out-of-pocket costs.

The subsidies make a difference. Low-income beneficiaries who have separate drug coverage plans and receive subsidies are nearly twice as likely to take their medications as those without financial assistance, according to a study Dusetzina co-authored for Health Affairs in April.

When CMS approves plans to be sold to beneficiaries, the only part of drug pricing it approves is the cost-sharing amount — or tier — applied to each drug. Some plans have as many as six drug tiers.

In addition to the drug tier, what patients pay can also depend on the pharmacy, their deductible, their copayment or coinsurance — and whether they opt to abandon their insurance and pay cash.

After Linda Griffith left the pharmacy without her medication, she spent a week making phone calls to her drug plan, pharmacy, Social Security, and Medicare but still couldn’t find out why the cost was so high. “I finally just had to give in and pay it because I need the meds — I can’t function without them,” she said.

But she didn’t give up. She appealed to her insurance company for a tier reduction, which was denied. The plan denied two more requests for price adjustments, despite assistance from Pam Smith, program manager for five California counties served by the Health Insurance Counseling and Advocacy Program. They are now appealing directly to CMS.

“It’s important to us to work with our members who have questions about any out-of-pocket costs that are higher than the member would expect,” said Lisa Dimond, a Humana spokesperson. She could not comment about Griffith’s situation because of privacy rules.

However, Griffith said she received a call from a Humana executive who said the company had received an inquiry from the media. After they discussed the problem, Griffith said, the woman told her, “The [Medicare] Plan Finder is an outside source and therefore not reliable information,” but assured Griffith that she would find out where the Plan Finder information had come from.

She won’t have to look far: CMS requires insurers to update their prices every two weeks.

“I want my money back, and I want to be charged the amount I agreed to pay for the drug,” said Griffith. “I think this needs to be fixed because other people are going to be cheated.”

Article link: https://khn.org/news/article/medicare-drug-plan-prices-open-enrollment-rise/

By Michelle Andrews, KHN, May 17, 2022.

Andrew Bade, who was diagnosed with Type 1 diabetes nearly two decades ago, is accustomed to all the medical gear he needs to keep his blood sugar under control. His insulin pump contains a disposable insulin cartridge, and a plastic tubing system with an adhesive patch keeps in place the cannula that delivers insulin under his skin. He wears a continuous glucose monitor on his arm.

Bade, 24, has used the same equipment for years, but every three months when he needs new supplies, his health insurance plan requires him to go through an approval process called prior authorization.

Getting that approval can take as many as three weeks, and Bade sometimes runs out of insulin before it comes through. When that happens, the resident of Fenton, Michigan, makes do with leftover preloaded insulin pens. They’re less precise than the pump, and he feels tired when he uses them. But they get him through.

“I don’t understand why they’re taking all this time to make these decisions and then they always say ‘yes’ anyway,” Bade said.

Michigan legislators in April sought to help patients like Bade by approving a law that sets standards meant to hasten that process. Beginning in June 2023, health plans will have to act on non-urgent prior authorization requests in nine calendar days and on urgent requests in 72 hours. In 2024, the time frame for non-urgent requests will shrink to seven days.

“We are ecstatic that it passed,” said Dr. Nita Kulkarni, an obstetrician-gynecologist in Flint and a member of the board of directors for the Michigan State Medical Society, which has pushed for the law for years. “It’s a step in the right direction in decreasing the wait time for therapy.”

Michigan’s law is the most recent example of efforts by states, insurers, and doctors to un-gum a process that is notoriously sticky. Yet most of the initiatives have had limited success.

At least a dozen states have passed broad reforms, according to tracking by the American Medical Association. Others have passed narrower laws that target the process or certain types of medical care or drugs. However, state laws don’t protect most patients because they are in so-called self-funded plans, in which the employer pays claims directly rather than buying insurance for that purpose. Self-funded plans are generally regulated by the federal government, not states. There’s no broad protection at the federal level for people with commercial coverage.

A 2018 consensus statement issued by key health plan and medical provider groups to improve the process has been slow to make inroads.

Prior authorization requirements are intended to reduce wasteful and inappropriate health care spending. Few would disagree with that goal. Studies have found that about a quarter of health care spending is wasteful, whether because of overtreatment, overpricing, fraud and abuse, or problems with health care coordination and delivery.

Health plans say that prior authorization requirements help them protect patients’ safety and improve the quality of care, in addition to rooting out waste and error. Doctors disagree. They say that the process too often leads to delays in patient care and that those delays can sometimes cause consumers to abandon treatment.

The complaints aren’t confined to regular commercial coverage. A report released in April by the U.S. Department of Health and Human Services’ inspector general examined a random sample of 250 prior authorization denials at 15 large Medicare Advantage plans in June 2019. It found that 13% of prior authorization denials by Medicare Advantage plans were for services that met Medicare coverage rules.

Health plans’ use of such requirements continues to rise, according to medical groups. In a March poll, 79% of medical practices said that prior authorization requirements had increased in the previous year, according to the Medical Group Management Association.

Even though insurers and providers may fundamentally disagree on the usefulness of prior authorization, many agree that the process needs to be improved. The consensus statement listed several areas that the groups agreed need fixing. For example, they said doctors and other health care providers who follow evidence-based treatment guidelines and have historically had high prior authorization approval rates may sidestep the process.

The groups also agreed that regular review of these requirements is a good idea, with an eye toward eliminating therapies from the list that no longer warrant it. Improved transparency and automation also made the list.

But doctors say that insurers have made little progress in the four years since the document was released.

“It’s been abysmal,” said Dr. Jack Resneck Jr., a dermatologist who is president-elect of the American Medical Association. “We see the problem getting worse, and we don’t see health plans taking any action to honor the commitments they made.”

Insurers say they’re working through the items on the list.

“We believe that a number of the concerns can be solved by innovations in technology,” said Kris Haltmeyer, vice president of policy analysis at the Blue Cross Blue Shield Association, one of the six organizations that partnered on the statement. He pointed to an electronic prior authorization pilot project undertaken by the insurers’ trade group, AHIP, that resulted in a 69% reduction in the decision time on requests, to just under six hours.

That sort of speedy turnaround would have made a big difference to Jodi Burk, 63, who has rheumatoid arthritis. Burk, who lives in Bellaire, Michigan, takes pricey biologic medications to control her pain and other symptoms. A few years ago, her medication stopped working, and the pain became so bad that she could no longer even take her dog for walks.

Her doctor prescribed a different biologic that she thought would treat her symptoms. But the insurer wouldn’t approve the prescribed drug until she had tried — and failed — four other medications, a prior authorization process called step therapy.

It was five months before Burk was approved and began taking a drug that effectively treated her symptoms. “With these time frames, you’re not getting any better,” Burk said. “You hurt more, and your life is put on hold. There were lots of things that I used to be able to do and couldn’t during those times.”

In addition to establishing time frames for acting on prior authorization requests, the new Michigan law sets standards for notifying doctors and other health care providers about changes or additions to existing requirements. And it requires insurers to implement standardized electronic transaction processes for prior authorization requests.

That standard web-based process was a key element of the law for insurers, said Dominick Pallone, executive director of the Michigan Association of Health Plans.

“Many times [providers] submit incomplete or incorrect information,” Pallone said. “We’re trying to make it easier for the provider to go through and complete it quickly.”

“At the end of the day, we do feel we reached a good compromise,” he said.

Article link: https://khn.org/news/article/prior-authorization-treatment-insurers-doctors-faster/

By Rebecca Torrence, Fierce Healthcare, Feb 08, 2022.

Machine learning has numerous potential applications for health insurers, including in predicting disease onset, future hospitalizations and medication adherence.

But when bias creeps into the development or use of machine learning models, technologies that intend to improve health outcomes can create barriers for certain patients.

In an analysis published in Health Affairs, researchers from Independence Blue Cross, the Massachusetts Institute of Technology and the University of California Berkeley identified several areas where bias can arise in machine learning tools used by health insurers and outlined recommendations for tackling those issues.

Predictive modeling is among the most well-known culprits of bias built into healthcare algorithms. Payers don’t rely solely on risk-based predictive modeling to identify potentially at-risk members, but typically use a combination of predictive modeling, risk scores from commercial vendors, and “if-then” business rules to allocate healthcare resources to those members, the authors wrote.

Disease onset predictive models are less likely to be developed for diseases that impact a smaller segment of the population, or for diseases that don’t have easily scalable interventions, which may leave marginalized communities unaccounted for.

Because these models rely on utilization data to generate predictions, patients who seek care less frequently will contribute less data to the models.

Any data used as the foundation of the model could also be skewed if the provider collecting those data exhibited explicit or implicit biases.

Implicit bias in patient-provider interactions has been heavily studied in recent years. Just last month, a study conducted by the University of Chicago found that Black patients were two-and-a-half times as likely as white patients to be given negative descriptors like “aggressive” or “non-compliant” in their electronic health records.

Similar issues arise with machine learning models that predict the likelihood of avoidable hospitalizations, as barriers to access and use can influence the model’s target population and reinforce existing inequities.

The researchers suggest integrating data that account for social determinants of health, including socioeconomic status, education level, housing and access to transportation, food, and healthcare, into the disease onset and likelihood of hospitalization models to reduce reliance on utilization patterns.

Predictive models for medication adherence run into disparities in diagnosis—racial and ethnic minorities are less likely to be prescribed medications like antidepressants, anticoagulants, diabetes medication and opioids, even when the evidence would call for the prescription of those medications. Access to pharmacies and prescription drugs can also obscure the data.

Indirectly predicting medication adherence through contextual information could allow data scientists to find members that might benefit from lower-cost medication alternatives, the researchers suggest, and thus make them more likely to take those medications.

The analysis suggests health insurers audit their predictive models and business processes to identify potential sources of bias using a variety of strategies.

To ensure each racial and ethnic group is accurately represented in the data, rates of outreach and engagement in care management programs should reflect the proportions of each group in the population at large. Insurers should also examine their rates of false negatives and false positives for predictions and conduct analyses to determine whether those rates differ significantly on the basis of race, ethnicity or gender.

Counterfactual reasoning, the researchers posit, can also be used to consider if a person would’ve received a different prediction if they were a member of a different subpopulation despite their health profile.

Addressing biases in machine learning models can determine whether members receive high-quality care. The analysis notes the importance of payers collecting data on social determinants of health and using those data ethically, as well as working across the industry to reduce barriers to care to ensure these technologies aim to tackle health disparities rather than exacerbate them.

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Jessie McCormick had to quit her job to afford health care. Ms. McCormick, 27, who has a heart condition, had an opportunity to move from part time to full time in her job at a small nonprofit in Washington. Working full time would qualify her for the firm’s health plan. 

But she calculated that her out-of-pocket costs would be at least $1,200 per month, about double the money she had left after paying her rent and utilities. Instead, she quit her job last summer so her income would be low enough to enroll in Medicaid, which will cover all her medical expenses. “I’m trying to do some side jobs,” she said.

Employers remain the main source of health insurance in the United States, covering about 153 million people. But premiums and deductibles are pushing employer-based coverage increasingly out of reach, according to a new analysis released Wednesday by the Kaiser Family Foundation, which conducts a survey of employers every year. 

The average premium paid by the employer and the employee for a family plan now tops $20,000 a year, with the worker contributing about $6,000, according to the survey. More than a quarter of all covered workers and nearly half of those working for small businesses face an annual deductible of $2,000 or more.

The new data on employer coverage come as the Democratic presidential candidates’ debate sweeping reforms to diminish the role of private insurance in the American health system, including expanding the federal Medicare program to everyone or giving people the option to enroll in a government-run plan. 

Many of the arguments for both systems center on expanding health insurance to more of the estimated 27 million people who lack it. But millions of people who already have coverage are deeply dissatisfied with the current system as well.

“For some reason, we like to focus on coverage when the issue for workers, people and the public generally is cost,” said Drew Altman, the chief executive of the foundation. About 2,000 small and large businesses responded in detail to the survey. Small employers in particular, and their workers, are struggling. 

“Health insurance in the United States is incredibly prohibitive for small businesses,” said Shalin Madan, the founder of a small investment advisory firm in Florida. He is not required to provide health insurance to his workers, because his business is too small, and he outsources much of the work.

A policy for his own family, he said, runs about $2,000 a month ($24,000 per year), with a $13,000 deductible. “I’m out $37,000 before I see a return on investment, if you will,” Mr. Madan said.

A recent Wall Street Journal/NBC News poll found that a majority of registered voters, 56 percent, are opposed to the idea of a government-run system like Medicare-for-all that would replace private insurance. But Mr. Madan said the current system results in a schism between those who have good employer coverage and those who do not. “I had phenomenal health insurance being employed,” said Mr. Madan of his time working for a larger corporation. 

One of Senator Elizabeth Warren’s applause lines on the Democratic presidential campaign trail is that no one likes their insurance company. But employer coverage “isn’t monolithic,” said Mr. Altman. While some people, usually higher-paid professionals or union members, enjoy generous coverage from their job, people making $25,000 or less — about 36 million Americans — are the most likely to be priced out of coverage, he said.

People who work at companies where a large share of the employees are low-wage workers pay an average of $7,000 annually for a family plan, according to the survey, about $1,000 more than those working at companies made up of better-paid workers.

Only one in three of these workers is enrolled in an employer’s plan, about half the rate at better-paying companies. “This is a group that really deserves a lot more attention,” Mr. Altman said.

While some low-wage workers may qualify for Medicaid in states that expanded it under the Affordable Care Act, those with private insurance who are not eligible for government help are having a more difficult time affording care, said Dr. Benjamin Sommers, a health economist at the Harvard T.H. Chan School of Public Health.

“The arc of the A.C.A. really tried, and largely succeeded, in leaving the employer market as is,” he said. For many businesses, it’s a Sophie’s choice between raising an employee’s share of premiums or increasing the size of the deductible. 

“I try to keep the benefits pretty much the same,” said Joel Sturm, chief operating officer of the New York College of Podiatric Medicine. The majority of workers are in a plan that comes with a deductible of $1,000 for an individual and asks them to pay about 10 percent of their medical bills. “It doesn’t kill them if they go,” Mr. Sturm said.

But the employees must pay a hefty share of the overall premiums, about $950 a month for a couple. Some employees have quit as a result of having so much taken out of their paycheck and still having to cover some out-of-pocket costs, Mr. Sturm said. “They’d rather be unemployed than have very little take-home pay,” he said, adding that Medicaid can seem like a more attractive option.

Many businesses have opted to increase deductibles instead of premiums. “A lot of employers with lower-paid employees want to offer a low-cost option that is typically a high-deductible plan,” said Chris Bartnik, a senior vice president at Lockton Companies who advises businesses on their coverage.

But some of his clients who once embraced high deductibles have changed their minds, worried their workers can’t afford to go to the doctor. Some large employers are adjusting the premiums and deductibles based on an employee’s income. JPMorgan Chase pays 80 percent of the premiums for workers making under $60,000, and the company lowered the annual deductible by $750 to $2,000 or less, depending on the plan they choose.  (JPMorgan Chase is also part of the trio of big corporations behind Haven, a new venture trying to reinvent employer-based coverage.)

H.A. Cover & Son Lumber, in Thayer, Mo., has decided to pay the bulk of premiums for workers, but the plans come with a deductible of $2,500 for an individual and $5,000 for a family. The company is paying about $16,000 a month to cover the 11 people enrolled in the plan.

The deductible “is higher than we wanted to go,” said Marion Cowen, who oversees benefits for the business, but the cost for more comprehensive coverage was prohibitive. “We don’t know what we’re going to do if it goes up much more,” she said.

She is intrigued by the idea of being allowed to buy into a government plan, like Medicaid or Medicare, that is being floated by some of the candidates. “We would consider it, yes, we would,” she said, if the option saved money and provided employees with high-quality coverage.

The Wall Street Journal/NBC News poll found that about two-thirds of voters supported the idea of allowing people to buy into Medicare. “Some states are looking at a public option,” said David Chase, who leads the national outreach efforts for Small Business Majority, an advocacy group that supported the Affordable Care Act. He said the group is talking to various states about allowing small businesses the option of buying into a government program. 

“There are a lot of hypothetical proposals out there,” said Neil Trautwein, vice president of health care policy at the National Retail Federation, who said his members are increasingly concerned about rising health care costs. Companies are not as keen on offering less generous plans, he said, but would be open to other alternatives. 

At Bagel Grove in Utica, N.Y., most of the 20 employees are now covered by Medicaid, said Anne Wadsworth, one of the owners. She took advantage of the tax credits available to small businesses that helped pay for the cost of coverage under the Affordable Care Act, but the credits ran out. While she still covers 45 percent of the premiums, all but one of her employees, herself included, have found better plans on their own. 

“I was all on board for Obamacare,” she said, but it proved not to be “a long-term solution. It doesn’t lower the costs for people.”

Ms. Wadsworth is wary of the sweeping plans now proposed by the Democratic presidential candidates, which she worries will become a political football, like the Affordable Care Act, and fail to address the underlying issues. 

“I just think health care costs need to go down,” she said.

One health plan from a well-known insurer promises lower premiums but warns that consumers may need to file their own claims and negotiate over charges from hospitals and doctors. Another does away with annual deductibles but requires policyholders to pay extra if they need certain surgeries and procedures.

Both are among the latest efforts in a seemingly endless quest by employers, consumers and insurers for the holy grail: less expensive coverage.

Premiums are 15 to 30 percent lower than conventional offerings, but the plans put a larger burden on consumers to be savvy shoppers. Even with those concerns, the offerings tap into a common underlying frustration.

“Traditional health plans have not been able to stem high cost increases, so people are tearing down the model and trying something different,” said Jeff Levin-Scherz, health management practice leader for benefit consultants Willis Towers Watson.

New types of insurance plans are sprouting up as employers face rising health care costs and individuals who buy their own coverage without an Affordable Care Act subsidy struggle to pay premiums. That has led some people to experiment with new ways to pay their medical expenses, such as short-term policies or alternatives like Christian sharing ministries, which are not insurance at all, but rather cooperatives where members pay one another’s bills.

Now some insurers — such as Blue Cross Blue Shield of North Carolina and a Minnesota startup called Bind Benefits, which is partnering with UnitedHealth Group — are coming up with their own novel offerings.

Insurers say the two new types of plans meet the ACA’s rules, although they interpret those rules in new ways. For example, the new policies avoid the federal law’s rule limiting consumers’ annual in-network limit on out-of-pocket costs: one by having no network and the other by calling additional charges premiums, which don’t count toward the out-of-pocket maximum.

But each plan could leave patients with huge costs in a system where it is extremely difficult for a patient to be a smart shopper — in part, because they have little negotiating power against big hospital systems and partly because illness is often urgent and unpredicted.

If the plans prompt doctors and hospitals to lower prices, “then that is worth taking a closer look,” said Sabrina Corlette, a research professor at Georgetown University’s Health Policy Institute. “But if it’s simply another flavor of shifting more risk to employees, I don’t think in the long term that’s going to bend the cost curve.”

Balancing Freedom, Control And Responsibility

The North Carolina Blue Cross Blue Shield “My Choice” policies aim to change the way doctors and hospitals are paid by limiting reimbursement for services to 40 percent above what Medicare would pay. The plan has no network of doctors and hospitals.

This approach “puts you in control to see the doctor you want,” the insurer says on its website. The plan is available to individuals who buy their own insurance and small businesses with one to 50 employees, aiming particularly at those who cannot afford ACA plans, said Austin Vevurka, a spokesman for the insurer. The policies are not sold on the ACA’s insurance marketplace but can be purchased off-exchange from brokers.

With that freedom, however, consumers also have the responsibility to shop around for providers who will accept that amount. Those who don’t shop, or can’t because it’s an emergency, may get “balance-billed” by providers unsatisfied with the flat amount the plan pays.

“There’s an incentive to comparison shop, to find a provider who accepts the benefit,” said Vevurka.

The cost of balance bills could range widely but could be thousands of dollars in the case of hospital care. Consumer exposure to balance bills is not capped by the ACA for out-of-network care.

“There are a lot of people for whom a plan like this would present financial risk,” said Levin-Scherz.

In theory, though, paying 40 percent above Medicare rates could help drive down costs over time if enough providers accept those payments. That’s because hospitals currently get about double Medicare rates through their negotiations with insurers.

“It’s a bold move,” said Mark Hall, director of the Health Law and Policy Program at Wake Forest University in North Carolina. Still, he said, it’s “not an optimal way” because patients generally don’t want to negotiate with their doctor on prices.

“But it’s an innovative way to put matters into the hands of patients as consumers,” said Hall. “Let them deal directly with providers who insist on charging more than 140 percent of Medicare.”

Blue Cross spokesman Vevurka said My Choice has telephone advisers to help patients find providers and offer tips on how to negotiate a balance bill. He would not disclose enrollment numbers for My Choice, which launched Jan. 1, nor would he say how many providers have indicated they will accept the payments.

Still, the idea — based on what is sometimes called “reference pricing” or “Medicare plus” — is gaining attention.

North Carolina’s state treasurer, for example, hopes to put state workers into such a pricing plan by next year, offering to pay 177 percent of Medicare. The plan has ignited a firestorm from hospitals.

Montana recently got its hospitals to agree to such a plan for state workers, paying 234 percent of Medicare on average.

Partly because of concerns about balance billing, employers aren’t rushing to buy into Medicare-plus pricing just yet, said Jeff Long, a health care actuary at Lockton Companies, a benefit consultancy.

Wider adoption, however, could spell its end.

Hospitals might agree to participate in a few such programs, but “if there’s more take-up on this, I see hospitals possibly starting to fight back,” Long said.

What About The Bind?

Minnesota startup Bind Benefits eliminates annual deductibles in its “on-demand” plans sold to employers who are opting to self-insure their workers’ health costs. Rather than deductibles, patients pay flat-dollar copayments for a core set of medical services, from doctor visits to prescription drugs.

In some ways, it’s simpler: no need to spend through the deductible before coverage kicks in or wonder what 20 percent of the cost of a doctor visit or surgery would be.

But not everything is included.

Patients who discover during the year that they need any of about 30 common procedures outlined in the plan, including several types of back surgery, knee arthroscopy or coronary artery bypass, must “add in” coverage, spread out over time in deductions from their paychecks.

“People are used to that concept, to buy what they need,” said Bind’s CEO, Tony Miller. “When I need more, I buy more.”

According to a company spokeswoman, the add-in costs vary by market, procedure and provider. Less than 7 percent of members should need add-in services in any given year, Bind estimates.

On the lower end, the cost for tonsillectomy and adenoidectomy ranges from $900 to $3,000, while lumbar spine fusion could range from $5,000 to $10,000.

To set those additional premiums, Bind analyzes how much doctors and facilities are paid, along with some quality measures from several sources, including UnitedHealth. The add-in premiums paid by patients then vary depending on whether they choose lower-cost providers or more expensive ones.

The ACA’s out-of-pocket maximums — $7,900 for an individual or $15,800 for a family — don’t include premium costs.

The Cumberland School District in Wisconsin switched from a traditional plan, which it purchased from an insurer for about $1.7 million last year, to Bind. Six months in, Superintendent Barry Rose said, it is working well.

Right off the bat, he said, the district saved about $200,000. More savings could come over the year if workers choose lower-cost alternatives for the “add-in” services.

“They can become better consumers because they can see exactly what they’re paying for care,” Rose said.

Levin-Scherz at Willis Towers said the idea behind Bind is intriguing but raises some issues for employers.

What happens, he asked, if a worker has an add-in surgery, owes several thousand dollars, then changes jobs before paying all the premiums for that add-in coverage? “Will the employee be sent a bill after leaving?” he said.

Mar. 13, 2019