Concerns Rising About Drug Management In HDHPs

Cost of medications a top concern for HDHP sponsors | BenefitsPRO

Source: BenefitsPRO, by Scott Wooldridge

Companies that offer high-deductible health plans (HDHPs) are seeing significant dissatisfaction from employees when it comes to drug utilization management, a new report has found. The report also noted that employer sponsors of HDHPs are paying attention to this dissatisfaction, as well as developments such as the Great Resignation, when it comes to designing benefits.

The study, by Pharmaceutical Strategies Group (PSG), an EPIC company and sponsored by RX Savings Solutions (RxSS), is called the Trends in Drug Benefits Report. For the report, PSG surveyed 153 benefits leaders, representing plan sponsors of an estimated 35.1 million covered lives.

Dissatisfaction seen from enrollees

The study outlined some possibly troubling developments with HDHP drug management and utilization.

For example, 57% of respondents cited member acceptance as a barrier to holding down costs and managing pharmacy benefits. Part of what might be driving the lack of support is the use of formulary exclusions. The use of such exclusions—which are intended to hold down overall pharmacy costs but can aggravate plan members who have to find alternatives—is highly unpopular, the study found. A large percentage of respondents, 69%, said member dissatisfaction was their top challenge with formulary exclusions. And that’s a problem, since 81% of companies in the survey said their plans had formulary exclusions.

Other problems with HDHPs and drug coverage, according to the survey, was lack of affordability before the plan’s deductible was met (22% of respondents), and lack of member understanding in using HDHPs (19%).

The employers’ viewpoint

Perhaps because of member dissatisfaction, plan sponsors have become less positive about HDHPs. “Thought the majority of respondents reported offering a HDHP, they expressed mixed views on whether these plans achieve their advertised aims,” the study said. “Only 35% of respondents agreed or strongly agreed that HDHPs are an effective way to manage overall drug trend. A somewhat larger percentage (51%) agreed or strongly agreed that HDHPs are an effective way to help members become better health care consumers and make wiser medication choices.”

The report added that these responses have changed since the last survey in 2018. In that study, 41% of respondents thought HDHPs helped manage drug trend (pharmaceutical costs to members) and 58% said HDHPs helped members become better health care consumers.

The study also found that companies that sponsor health plans seem to be paying attention to the concerns of their employees. The survey showed that 41% of respondents said the importance of member experience has increased somewhat or greatly since the start of the COVID-19 pandemic. A smaller number, 27%, reported that the Great Resignation has impacted their benefit strategy.

“Plan designs evolve, solutions come and go, and priorities shift. At the end of the day, consumers shoulder an increasingly unsustainable share of medical and pharmacy costs,” said Michael Rea, PharmD, founder and CEO of RxSS. “The research conducted by PSG will help inform drug benefit design decisions that work toward an elusive but important goal, one that is underscored by the impact of COVID-19 and the Great Resignation.”

For ACA Enrollees, How Much Premiums Rise Next Year is Mostly up to Congress

For ACA Enrollees, How Much Premiums Rise Next Year is Mostly up to Congress  | KFF

Source: Kaiser Family Foundation, by Cynthia Cox and Krutika Amin

Health insurers are now submitting to state regulators proposed 2023 premiums for plans offered on the Affordable Care Act (ACA) Marketplaces. Changes in these unsubsidized premiums attract a lot of attention, but what really matters most to the people buying coverage is how much they pay out of their own pockets. And the amount ACA Marketplace enrollees pay is largely determined by the size of their premium tax credit. Generally speaking, when unsubsidized premiums rise, so do the premium tax credits, meaning out-of-pocket premium payments hold mostly steady for people getting financial assistance.

For just over a year, ACA Marketplace enrollees have benefited from enhanced tax credits under the American Rescue Plan Act (ARPA), which Congress passed as temporary pandemic relief. The enhanced assistance lowers out-of-pocket premiums substantially, and millions of enrollees saw their premium payments cut in half by these extra subsidies. ACA Marketplace signups reached a record high of 14.5 million people in 2022, including nearly 13 million people who received tax credits to lower their premiums.

Soon, the vast majority of these nearly 13 million people will see their premium payments rise if the ARPA subsidies expire, as they are set to at the end of this year.

The ARPA subsidies were enacted temporarily for 2021 and 2022 as pandemic relief, but congressional Democrats are considering extending or making the expanded subsidies permanent as a way of building on the ACA, as President Biden had proposed during his 2020 campaign. If Congress does not extend the subsidies, out-of-pocket premium payments will return to their pre-ARPA levels, which would be seen as a significant premium increase to millions of subsidized enrollees. In the 33 states using HealthCare.gov, premium payments in 2022 would have been 53% higher on average if not for the ARPA extra subsidies. The same is true in the states operating their own exchanges. In New York, for example, premiums for tax credit-eligible consumers would be 58% higher if not for the ARPA. Such an increase in out-of-pocket premium payments would be the largest ever seen by the millions receiving a subsidy. Exactly how much of a premium increase enrollees would see depends on their income, age, the premiums where they live, and how the premiums charged by insurers change for next year.

For states, the timing of Congressional action on ARPA subsidies matters both for rate review and state enrollment systems. State-based exchanges – as well as the federal government, which operates HealthCare.gov – will need to reprogram their enrollment websites and train consumer support staff on policy changes ahead of open enrollment in November. States will start making these changes as soon as this month. Additionally, as insurers submit premiums for review, state insurance commissioners and other regulators must assess the reasonableness of 2023 rates, and some of that determination will depend on the future of ARPA subsidies. The non-partisan National Association of Insurance Commissioners (NAIC) wrote to Congress asking for clarity on the future of ARPA subsidies by July.

For insurers, the timing matters because 2023 premiums get locked in later this summer. Last summer, when insurers were setting their 2022 premiums, some said the ARPA had a slight downward effect on their premiums, based on the risk profile of enrollees. Insurers are now in the process of setting 2023 premiums and some might factor in an upward effect on premiums if they expect ARPA subsidies to expire. Premiums for 2023 are locked in by this August, so if Congress does not act before its August recess, whatever assumptions insurers make about the future of ARPA subsidies will be locked in to their 2023 premiums. Additionally, although this is not necessarily at the same scale of the uncertainty seen in 2017 surrounding the ACA repeal and replace debates (when many insurers explicitly said that uncertainty was driving their premiums up), it is possible that some insurers will price 2023 plans a bit higher than they otherwise would, simply because of uncertainty around the future of the ARPA’s enhanced subsidies. The NAIC letter to Congress warned that “uncertainty may lead to higher than necessary premiums.”

For enrollees, the timing matters both for knowing how much they will pay and for maintaining continuous coverageNearly all of the 13 million subsidized enrollees will see their out-of-pocket premium payments rise if the ARPA subsidies expire. But if the subsidies are renewed by Congress, but not until the end of the year right before subsidies are set to expire, there could still be a disruption if states and the federal government do not have enough lead time to update their enrollment websites to reflect the enhanced subsidies. In this scenario, the millions of enrollees who currently have access to $0 premium Marketplace plans might have to pay a premium in January – putting them at risk of losing coverage due to non-payment. Similarly, middle-income enrollees might temporarily lose access to advanced payments of the tax credit in the month of January, making it unaffordable for them to maintain coverage.

Congress’s action or inaction on ARPA subsidies will have a much greater influence over how much subsidized ACA Marketplace enrollees pay for their premiums than will market-driven factors that affect the unsubsidized premium. Even if unsubsidized premiums hold steady going into 2023, the expiration of ARPA subsidies would result in the steepest increase in out-of-pocket premium payments that most enrollees in this market have seen. This would essentially be a return to pre-pandemic normal, but the millions of new enrollees and others who have received temporary premium relief may not see it that way.

How Medicare Advantage Plans Can Increase Consumer Satisfaction

Medicare Advantage plans are more likely to achieve high satisfaction scores when they offer a consistent product message and brand experience and have control over the delivery of care, according to a J.D. Power study. Members frequently choose a plan they understand and find easy to work with. The study measures member satisfaction with Medicare Advantage plans based on six factors in order of importance: coverage and benefits (26%); customer service (20%); provider choice (15%); cost (14%); information and communication (13%); and claims processing (13%).

Improving communications with enrollees is one of the greatest opportunities for health plans to improve member satisfaction. It’s the only factor in the study that has not seen a significant improvement in member satisfaction. Valerie Monet, director of the insurance practice at J.D. Power, said that many plans have multiple product design features and come with technical manuals that are 20 pages or longer. Expecting members to be experts on these services and benefits is a losing battle for the plan and the member. Members expect their plan to provide guidance, ranging from assistance in selecting a doctor to helping them understand prescription costs.

Forty-eight percent of members agree strongly that their health plan is a trusted partner in their health and wellness, which increases satisfaction by 166 points. Satisfaction is 136 points higher among the 89% of members who completely understand how to find a doctor under the plan. Satisfaction is 110 points higher among the 88% of members who say their doctor spends the right amount of time with them.

Members expect immediate attention or advice when they call their health plan provider. Forty-one percent of those who called their plan had to give the same information more than once to get their issue resolved. Only 35% of members said that customer service provided all of the information they needed on the costs of prescription medications. Ninety-one percent of customers who are delighted with their Medicare Advantage plan (satisfaction scores of 901 or higher), say they will definitely renew their policy, and 89% will definitely recommend their plan to family and friends. Loyalty drops to 71% and advocacy to 66% among members who are pleased with their plan (scores of 751-900). Plans garnered the following member-satisfaction scores:

  • Kaiser Permanente 851
  • Highmark 791
  • Humana 782
  • UnitedHealthcare 775
  • Cigna 774
  • Aetna 773
  • Anthem 765
  • Health Net 756
  • WellCare 742

In 2016, members reported an average increase of $117 in annual premiums to $1,497. They also have more out-of-pocket expenses. On average, member deductibles are $1,705 in 2016, a $310 jump from 2015. Satisfaction is 136 points higher when members completely understand their out-of-pocket costs. Monet said that members are more satisfied and see the value of their plan when they have a better understanding of how much they are paying and what the costs cover.” For more information visit http://www.jdpower.com/resource/us-medicare-advantage-study.

Medical Marijuana Reduces Medicare Part D Drugs Costs

 BY  IN INSURANCE INSIDER NEWSLETTER

medical marijuana

Medical marijuana saves state and federal governments millions of dollars on Medicare. For example, prescriptions for painkillers have dipped drastically in states where medical marijuana is available, according to a Univ. of Georgia study published in the July issue of Health Affairs. Researchers combed through data on all prescriptions filled by Medicare Part D enrollees from 2010 to 2013 for a total of over 87 million physician-drug-year observations. In medical marijuana–approved states, the average doctor prescribed fewer doses of antidepressants as well as seizure and anti-nausea medication. Researchers narrowed the results to conditions for which marijuana may be an alternative treatment, selecting nine categories in which the Food and Drug Administration had already approved at least one medication: anxiety, depression, glaucoma, nausea, pain, psychosis, seizures, sleep disorders, and spasticity.

In 2013, Medicare saved $165.2 million in lower prescription drug use when 17 states and the District of Columbia implemented medical marijuana laws. The results suggest that if all states had implemented medical marijuana, Medicare would have saved about $468 million. “The results suggest people are really using marijuana as medicine and not just using it for recreational purposes,” said study author Ashley Bradford.

The next study will look at medical marijuana’s effects on Medicaid. Researchers expect the cost savings to be repeated, saying their findings suggests that more widespread state approval of medical marijuana could provide modest budgetary relief.

Medicare Advantage 2016 Spotlight

medicareadvantage


The number of Medicare beneficiaries enrolled in Medicare Advantage has climbed steadily over the past decade; this trend in enrollment growth continues in 2016. The enrollment growth has occurred despite provisions under the ACA that reduce payments to plans. As of 2016, the payment reductions have been phased in fully in 78% of counties, accounting for 70% of beneficiaries and 68% of Medicare Advantage enrollees, according to a study by the Kaiser Family Foundation. The following are study highlights:

  • Medicare Advantage enrollment has increased in virtually all states over the past year. Almost one in three people on Medicare (31% or 17.6 million beneficiaries) is enrolled in a Medicare Advantage plan in 2016. The penetration rate exceeds 40% in five states.
  • 18% of enrollees are in a group plan. Employers and their retirees still favor local PPOs over HMOs.
  • Enrollment is still highly concentrated. If Aetna acquired Humana with no divestitures in 2016, the combined firm would account for 25% of Medicare Advantage enrollees nationwide. UnitedHealthcare and Humana account for 39% of enrollment in 2016.
  • Premiums were relatively constant from 2015 to 2016 ($37 a month in 2016 versus $38 a month in 2015), although premiums vary widely across states, counties, and plan types.
  • In 2016, the average enrollee had an out-of-pocket limit of $5,223, which is nearly $1,000 higher than in 2011.
  • 31% of the Medicare population is enrolled in a Medicare Advantage plan. Total Medicare Advantage enrollment grew 5%, from 2015 to 2016. This reflects the influence of seniors aging on to Medicare and beneficiaries shifting from traditional Medicare to Medicare Advantage.
  • 64% of Medicare Advantage enrollees are in HMOs; 23% are in local PPOs; 7% are in regional PPOs; 1% are in private fee-for-service plans; and 4% are in other types of plans including cost plans and Medicare medical savings accounts.
  • Enrollment in private fee-for-service plans has declined slowly since the Medicare Improvements for Patients & Providers Act (MIPPA) of 2008. Under the law, in most parts of the country, private fee-for-service plans must have a provider network. About 1% of Medicare Advantage enrollees are in these plans. 26% of enrollees in private fee-for-service plans are in counties in which private fee-for-service plans are exempt from network requirements.
  • Medicare Advantage enrollment in California grew 6% from 2015 to 2016.
  • 44% of beneficiaries in Los Angeles County, California are enrolled in Medicare Advantage plans compared to only 11% of beneficiaries in Santa Cruz County, California.
  • The average MA prescription drug enrollee pays a monthly premium of about $37, which is 1% less than in 2015. Actual premiums are $28 a month for HMOs, $63 a month for local PPOs, and $76 a month for private fee-for-service plans. Average Medicare Advantage premiums for HMOs and local PPOs have decreased since the ACA was enacted while average premiums have increased for regional PPOs and private fee-for-service plans.
  • In 2016, 81% of Medicare beneficiaries had a choice of at least one zero premium MA prescription drug plan. From 2015 to 2016, the share of enrollees in zero premium MA prescription drug benefits remained relatively unchanged (48% in 2015 versus 49% in 2016). Fifty-nine percent of HMO enrollees are in zero premium plans; 38% are in regional PPOs; and 22% are in local PPOs. No zero premium private fee-for-service plans plans were offered in 2015 or 2016.
  • The average out-of-pocket limit for a MA prescription drug enrollee is $5,223, up from $5,041 in 2015 and $4,313 in 2011. The share of enrollees in plans with limits above $5,000 has greatly increased across all plan types. Fifty-two percent of enrollees are in plans with limits above $5,000 in 2016 compared to 46% in 2015. Thirty-seven percent of enrollees in 2016 are in plans with limits at the $6,700 maximum, compared to 32% in 2015 and 17% in 2011. Ninety-nine percent of regional PPO enrollees and 62% of local PPO enrollees are in plans with limits above $5,000 in 2016. In comparison, 45% of HMO enrollees are in plans with limits above $5,000 in 2016.
  • The standard Medicare Part D plan has a $360 drug deductible and 25% coinsurance up to an initial coverage limit of $3,310. That is followed by a coverage gap (the doughnut hole) in which beneficiaries pay a larger share until their total out-of-pocket Part D spending reaches $4,850. After exceeding this catastrophic threshold, beneficiaries pay 5% of the cost of drugs.
  • 95% of Kaiser Permanente’s enrollees are in HMOs. In contrast, enrollment in UnitedHealthcare and Humana plans is mostly in HMOs, but includes significant shares in local and regional PPOs. Humana’s distribution continues the shift from earlier years when a much larger share of Humana’s enrollees was in private fee-for-service plans plans. Enrollment in BCBS plans is split between HMOs (46%) and local PPOs (41%), with the remainder in regional PPOs and other plan types including private fee-for-service plans plans.
  • Kaiser Permanente’s presence is more geographically focused than other major national employers, with a heavy concentration in California, Colorado, the District of Columbia and Maryland.
  • Medicare Advantage enrollment could become more concentrated if Aetna’s acquisition of Humana and Anthem’s acquisition of Cigna are approved, particularly if few divestitures are required. If no divestitures are required in Aetna’s acquisition of Humana, the combined company would account for 25% of Medicare Advantage enrollment nationwide. UnitedHealthcare accounts for 21% of enrollment this year.
  • The Anthem’s acquisition of Cigna would have a less visible affect on the national Medicare Advantage market. Nationwide, Anthem accounts for 3% of Medicare Advantage enrollment and Cigna accounts for another 3%.
  • For many years, CMS has posted quality ratings for Medicare Advantage plans. In 2016, 68% of plans had four or more stars. In focus groups, seniors have said that they don’t use the star ratings to select a plan. Nonetheless, the star ratings may be correlated with factors that seniors do use to select their plan, including provider networks, and plan benefits and costs, and thus may be correlated with enrollment.
  • The Congressional Budget Office projects that about 41% of Medicare beneficiaries will be enrolled in Medicare Advantage in 2026. This growth may prompt some to question what it will mean if the preponderance of beneficiaries are in Medicare Advantage plans.

Obamacare Enrollees Face Growing Out-of-Pocket Costs

 

StethoscopeObamacare enrollees were already warned to prepare for double-digit rate hikes. Now, the structure of Obamacare’s tax credits is ratcheting up the out-of-pocket costs of premiums – especially for the lowest earning enrollees, according to a report by National Center for Policy Analysis senior fellow John Graham. “This ratchet effect on the out-of-pocket cost of premiums is greatest for the lowest earning enrollees [who are] only slightly above the federal poverty level. Some of them will see hikes of 50% or more. What’s behind this ratchet effect? Obamacare’s tax credits are determined by an enrollee’s income and the second-least expensive Silver plan in the locating region. This introduces harmful leverage into most enrollees’ renewal, which can increase the net premium by a significantly higher percentage than the increase in gross premiums. If every single enrollee who chose the second-lowest cost Silver plan in 2015 took the time to shop around and found the second-lowest cost Silver plan, which is usually different, the average gross premium hike would be 7.5%. This is an unlikely, best-case scenario, given enrollees’ behavior renewing from 2014 to 2015,” says Graham.

Numerous reports of double-digit rate hikes in Obamacare’s health insurance exchanges understate the increases most consumers are facing. The gross premium for the average Silver plan increased 10%. However, the subscriber earning 150% of the Federal Poverty Level has seen a 28% increase in net premium. “This is because of the perverse way tax credits are allocated to insurers in the exchanges. This ratchet effect explains why subscribers are more outraged by premium hikes than Obamacare’s advocates appreciate,” says Graham.

Medigap Continues to Provide Critical Financial Protection

Medicare supplement (Medigap) insurance remains a critical source of health coverage for low-income beneficiaries, particularly those living in rural areas, according to a  report from America’s Health Insurance Plans (AHIP). Enrollment has continued to grow over the past several years with more than 11 million Medicare beneficiaries enrolled in 2014. Medigap coverage helps cover significant out-of-pocket costs that are not covered by Medicare, such as deductibles, coinsurance, and copayments. As a result, Medigap beneficiaries are overwhelmingly satisfied with their coverage, and more than 9 in 10 would recommend Medigap to a friend or relative. The follow are key findings:

  • 48% of Medicare beneficiaries without any additional insurance coverage had Medigap policies in 2013.
  • 58% of Medigap policyholders in 2013 were women, and 42% were men.
  • 45% of Medigap policyholders were 75 years or older compared to only 38% of all Medicare beneficiaries.
  • 46% of rural Medigap policyholders and 39% of all Medigap enrollees had annual incomes below $30,000 in 2013.

High-Deductible Health Plans Don’t Actually Increase Consumerism

HighDeductible2

High-deductible health plans (HDHPs) are associated with lower health care spending, but not because consumers are shopping around for healthcare, according to a study published in the Journal of the American Medical Assn. (JAMA). Health insurance claims data indicates that these savings are due primarily to decreased use of care, and not because HDHP enrollees are switching to lower-cost providers. Enrollees in HDHPs are no more likely than those in traditional plans to consider switching their health care provider or comparing out-of-pocket cost among health care providers.

Researchers surveyed a nationally representative sample of insured adults from 18 to 64 who used medical care in the past year. They compared enrollees in HDHPs  with those in traditional plans on how much they shopped for care. The study found the following:

  • High-deductible health plan enrollment is higher among whites, those employed, those with more education, and those with higher incomes.
  • 60% of HDHP enrollees say there are large differences in prices and quality among health care providers.
  • 17% say that higher price physicians provide better care.
  • 71% say that out-of-pocket costs are important when choosing a doctor. These perceptions are not significantly different from those in traditional plans. HDHP enrollees are less likely to say that higher price facilities provide better care. They are more likely to say that out-of-pocket costs are important in choice of radiology facility.
  • 56% of HDHP enrollees say they would use additional sources of health care price information if available.

To encourage price shopping, consumers need more price information. Also, the market needs innovative approaches to get enrollees to take advantage of pricing information, according to researchers.

Covered California Enrollees Struggle With Premiums, but Like Coverage

Covered Calif. Enrollees Struggle With Premiums, but Like Coverage
More than 40% of Covered California enrollees struggle to pay their monthly insurance premiums, but many are satisfied with their coverage, according to a survey by the Kaiser Family Foundation. Forty-four percent of Covered California enrollees had a hard time affording their monthly premiums compared to 25% of adults with employer-sponsored or other private coverage. More than one-third of newly insured respondents delayed or skipped care because of cost. About 25% of Covered California enrollees said their medical bills were higher than expected. However, 84% said they had no problems paying their bills.

Seventy-four percent of Covered California enrollees said their coverage was excellent or good compared to 88% of consumers with non-exchange private insurance plans. Ninety-one percent of consumers with exchange coverage said it was easy to get care from their normal source.

Poll finds higher satisfaction with MA than Medicare

Eighty-eight percent of seniors with Medicare Advantage plans and 85% with conventional Medicare said they are satisfied with their coverage. Eighty percent of the survey respondents said they are satisfied with overall Medicare Advantage plan costs, compared with 68% of conventional Medicare enrollees. Satisfaction with preventive care coverage, simplicity and other metrics was also higher among MA enrollees. The Morning Consult (3/30)

Last Updated 08/10/2022

Arch Apple Financial Services | Individual & Family Health Plans, Affordable Care California, Group Medical Insurance, California Health Insurance Exchange Marketplace, Medicare Supplements, HMO & PPO Health Care Plans, Long Term Care & Disability Insurance, Life Insurance, Dental Insurance, Vision Insurance, Employee Benefits, Affordable Care Act Assistance, Health Benefits Exchange, Buy Health Insurance, Health Care Reform Plans, Insurance Agency, Westminster, Costa Mesa, Huntington Beach, Fountain Valley, Irvine, Santa Ana, Tustin, Aliso Viejo, Laguna Hills, Laguna Beach, Laguna Woods, Long Beach, Orange, Tustin Foothills, Seal Beach, Anaheim, Newport Beach, Yorba Linda, Placentia, Brea, La Habra, Orange County CA

12312 Pentagon Street - Garden Grove, CA 92841-3327 - Tel: 714.638.0853 - 800.731.2590
Email:
Jay@ArchApple.com
Copyright @ 2015 - Website Design and Search Engine Optimization by Blitz Mogul