Employer Group Health Plans

Can Purchaser Groups Slow Down Health Care Price Growth?

For years, health plan sponsors have banded together in purchaser groups in an effort to keep prices down and share benefit design best practices. Yet new research from the Commonwealth Fund indicates that purchaser groups have had marginal success in slowing the growth of health care costs.

Despite these limitations, health care insiders tell AIS Health, a division of MMIT, that purchaser groups have an important role to play in managing price growth. They also say that, while hospital consolidation has a large role in driving up health care prices, health insurers have not done their part to stop prices from increasing — and in fact may have incentives to keep prices rising.

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Amid Legal Disputes, Anthem’s NYC Contract Faces Second Delay

Anthem, Inc.’s pending contract to serve retired New York City workers and their dependents — which would have nearly doubled the insurer’s Medicare Advantage Employer Group Waiver Plan (EGWP) enrollment — is in peril. Just days before its planned start, the city’s comptroller refused to register the proposed contract and turned it back to Mayor Eric Adams (D) for a revised cost estimate, putting the already delayed transition to a retiree MA plan on hold.

“Due to the legal and budgetary uncertainties that remain while litigation over the City’s contract with Anthem Insurance Companies continues, the Comptroller’s office does not have sufficient information to register the proposed Medicare Advantage Plan contract at this time,” New York City Comptroller Brad Lander explained in a March 30 statement posted to the comptroller’s website. Subsequently, the city’s Office of Labor Relations posted that the transition to the NYC Medicare Advantage Plus Plan would not be implemented as of April 1 as planned and that all retirees “will remain in their current plans until further notice.”

What Would Be the Impact of Capping Private Plan Rates?

About half of non-maternity inpatient hospital admissions among large-group employer-sponsored plans were paid above 150% of Medicare rates, according to a recent analysis by Kaiser Family Foundation. To address high health care costs, some states have considered capping prices paid by private insurers at a multiple of Medicare rates. By analyzing in-network payment rates for inpatient hospital admissions, the study found that a cap set at 150% of Medicare rates could affect 36% of in-network spending in the large group market, while a cap at 300% could affect 13%. The study concluded that capping prices paid by employer-sponsored plans could be disruptive but could also make health care more affordable — “tradeoffs that warrant careful attention.”

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Maine Will Combine Individual, Small-Group Insurance Markets

Maine will merge its small-group and individual exchange health insurance markets starting in plan year 2023. Experts tell AIS Health, a division of MMIT, that the move is a bid to stabilize small-group premiums, which have gone up in recent years.

According to a Feb. 15 press release from the state’s Bureau of Insurance, “the merger, which will pool the risks of the two markets and roll the Small Group coverage into the Maine Guaranteed Access Reinsurance Association (MGARA), is projected to reverse the trend of steady premium increases and declining enrollments in Maine’s Small Group Market, while supporting continued stable pricing in the Individual Market.”

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Small-Group Insurance Market Remains Stable Under ACA

About half of small-firm employees worked for an establishment that offered health insurance from 2013 to 2020, and the small-group market has remained relatively stable since the implementation of the Affordable Care Act, according to a recent Urban Institute study. Employee coverage rates at small firms — which have fewer than 50 employees — dropped 2 percentage points, from 57.1% in 2013 to 55.1% in 2020. Meanwhile, employees’ contributions to single and family coverage in the small-group market rose during the study period by 2.3 and 6.0 percentage points, respectively. Though many people anticipated that small firms would transition to self-insurance to avoid ACA’s regulations, small firms were much less likely than larger firms to offer a self-insured plan between 2013 and 2020.

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Stop-Loss Market May Be Hot Opportunity for Health Insurers

While it’s become common knowledge in the health insurance sector that employer-sponsored coverage isn’t a major growth market, stop-loss insurance is bucking that trend. And with Blue Cross Blue Shield plans in particular not taking as much market share as they could, stop-loss could present attractive opportunities to health care-focused insurance carriers, experts say.

As it applies to health coverage, stop-loss insurance is typically paired with an administrative services only (ASO) contract, in which an employer pays its workers’ health care claims and hires an insurer to process those claims and perform other administrative functions. By adding stop-loss coverage, a self-funded employer is able to have that policy cover any “high-dollar” claim above a certain threshold, called an attachment point, thus minimizing the employer’s risk.

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Premiums, Deductibles Take Growing Portion of Workers’ Paychecks

People with employer-sponsored health plans spent 11.6% of their median household income on premiums and deductibles in 2020, up from 9.1% in 2010, according to an analysis published by The Commonwealth Fund. In 37 states, premiums and deductibles accounted for 10% or more of employees’ median income in 2020, with those in Mississippi and New Mexico facing the highest potential costs relative to income. The average premium for single coverage and family coverage reached $1,532 and $5,978 nationally.

High Prices, Pandemic Strain Employer-Backed Insurance

Pandemic-driven macroeconomic uncertainty and rising prices remain the biggest challenges for employer-sponsored insurance plans, according to experts. The cost of health insurance premiums has made employer-backed health insurance unaffordable to the point of being useless for many families, while the pandemic has created a volatile environment for many employers, particularly small businesses.

During a Jan. 26 panel hosted by the Bipartisan Policy Center, a Washington, D.C. think tank, employer health insurance experts sounded off on the myriad difficulties facing plan sponsors and employee beneficiaries. Worries over cost and the pandemic took up most of the discussion.

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Premiums, Deductibles Take Growing Portion of Workers’ Paychecks

People with employer-sponsored health plans spent 11.6% of their median household income on premiums and deductibles in 2020, up from 9.1% in 2010, according to an analysis published by The Commonwealth Fund. In 37 states, premiums and deductibles accounted for 10% or more of employees’ median income in 2020, with those in Mississippi and New Mexico facing the highest potential costs relative to income. The average premium for single coverage and family coverage reached $1,532 and $5,978 nationally.

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UnitedHealthcare Says It Won’t Restrict ER Services Coverage

UnitedHealthcare — which last summer drew the ire of provider groups when it announced plans to roll out more restrictive coverage policies for emergency care — is now making it clear that it has no plans to implement such a change.

In a letter sent Dec. 30 to the American Hospital Association (AHA), the insurer sought to reassure the trade group that “consistent with our prior communication in June 2021, UnitedHealthcare is not implementing any new policy regarding coverage criteria for emergency level care on January 1, 2022.”

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