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General Information Updates

Study Shows Private Insurance Costs Higher with Less Provider Competition

A recent study published by the National Bureau of Economic Research sought to find an answer to the question of how to slow health spending in the US in the midst of massive consolidation. The study found that private insurance companies' premium costs were 15% higher when hospitals had a monopoly, compared to markets with at least four hospitals. The study also found that towns with two hospitals had prices that were 6% higher, and areas with three hospitals were about 5% higher than those with four or more. This indicates that private insurance spending is directly correlated to the number of options patients have, and strongly suggests that more effort is required from state and federal policymakers to promote competition in the market.

"Cadillac" Tax Pushed Back Again, Consequences Loom

Known as the "Cadillac" tax, a tax on high-end insurance plans that would impose penalties on plans deemed "overly generous" by the federal government, was postponed from January 2018 to January 2020. The tax was part of a major spending bill approved by the House in late December, and could signal the end of the law. The tax applies to 40% of employer-sponsored plans that exceed certain thresholds, and a report from the Kaiser Family Foundation estimated that about ¼ of businesses would be subject to the tax in the first year. One of the big concerns if the tax is repealed is that its check on healthcare will fall away, because employers may continue to offer Cadillac plans to attract top talent thus raising the cost of premiums for many consumers of other plans.

Multi-State Insurance Law Failing

A law requiring at least two multi-state insurance plans in all states by 2017 appears to be failing due to difficulties competing across multiple states and consumer confusion. The program aimed to boost customer choice and competition across the insurance marketplace, but insurers are finding it difficult to build networks, and offer better rates than existing insurers across states. The Office of Personnel Management (OPM) was tasked with overseeing the program, but expects that the program will not be in all states by the 2017 deadline.

Federal Rule Could Raise ER Costs for Consumers

Consumers are at risk with a federal law that doesn't prohibit a practice known as "balance billing." "Balance billing" happens when a patient visits an ER outside of their provider network, and the insurer does not pay the full amount charged, causing the balance to be billed to the consumer. Currently, if a provider does not have a contract with an insurer, they are not bound to accept the insurer's payment as their full reimbursement, and can attempt to collect the remainder from the patient. The debate remains between providers and insurers, with insurers claiming providers charge too much, and providers arguing that insurers are underpaying for services. Advocates seek to remove the consumer from the equation, as federal law mandates that emergency services must be rendered to anyone who needs them, regardless of insurance or payment ability.

Consumers Having Difficulty Finding Prescriptions While Comparing Insurance

While federal law mandates that insurers provide lists of prescription drugs included in their plans, consumers are finding it frustrating to try to determine if certain prescriptions are covered by plans while they shop the marketplace. Cancer and other chronic-illness patients in particular may struggle the most with finding details about their medications on while comparing plans, as many treatments are covered under a different part of the insurance plan and not the pharmacy benefit portion.

Proposal to Add Opioid Treatment to Essential Health Benefits

The Affordable Care Act requires all insurance plans to cover 10 health benefits considered essential, including prescription drugs and substance abuse disorder services, but does not currently require all plans to cover medical-assisted treatment (MAT) for opioid addiction. Experts and advocates are urging the CMS to mandate that all federal health plans cover MAT in the essential health benefits coverage, while several of the country's largest health insurers argue against the proposal, saying they should "not be forced to pay for the specific treatment that could curb the problem" of opioid abuse.

Colonoscopy Rates Among Men Increase Since ACA Began

Since the Affordable Care Act was enacted, studies have shown that more men are getting colonoscopies than ever before. Screening rates increased 20% from 18% to 22% in men, according to data found by the CDC's annual Behavioral Risk Factor Surveillance System. The study also found that women's rates did not change, remaining at 18%, and further confirmed other research that women do not respond to policy changes to colorectal cancer screening coverage. According to the CDC, colorectal cancer is the second leading cause of death from cancers that affect both men and women, with the colonoscopy considered to be one of the best screening tools available.

Free PCP Visits With Some ACA Insurance Plans

Americans in several cities seeking insurance from the Affordable Care Act marketplace can now choose from plans that offer free doctor visits from a primary care physician. The new benefit hopes to encourage visits to catch illnesses before they become severe and more expensive to treat, and cut down on more costly visits to urgent care and emergency rooms. In many of the markets, the health plans with free doctor visits are among the lowest cost plans.

Massive Losses Suffered by UnitedHealth from ACA Marketplace in 2015

UnitedHealth suffered a loss of $720 million in 2015, roughly $300 million more than originally expected several months ago, from its first foray into the Affordable Care Act's healthcare marketplace. The enormous deficit was a big hit to UnitedHealth's fourth quarter profit, even eating into the 2016 budget. The insurance company says sicker-than-average consumers and people signing up outside of the enrollment window are two of the reasons for the poor experience with the ACA marketplace. They expect to make a decision on whether they will continue with the marketplace in the first half of 2016.