While the health care repeal and replace continues to bounce around on the Congressional floor, so does the less talked about Self-Insurance Protection Act (SIPA) bill.
A group based out of South Carolina is seeking congressional support from a new presidential administration as it proposes the third version of the SIPA bill. This bill would exclude stop-loss insurance from the federal definition of health insurance, helping smaller businesses capitalize on self-funding options.
Since the Affordable Care Act, providing self-insured plans has been an option for smaller businesses. With the SIPA bill, this would still remain an option for those businesses, even if the ACA is repealed and replaced.
Allison Bell explains the benefits small businesses would receive from the SIPA bill:
“The SIPA bill could help employers with small self-insured plans get stop-loss insurance from entities other than major medical insurance providers, by blocking state efforts to apply major medical insurance rules to small stop-loss arrangements.”
However, there are also critics speaking up against this bill, saying that self-insured options hurt the market for fully insured group health coverage. Small businesses have been a monopoly market for fully insured, and the SIPA bill inherently validates the methodology of stop-loss coverage. This is something that fully insured advocates might not like.
Read the article, Self-insurance group asks Congress for stop-loss help, for more information.
Many employers use cost-shifting health strategies to mitigate health care costs to their employees. But how far will companies go? The more costs that are pushed off onto employees, the less benefit they receive from the company’s health care plan.
There is a better solution to mitigate costs that will benefit not only the employer but also the employees.
Reference-based pricing uses demographics and fair pricing methodology to pay claims to hospitals and other health care facilities. With this strategy, employers gain the power to utilize fair pricing practices.
This cost saving method provides several benefits. To start, most patients are blind to the costs of various health care services and procedures. And it is not their fault! Because of the lack of transparency in the health care system, it is nearly impossible for individuals to navigate the confusing landscape.
As out-of-pocket costs are on the rise, both employers and employees are worried about the lack of information in the health care system. There is a constant question of what costs of services they may have to pay for themselves. Rarely do individuals know the cost of services or alternatives available in advance.
Reference-based pricing is all about transparency. Services with large cost variations without much change in quality are the main focus. Employees can save themselves, and their employers, money by asking for all alternatives available and selecting the most appropriate option.
With a special focus on the cost of each medical service or procedure, reference-based pricing helps to manage claims throughout the year, typically resulting in lowering cost renewals at the beginning of the next plan year.
Republicans continue to look for ways to repair or replace the health law. Recently, the focus has been on the suggestion of shrinking the list of essential services that insurers are required to offer. Michelle Andrews comments on the topic in an article published in Kaiser Health News:
“That option came to the forefront last week when Seema Verma, who is slated to run the Centers for Medicare & Medicaid Services in the Trump administration, noted at her confirmation hearing that coverage for maternity services should be optional in those health plans.”
Currently, there are 10 required benefits that are included in the Affordable Care Act. Narrowing those essential health benefits, like maternity services, would not only reduce costs but also increase flexibility. However, limiting services would significantly impact an employer’s health plan, either helping or hurting employee retention.
Employers must begin to anticipate what could be ahead to position their companies in the best way possible. If limiting the essential benefits coverage is the next step, then employers might think that abiding directly with this change will benefit their company by saving money. But it is important to remember that this will not benefit the employees and could hurt your company’s employee recruiting and retention.
With this, managing the medical insurance benefit becomes crucial! It will help to ensure that premiums are sustained and employers can offer great medical insurance benefits to their employees.
Read What’s at Risk in GOP Health Law Overhaul by Michelle Andrews for more information.
Last week, the White House gave their support for proponents of the federal Right to Try law benefiting terminally ill patients. This law gives terminally ill patients easier access to experimental medicine not yet approved by the FDA. And with the outspoken support of President Trump, the law is one step closer to being passed.
‘Right to Try’ allows terminally ill patients access to experimental drugs without jumping through the FDA’s unnecessary hurdles along the way. In an article written for The Wall Street Journal, Thomas Burton comments on the situation stating:
“They contend red tape and FDA rules get in the way of compassionate access to new drugs, and they say patients should be able to use experimental drugs that are in clinical studies, after they have passed initial safety testing.”
This law could potentially save thousands of lives. And it would also give pharmaceutical companies a first-hand experience to determine whether a drug is an effective course of treatment.
The main concert of the FDA should be first and foremost to protect the patients’ health and life. But with the ‘Right to Try’, terminally ill patients have the choice to try experimental drugs to help potentially save their own life and others that follow.
For more information on the ‘Right to Try’ and its support from the White House, read the article, White House Backs ‘Right to Try’ for Terminally Ill Patients, from The Wall Street Journal.
Not long ago the public was focused on the significant price increase of Mylan’s allergy reversing EpiPen. But Mylan hasn’t been the only drug maker to raise their prices in the past few years. With several companies following this trend, the pharmaceutical industry is under fire with many life saving drugs out of the public’s reach.
In an article written for Kaiser Health News, Shefali Luthra quotes Nicholson Price, a professor at the University of Michigan Law School:
‘”Epi-Pen happened, and everyone was like, ‘Wow, this is terrible, we shouldn’t allow this to happen,'” he said. “And we haven’t done anything about that, and it’s not clear what the solution is. Now, shocker, it’s happening again.”‘
The most recent company to dramatically raise the price of their drug is Kaleo, a small company from Virginia. They are the maker of a life saving antidote for opioid overdoses, Evzio. A two-pack of this injector device was just $690 in 2014 and is now listed at $4,500. This price increase has people questioning if it can be justified, however, this has not been widespread news across the United States.
With the nation’s opioid epidemic, a drug like Evzio is in high demand. The newest model of Evzio focuses on the high-tech features of the auto-injector. Included is a device that talks people through the process of administering the drug. The thought, is that anyone can use this device to help save a life in need. But with the prices so high, only first responders and drug treatment programs have access.
So is this new feature and the spike in price really worth it for Kaleo? In the article referenced above, Luthra questions the same thing:
“Still, experts say the device’s price surge is way out of step with production costs, and a needless drain on health-care resources.”
Read Massive Price Hike for Lifesaving Opioid Overdose Antidote, from Kaiser Health News for more information.
The governor of Massachusetts recently pitched a new proposal that will help to lower the states spending on Medicaid.
In a recent article featured in The Wall Street Journal, Jennifer Levitz and Melanie Evans write:
“With an employer penalty, the governor is aiming to solve what he sees as a flaw in the national health law: Medicaid ends up being more appealing to low-income workers than insurance offered by employers, raising the costs for the state. “
The Massachusetts governor, Charlie Baker, understands that the Affordable Care Act (ACA) has lead to many employee’s that qualify for Medicaid to choose that health care coverage instead of the employer sponsored health plan. By doing this, those employees receive a more traditional health care coverage and lower overall costs, instead of the employer’s high deductible plan that requires larger out-of-pocket expenses.
This new proposal pushes employer’s to cover more employees with their company provided health care plan to avoid a $2,000 fine issued per worker who is not using the company’s plan. By issuing this large fine, the state hopes to decrease the state’s spending on government sponsored Medicaid.
Additionally, the governor’s proposal also includes some hospital price limits for privately insured patients. This is said to help protect employer sponsored plans from shocking billing practices.
If other states follow Massachusetts’s lead, employer sponsored medical coverage plans could become even more expensive. Because of this, it is important to continue to stay on top of new ways to manage your company’s health care plan. This is critical to help maintain and battle the cost of most employer’s second highest expense behind payroll.
Read Massachusetts Governor Pitches Health-Insurance Penalty for Employers, from The Wall Street Journal for more information.