Medical Debt Reform; How It May Impact Employer Group Health Plans

Cory Jorbin, Esq.

With over a million ballots cast so far statewide, Arizona voters are already making their voices heard in the 2022 mid-term election. In addition to Arizona's more obvious races in the national spotlight, Arizona has a measure on the ballot that may also interest those living outside the state.
 
Known as Prop 209, this measure would reduce the maximum interest rate allowable on medical debt from 10% to 3% and expand the assets exempt from medical debt collectors.

If it passes, it may prompt other states to move in this direction, especially those more progressive states or those states with significant populations in medical debt.

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Topics: Compliance, Cost Containment, Arizona

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Deferred Medical Care - Employer Tips for Mitigating the Costs

David Rook

To keep rising group medical premiums as low as possible, employers have, for years, aggressively promoted preventive medical care. This strategy has been and continues to be one of the best cost containment strategies for taming the alarming and seemingly never-ending increases in health care premiums.

Not only does the early detection of health issues result in better patient outcomes, but it also helps prevent a medical claim from becoming catastrophic in terms of cost. High-cost claims not only create a financial burden for the patient but also contribute to year-over-year increases in medical premiums for the employer, which inevitably trickles down to the entire workforce enrolled in the health plan.

The pandemic, however, changed how individuals accessed health care. According to the Centers for Disease Control and Prevention, approximately 41% of people deferred care during 2020 and 2021 due to concerns related to the pandemic.

Many individuals who postponed elective or in-person care to reduce the risk of contracting COVID-19 are now starting to address their deferred care. Accordingly, employers are struggling to respond to this surge in employee health care usage in a cost-effective manner.

Furthermore this deferred care is contributing to an already tight labor market since absences from work for medical appointments and recovery is on the rise. 

By implementing strategies to address deferred medical care, employers can better prepare for increased future health care costs and workforce absences. Here are strategies to help employers with these issues. 

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Topics: Cost Containment, COVID-19

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ICHRAs: A Potential Health Coverage Alternative for Employers

Jeff Griffin

Individual Coverage Health Reimbursement Arrangements (ICHRAs) are a new type of health reimbursement arrangement in which employers of any size can reimburse employees for some or all of the premiums that the employees pay for health insurance.

Employers can reimburse employees tax-free for individual health insurance, including coverage purchased on federal or state-sponsored health insurance exchanges, the individual markets, or Medicare.

And under federal rule changes in 2019, ICHRAs can be structured to fulfill the employer mandate under the ACA that requires most organizations to offer “affordable coverage" for employees.

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Topics: Cost Containment, ACA, Medical Plan

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3 Ways to Strengthen Cost Management for Pharmaceutical Benefits

Jeff Griffin

When considering prescription drug cost savings, plan sponsors know where to look: the cost of specialty drugs.

Specialty drug treatments accounted for approximately 52% of pharmacy spending in 2020, and when 2021 is fully accounted for, that number is expected to increase. Plan sponsors can expect specialty drug spending to hit 55% or more of total drug costs in 2022.

And it’s no surprise that specialty drugs are eating up a huge amount of total drug spending — whether it’s an oncology drug, a drug to treat a rare condition, or a biologic with multiple indications, the annual cost of a single specialty treatment can easily run into five, six or even seven figures.

Because of its increased percentage of total drug spending, specialty drug costs are proving a major headache for plan sponsors. They need to find ways to control spending on these treatments, lest the cost of the drug benefit become prohibitive.

Here are three ways to manage the cost of pharmaceutical benefits.

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Topics: Cost Containment, Prescription Drugs

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Employer Vaccination Mandates and Medical Premium Surcharges

Jeff Griffin

Many employers are struggling to increase COVID-19 vaccination rates among their workforce, concerned not only about the safety of the workforce but also the costs of COVID-19 treatment that could be avoided through vaccination.

Some, like Delta Airlines, are turning to higher premium costs, or a surcharge, for any group health plan participants who remain unvaccinated. This decision by Delta, taken once an FDA-approved vaccine came on the market, should by no means be interpreted as a full-throated endorsement of this action. In fact, it’s quite likely that Delta’s decision will be tested in the courts.

Challenges are likely to come in three areas: wellness positioning, surcharge amounts, and possible discrimination. Nevertheless, Delta’s decision has prompted some employers to consider doing something similar.

Here are issues employers need to consider if they decide to take similar action.

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Topics: Compliance, Cost Containment, wellness, COVID-19

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Shopping for Healthcare Services - 8 More Ways to Save Through Pricing Transparency

Jeff Griffin

As employee benefits consultants, we take our responsibility seriously to educate employers and employees on resources available to help reduce employee benefits program costs and out-of-pocket healthcare expenses.

This is especially true for those enrolled in High Deductible Health Plans (HDHPs), but even for those who aren’t. For without any effort, as a collective, to become more price-conscious consumers, healthcare providers will have no reason to reign things in.

In a recent blog, we discussed how consumers can save on prescription medications, including comparison shopping, manufacturer rebates and discounts, drug substitution, pill splitting, bulk buying, mail-order, and more.

As a complement to that blog post, today we’ll discuss various ways consumers can save on healthcare services and procedures. After all, when combined, hospitals and physician/clinical services account for 48% of healthcare expenses.

With nearly half of medical expenses centered around these areas, it makes sense for healthcare consumers to focus on these cost centers as target-rich environments for possible savings.

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Topics: Cost Containment, Consumer Driven Healthcare

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8 Ways Employers and Employees Can Save On Prescription Medications

Jeff Griffin

With over half of today's workforce enrolled in high-deductible health plans (51%), a majority of insured individuals are now on the hook for deductibles of at least $1,400. In addition, those with family coverage are responsible for at least $2,800.

While these higher deductibles are offset by cheaper monthly medical premiums and often by employer contributions to Health Savings Accounts (HSA), HDHP plans are nevertheless structured in such a way as to promote heightened "healthcare consumerism."

Judging by the sticker shock most consumers experience the first time they pay for medical services or prescription drugs without a copay, this heightened awareness of the "true cost of care" seems to be making an impact. As a result, consumers are indeed becoming more proactive about shopping for services and comparing prices, just as they would for any other consumer good.

Many employers, especially those that are self-funded, encourage this type of behavior since it can help them control costs and ultimately save significant dollars for both the company and its employees. (Employers with fully funded medical plans also have plenty of reasons to control their medical claims, though the potential savings often aren't recognized as immediately.)

And while consumers seem to have a love/hate relationship with HDHPs, many of those who take the time to fully calculate the total out-of-pocket cost of medical coverage and care realize that HDHPs, even with higher deductibles, can often save them money.

This isn't to say that HDHPs are for everyone, and if a company isn't helping its workforce adequately prepare for this change in consumer behavior, they are setting themselves up for failure.

Since we wouldn't want that to happen, here are eight suggestions to offer your workforce to help them save money on prescription drugs. In a future post, we'll offer tips on how to save money on common medical procedures.

Please share this information with your workforce. In doing so, you'll be helping them to become better consumers of healthcare and more satisfied enrollees in high deductible health plans.

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Topics: Cost Containment, Prescription Drugs

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Prescription Drug Pricing Trends

Jeff Griffin

As prescription drug costs continue to increase, it’s important for employers to understand the trends behind the rise and what they can do to better manage their health care expenses.

This blog post sets out to provide context for why prescription prices continue to rise and offers cost-cutting solutions for employers and employees.

Prescription Drug Cost Drivers

In 2019, the United States spent nearly $370 billion on prescription drugs, keeping trend with significant increases year over year. Although prescription drug spending has historically been a small proportion of national health care costs compared to hospital and physician services, it has grown rapidly in recent years—comprising about 10% of national health care spending.

A multitude of reasons led to this steady rise in prescription drug costs, including the following.

Influx of Specialty Drugs

Specialty medications account for a smaller portion of U.S. prescriptions than non-specialty drugs, yet they commanded nearly half of the pharmaceutical market in 2016 ($180 billion). And that dominance is likely to remain. Specialty drug spending is projected to experience rapid growth over the next several years, due to pricing increases.

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Topics: Cost Containment, Prescription Drugs

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5 Telehealth Trends to Watch in 2021

Jeff Griffin

Employers that are interested in cutting their health care expenses are likely familiar with telehealth. This is the process of communicating with a doctor via an app, or a webcam and computer. During the COVID-19 pandemic, telehealth usage skyrocketed, making it one of the most popular ways to receive health care.

As such, employers should stay apprised of notable telehealth trends to ensure they stay competitive and provide the best health care options to their employees. This article discusses five telehealth trends to watch for in 2021.

1. More Patient Utilization of Telehealth

As was stated, telehealth exploded in popularity during the COVID-19 pandemic. To put that into figures, nearly half (43.5%) of Medicare primary care visits in April 2020 were made using telehealth, according to the Department of Health and Human Services. And even before the pandemic, year-over-year utilization was up 33% in early 2020, according to Medical Economics.

If these statistics aren’t enough to prove that telehealth is here to stay, look instead at market projections. The telehealth market is estimated to surmount $185 billion by 2026, according to Fortune Business Insights. Considering the market was only worth around $34 billion in 2018, this shows how much of an impact telehealth has made on the health care industry.

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Topics: Cost Containment, Telemedicine, COVID-19

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Why Your Employees Aren’t Enrolling In Your HDHP

Jeff Griffin

Employers looking to decrease their healthcare costs often rely on workforce adoption of High Deductible Health Plans (HDHPs), which offer both employers and employees lower premiums. Unfortunately, if employees are given a choice, this strategy doesn’t always work if enrollment in HDHPs fall short of forecasts.

Rightly or wrongly, HDHPs have been saddled with some baggage. Many people have difficulty making the cognitive leap from traditional healthcare plans to HDHPs for a variety of reasons; in part because change is generally difficult for people, but sometimes, it’s simply a fear of the unknown and a matter of not understanding how they work.

While we certainly aren’t advocating that HDHPs are suitable for everyone, they’re a great fit for some. Particularly, those who are otherwise overpaying for health insurance, meaning that they’re paying high premiums, but rarely using their plans.

Here are some reasons your employees might not be enrolling in your HDHP — and how you can increase HDHP enrollment.

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Topics: Cost Containment, Education, HSAs, High Deductible Health Plans

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