Will Your Employer Switch to A “Private Exchange”?

We are getting familiar with “public exchanges” under Obamacare.

The Wall Street Journal article noted “Most U.S. employers will continue to sponsor health benefits for their employees over the next few years, but the way that benefits are provided may begin to shift for many workers, according to a report.”

“These private exchanges, modeled around the Affordable Care Act’s state exchanges, allow employees to ‘shop around’ for different plans and insurance companies, depending on how much their employer is willing to subsidize healthcare…”

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Can Corporations Shift Workers with High Medical Costs … to Online Insurance Exchanges?

The Kaiser Health News article noted “…Employers are inquiring about it and brokers and consultants are advocating for it.”

“Health spending is driven largely by patients with chronic illness such as diabetes or who undergo expensive procedures such as organ transplants. Since most big corporations are self-insured, shifting even one high-cost member out of the company plan could save the employer hundreds of thousands of dollars a year — while increasing the cost of claims absorbed by the marketplace policy by a similar amount.”

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Beware of Consumer Directed Health Plans!

The Health Affairs article reported on Consumer Directed Health Plans, noting:“Consumer-directed health plans (CDHPs), which feature a high deductible and a personal health savings account, can reduce medical spending by employers and consumers.”

“Patients enrolled in CDHPs had fewer episodes of care over the same time period than patients enrolled in traditional plans. Furthermore, these patients were found to have fewer visits to specialists, fewer hospitalizations, and lower use of brand-name drugs — all of which lowered their costs.”

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“Fixed Indemnity Plans” – Not so Fast

The Wall Street Journal article noted “The federal government … announced … that it would require people who wanted to buy a particular type of insurance called ‘fixed indemnity plans’ to demonstrate first that they also had traditional health-insurance coverage.”

“Fixed indemnity plans typically pay a limited cash benefit, with no deductible, to people who are hospitalized or encounter other medical costs. But the federal government said it was concerned that people might confuse those plans with standard health-insurance plans, and that the fixed indemnity plans alone couldn’t be considered to be coverage under the law’s requirement for most people to have insurance or pay a penalty.”

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Some Plans Will Not Pay for a Doctor Visit before You Meet Your Annual Deductible

Just when you thought that maybe you sort of understood the cost of an Obamacare health care insurance policy, a Kaiser Health News article noted: “This could be the next shoe to drop, as people don’t realize that if they’re buying a bronze plan, they may have to pay $5,000 out of pocket before it contributes a penny…”

“Experts worry that some enrollees will be discouraged from seeing doctors if they have to pay the full charge, rather than simply a copayment.”

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Value-Based Insurance

“If patients insist on medical procedures that science shows to be ineffective or unnecessary, they’ll have to pay for all or most of the cost.”

We all “demand” tests and prescriptions from out doctors and it is often easier for them to comply than argue. Now there may be a price to pay.

The Reuters article reported on “value-based” insurance with this vignette:

“When Tanner Martin, 17, developed excruciating back pain last year, he was sure he needed an X-ray to find out what was wrong. So was his mother, who worried that the pain might indicate a serious injury that could cause permanent disability.”

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“Under REFERENCE PRICING the Employer or Insurer Sets a Maximum Contribution … Toward the Payment for a Test or Treatment.”

The Wall Street Journal explored the health care insurance concept of Reference Pricing.

“The employee or enrollee can select any hospital or clinic but must pay the difference between the contribution limit and the actual price.”

“Reference pricing serves as a reverse deductible. Rather than the patient paying up to a defined limit and then the insurer covering the remainder, the insurer pays up to a defined limit and the patient pays the remainder. This has the remarkable feature of exposing the patient to the variation in prices for treatments that are above deductible thresholds. And the patient’s contribution isn’t limited by an annual out-of-pocket maximum.”

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“…the Out-of-Pocket Limit Doesn’t Exactly Live up to Its Name.”

The LATimes vignette noted “My coverage from Blue Cross Blue Shield of Illinois is exempt from the new limits because it predates the ACA, but it still has annual spending caps. The limits are $10,000 for services by providers in the plan’s network and $20,000 for out-of-network services. As a Blue Cross Blue Shield representative patiently explained to me, however, the out-of-network limit isn’t really a limit. When a customer reaches that amount, the insurer will still pay only the standard out-of-network share. That’s why my plan covered only 50% of the $54,755 charged by Tristate Care Flight to ferry me (by helicopter) from a car wreck in Quartzsite, Ariz., to a hospital in Phoenix. If Tristate wanted to bill me for the other half, the representative explained, it was free to do so.

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“…Unnecessary Medical Tests and Procedures Is a Serious Problem…”

The Robert Wood Johnson Foundation article noted: “three out of four U.S. physicians say the frequency with which doctors order but just as many say that the average physician orders unnecessary medical tests and procedures at least once a week…”

“…half of physicians think they are in the best position to address the problem and have ultimate responsibility for making sure patients avoid unnecessary care. Yet at the same time, more than half the physicians surveyed say they’d give an insistent patient a medical test they knew to be unnecessary.”

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“One in Four Medicare Patients Got Medical Care That Provided No Benefit at a Total Cost of at Least $1.9 Billion…”

The Modern Healthcare article noted “overuse for more than two dozen cancer screening, imaging, diagnostic, preventive or preoperative testing services and found it totaled 0.6% of Medicare spending.”

“The results underscore the potential for savings from efforts to eliminate medical care that has been identified by previous research as unnecessary, and wasteful, such as colorectal screening among those age 85 and older with no history of colon cancer.”

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