High-Deductible Health Plans Don’t Actually Increase Consumerism


HighDeductible2High-Deductible Health Plans Don’t Actually Increase Consumerism

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. For more information visit JAMA.

Health Costs for Older Singles vs. Couples

During a two-year period, single and couple households ages 65 and older spent an average of $2,500 per-person on out-of-pocket costs for recurring health care services. Recurring services include doctor visits, dentist visits, and prescription drugs, according to the study by the Employee Benefit Research Institute (EBRI). However, there are large differences in non-recurring health care spending between older singles and older couples. This includes overnight hospital stays, outpatient surgery, home health care, nursing home stays, and other services. Singles 85 and older spent and average of $13,355 on non-recurring health care while couples 85 and older spent and average of $8,530 during the two-year period. Some of the largest differences involve home health care and nursing home expenses. For more information, visit ebri.org.

CMS Undermines Medicare Advantage Chronic Care 

CMS underestimates costs for people with multiple chronic conditions to the tune of  $2.6 billion annually, according to a study by Avalere. In the spring of 2015, CMS finalized changes to the risk adjustment system, targeting chronic disease prevention programs. These changes significantly limit health plans’ early intervention efforts and seniors’ benefits. Under the risk adjustment model, CMS substantially under-predicts expenditures for providing care to beneficiaries, including those with the following conditions:

  • Chronic kidney disease.
  • Osteoarthritis.
  • Rheumatoid arthritis.
  • Alzheimer’s disease and related conditions.

AHIP president and CEO Marilyn Tavenner said, “Further cuts to Medicare Advantage and seniors’ benefits are…at odds with…delivering better care and better value for beneficiaries. Rather than relying on an antiquated fee-for-service approach…, CMS should focus on strengthening Medicare Advantage and the innovative programs that improve seniors’ health.”

Last year, more than 340 members of Congress urged CMS to protect seniors’ coverage and provide stability to the program. Ahead of the upcoming February rate notice, more than 2 million seniors from AHIP’s Coalition for Medicare Choices have mobilized, urging Washington to defend the Medicare Advantage program from further payment cuts. To view the full report, visit ahip.org.

Medicare Interactive Website 

The Medicare Rights Center launched and updated version of Medicare Interactive, an online resource with hundreds of answers to Medicare questions. Users can quickly find Medicare answers through smart links to relevant pages and case examples, a roll-over glossary, and other helpful resources. For more information, visit www.medicarerights.org.

Young People After Obamacare: Some ER Visits Down, Others Way Up

Emergency room visits for adults 19 to 25 dropped slightly after implementation of the Affordable Care Act (ACA). But visits for mental illnesses and circulatory diseases increased significantly, according to a study published online this month in the Annals of Emergency Medicine. Study author Renee Hsia, MD, of the University of California San Francisco said, “Increased health insurance coverage reduced ER visits by young people for conditions that can be treated in office-based settings, but the lack of mental health resources continues to bring these patients to the ER in ever larger numbers. We also saw an increase in patients with diseases of the circulatory system, such as non-specific chest pain. There was a big decrease in ER visits for complications of pregnancy among young people, which is important as it was among the top reasons they visited the emergency room prior to the implementation of the ACA.” For more information, visit http://www.acep.org

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.

For more information, visit www.protectmedigap.org.

CVS Caremark To Drop 31 Prescription Drugs From Formulary in 2016

California Healthline finds sobering news about drug formularies. Pharmacy benefit manager CVS Caremark next year will omit 31 additional medications from its coverage, Reuters/New York Times reports. Among the medications removed from the PBM’s formulary are some commonly used diabetes and multiple sclerosis treatments, such as:





In addition, Caremark will no longer cover the erectile dysfunction treatment Viagra or the weight-loss drug Qsymia (Reuters/New York Times, 8/6). The formulary will also exclude coverage for:

•Abilify, an anti-psychotic.

•Amitiza, used to treat irritable bowel disease.

•Cymbalta, used to treat depression.

•Diovan, used to treat high blood pressure.

•Fosrenol, used to treat kidney disease.

Most beneficiaries who would like to use the excluded drugs will likely have to pay full price. However, there could be some exceptions, such as if patients and their physicians demonstrate medical need for a particular drug or if beneficiaries’ plans have special formularies that differ from the company’s general offerings (Loftus, Wall Street Journal, 8/6).

CVS spokesperson Christine Cramer said although certain drugs were removed, the PBM will continue to cover equally effective products with lower  costs (USA , 8/6). For example, while the company will no longer cover Pfizer’s Viagra, it will cover Cialis, a different erectile dysfunction treatment sold by Eli Lilly, according to Reuters/Times, PBMs often drop drugs from their formularies if they can no longer obtain them at favorable prices (Reuters/New York Times, 8/6).

Geoffrey Porges, an analyst at Sanford C. Bernstein, said excluding medications from formularies can be a potent weapon for PBMs. He anticipates the practice will grow, with the number of drugs excluded by at least one of the two largest PBMs in the U.S. projected to increase from 130 this year to 165 in 2016. Express Scripts CMO Steve Miller noted PBMs are often able to extract over-sized discounts from the pharma manufacturers by threatening coverage exclusions (Wall Street Journal, 8/6).


Working with a Financial Advisor Doubles Retirement Preparedness

Seventy percent of Americans who work with a financial advisor are on track or are ahead in saving for retirement. That compares to  33% of those who are not working with an advisor, according to a survey by John Hancock Retirement Plan Services. More than a third of people who have an advisor have determined how much to save for retirement, and half have contributed to an IRA. Only 14% of people without an advisor know how much they need for retirement, and 16% have contributed to an IRA. Also, 58% of people with an advisor had saved for emergencies versus 26% of people who don’t have an advisor. Within a 401(k) plan, 28% of those who have an advisor were saving the maximum allowed by law, versus 13% who do not. For more information, visit www.johnhancock.com.


One in Five Consumers Never Visit or Only Go to the Dentist for Urgent Situations

Twenty percent of consumers never visit the dentist or only go when they need urgent treatment, according to a survey by FAIR Health. This statistic increases to 30% for households with annual incomes of less than $35,000 and falls to less than 10% for households with incomes of $100,000 or more.

African-Americans, Latinos, and people living in lower-income households, as well as adults with a high school diploma or less visit the dentist less frequently than other racial, ethnic or socio-economic groups. African-Americans and Latinos are more likely to say that someone in their household visited a hospital emergency room for oral healthcare in the past five years.

Eleven percent of consumers have used daily deal sites for discounted dental services or would consider using them. Millennials (ages 18-34), African-Americans, Latinos, and men express the strongest interest in using these sites. Latinos are the most likely to say that a member of their household got dental care at a community clinic in the past five years. Consumers with a high school education or less are most likely to say they would be willing to receive treatment from a dental school or community health clinic to save money. For more information, visit www.fairhealth.org.

Four Great Ways to Save Money on Dental Care as ACA Deadline Nears

The Dental Solutions Blog offers these four ways to save money on your dental care:

  • Discount Dental Plans – These are not insurance plans. They offer discounts from 20% to 50% on most dental procedures for a small monthly fee. The only requirement is that you go to a network dentist.
  • Dental Schools – They often offer free or discounted services to the public. Students are supervised by licensed dentists and are in their final years of schooling. The downside is speed. To find a dental school, visit the American Dental Association or for dental hygiene schools visit the American Hygienists’ Association.
  • Dental Clinics – Many clinics base prices on your ability to pay or have sliding fees. Most state government websites have detailed list to locate these clinics.
  • Charitable Organizations – The Give Back a Smile program and Oral Health America are great resources to help get dental care to those in need. Your local United Way is also an excellent resource.

For more information, visit edentalsolutions.com for more details.


Former Regulator Gets a Small Fine for Assisting Kaiser in Audit

An attorney who previously worked at a state regulatory agency has agreed to a fine after admitting she acted improperly during an audit of Kaiser Permanente, the Los Angeles Times reports. In September 2013, the National Union of Healthcare Workers filed a complaint against Kaiser alleging that the company hired Marcy Gallagher to impede an investigation into its practices. Gallagher previously served as an attorney with the California Department of Managed Health Care’s enforcement division. When Gallagher joined Oakland-based Kaiser, the company gained an employee with deep knowledge of how the state monitors it. She participated in at least eight reviews of Kaiser in eight years, according to Department of Managed Health Care spokeswoman Marta Green.

NUHW filed the complaint with the California Fair Political Practices Commission. Kaiser hired Gallagher in 2012 while she was investigating the organization’s health plan for mental health services access. She later served as a practice leader in Kaiser’s regulatory response business unit, according to California Healthline. Gallagher has agreed to pay a $3,000 administrative fine to the commission for violating a ban on state administrators being compensated to help firms in the same audit proceedings in which they previously had been involved. According to the commission, the fine is lower than the $5,000 maximum penalty because Gallagher cooperated with the investigation and does not have a history of violations.


Large Group Dental Plans

Security Life introduced the GemStar 1000 group dental plan. The waiting period, brochure-rated option plan comes with a $1,000 annual maximum with the opportunity to buy-up to $1,500, offers no deductible for preventative services, and features the savings benefits of the Maximum Care network. The simple, straightforward pricing and benefit structure, makes providing quotes for clients easier. For more information, visit SecurityLife.com.

Book on Leading People through Organizational Change

Dr. Julie Hodges’s book, “Managing and Leading People Through Organizational Change” addresses the individual, team, and organizational issues before, during and after change. The book includes  case studies and interviews with people from organizations in different sectors across the globe. For more information, email mmondi@koganpage.com.

Out-of-Pocket Financing

SimpleSelect Patient Finance is beta testing a finance program for patients to pay for out-of-pocket medical costs associated with a surgery, procedure, or treatment covered by their insurance policy. SimpleSelect Patient Finance is starting beta testing with select medical providers across the US with a larger roll-out expected this summer. For more information, visit SimpleSelect.com.


Life Sales Show Unprecedented Gains in 2015 U.S. Life Insurance Activity

Application activity for individually underwritten life insurance posted its largest historical year-end gain in 2015, up 2.7% year-to-date, according to the MIB Life Index. Continuing the expansion seen in the last two quarters of 2014, application activity gained momentum throughout 2015, suggesting continued growth heading into 2016. Excluding March, the MIB Life Index showed gains across every month in 2015, up 2.8% in December, year-over-year. The year 2015 rebounded to slightly below a highpoint in 2012.

For the first time in the history of the Index, the birth to 44 age group led all other age groups in year-over-year growth. Ages birth to 44 jumped 4.5% in December and finished the year up a record breaking 3.9% year-to-date; ages 45 to 59 were flat at 0.1% in December, up 0.7% year-to-date; and ages 60 were up 2% in December, up 2.3% year-to-date. The year 2015 showed a marked difference in life insurance buyer behavior. Gains for the age 60 and older group remain positive, but diminishing, with ages birth to 44 showing solid strength for five consecutive quarters. More than one-in-three American workers are Millennials (adults ages 18 to 34), according to Pew Research. “The transformative sales, underwriting, and distribution strategies insurers have been focusing on appear to be taking hold,” said Lee Oliphant, MIB Group’s Chief Executive Officer. For more information, visit www.mibgroup.com.