Cost-sharing Provisions Research Articles

Optimal reimbursement limitation for a health plan

AbstractThe goal of this paper is the assessment of an optimal reimbursement strategy for employer-based health insurance plans (HP), that cover several categories of medical services. Indeed, a health plan may offer several cost-sharing provisions for these categories, and the “Percent Expense Paid” by the plan also known as “Actuarial Value” represents a summary measure of the protection provided. Starting from a wide industrial applied model in insurance for rate-making, the generalized linear models (GLM), we estimate the expected value and variance of the health expenditure for each category. Moreover, different reimbursement rules (e.g. deductibles, co-payments, policy limits, etc.) involve a change of the “Actuarial Value” calculated as the ratio between the benefits paid by the plan (i.e. reimbursement amounts) and the expenses paid by policyholders (i.e. expenditures). The latter is the percentage of expenditure reimbursed by the plan and is sometimes defined in actuarial literature as Indicated Deductible Relativity (IDR); an IDR can be calculated for each category covered by the Health Plan or per policyholder and is a commonly used method for scoring the benefits of health insurance. Hence, we calculate the optimal IDR for each category, using the optimization problem proposed by de by Finetti (Il problema dei pieni, Giornale dell’istituto italiano degli attuari, 1940) in the context of proportional reinsurance. The goal is the minimization of the variance of the total reimbursement of the Health Plan by fixing the total gain. Furthermore, we propose a numerical application to a real dataset, containing observed expenditures of an Italian HP.

The Impact of Sharing Drug Rebates at the Point of Sale on Out-of-Pocket Payments for Enrollees in Employer-Sponsored Insurance

ObjectivesThis study aimed to estimate the impact of sharing drug rebates at the point of sale on out-of-pocket spending by linking estimated rebates to administrative claims data for employer-sponsored insurance enrollees in 2018. MethodsWe applied the drug rebate rate to the retail price of each brand name drug fill, allocated the reductions to out-of-pocket spending based on cost-sharing provisions, and aggregated each individual’s out-of-pocket spending across drug fills. We assumed that generic drugs have no rebates for employer-sponsored insurance. We assessed the impact of sharing rebates at the point of sale on out-of-pocket spending overall, for the therapeutic classes and specific drugs with the highest average out-of-pocket spending per user, and by health plan type. ResultsAcross 4 simulations with different assumptions about the degree of cross-fill effects, we found that 10.4% to 12.2% of enrollees in our sample would have realized savings on out-of-pocket spending if rebates were shared to the point of sale. Among those with savings, approximately half would save $50 or less, and 10% would save > $500 annually. We calculated that a premium increase of $1.06 to $1.41 per member per month among the continuously enrolled, insured population would be sufficient to finance the out-of-pocket savings in our sample. ConclusionsOur study suggests that, for a small percentage of enrollees, sharing drug rebates at the point of sale would likely improve the affordability of high-priced brand name drugs, especially drugs that face significant competition.

Cornerstones of ‘fair’ drug coverage: appropriate cost sharing and utilization management policies for pharmaceuticals

At the heart of all health insurance programs lies ethical tension between maximizing the freedom of patients and clinicians to tailor care for the individual and the need to make healthcare affordable. Nowhere is this tension more fiercely debated than in benefit design and coverage policy for pharmaceuticals. This paper focuses on three areas over which there is the most controversy about how to judge whether drug coverage is appropriate: cost-sharing provisions, clinical eligibility criteria, and economic-step therapy andrequired switching. In each of these domains we present 'ethical goals for access' followed by a series of 'fair design criteria' that can be used by stakeholders to drive more transparent and accountable drug coverage.

The Affordable Care Act and Ethnic Disparities in Colorectal Cancer Screening

Cost sharing can deter the use of health services and act as a potential contributor to racial/ethnic disparities in cancer. The Affordable Care Act required most health plans to cover, without cost sharing, preventive services, including colorectal cancer screening. Population-based data were used to estimate the impact of the Affordable Care Act's cost-sharing provision (together with other Affordable Care Act provisions targeting preventive care) on ethnic disparities in colorectal cancer screening, comparing Hispanics with non-Hispanics. An interrupted time series quasi-experimental analysis was used to examine ethnic differences in colorectal cancer screening pre- and post-implementation of the Affordable Care Act (analysis performed in 2018). The study cohort included insured individuals aged 50-64 years who participated in the Medical Expenditure Panel Survey from 2007 through 2015 (n=44,343). During the pre-Affordable Care Act period, screening rates decreased annually for non-Hispanics by -0.38 per 100 adults per year (95% CI= -0.55, -0.22) but remained level for Hispanics (annual trend per 100 adults: 0.01, 95% CI= -0.34, 0.35). After cost sharing was eliminated in 2011, colorectal cancer screening rates increased for both Hispanics (by 1.29 per 100 adults, 95% CI=0.69, 1.89) and non-Hispanics (by 0.58 per 100 adults, 95% CI=0.18, 0.99). The difference in trend increases between Hispanics and non-Hispanics was not statistically significant (0.70%, 95% CI= -0.24, 1.64). These findings suggest that Affordable Care Act implementation resulted in increased colorectal cancer screening; however, the effect of the law was not significantly different between Hispanics and non-Hispanics. These results provide indications that more needs to be done to reduce racial/ethnic disparities in colorectal cancer screening.

Impacts of shifting responsibility for high-cost individuals on Health Insurance Exchange plan premiums and cost-sharing provisions

Insurance companies can respond to increases in expected per-capita healthcare expenditures by adjusting premiums, cost-sharing requirements, and/or plan generosity. We use a Difference-in-Difference model with Plan-level Fixed Effects to estimate the impacts of increases in expected expenditures generated by closure of state-operated High Risk Pools (HRPs). For Silver plans, we find that issuers responded to HRP closures by increasing both premiums and deductibles, and by increasing the ratios of premiums to deductibles. This adjustment to the structure of plan prices is consistent with the hypothesis that issuers will be reluctant to adjust deductibles, because consumers tend to overweight changes in deductibles over changes in premiums. The increase in the ratio of premiums to deductibles indicates that the increase in expected expenditures triggered an increase in the share of total risk-pool healthcare expenditures paid by low healthcare utilizers, and a decrease in the share paid by high utilizers.

Using a game-theoretic approach to design optimal health insurance for chronic disease

Health insurance has a significant effect on medical utilization and expenditures. This study analyzes the problem of health care cost-sharing policies to treat individuals with chronic disease. This problem consists of determining optimal cost-sharing policies for a public/private insurer as well as an insured’s optimal decision on multiple treatments based on healthcare expenditures and health status to minimize respective costs. We treat this problem of cost-sharing design as a stochastic Stackelberg game, in which the framework captures the long-term interactions between an insurer and an insured, subject to underlying uncertainties of disease progression (the transition of the insureds across health states). A realistic case of hypertensive heart disease is examined. We analyze the effect of cost-sharing policies on insureds with different characteristics (age and income). The analysis results show that the behavior of insureds regarding medical utilization and treatment adherence complements related case study reviews. Moreover, multi-tiered cost-sharing benefits are also analyzed. To the best of our knowledge, this is the first game-theoretic application considering the association between cost-sharing and dynamic health outcomes for chronic diseases. The proposed framework can be applied to incent the insureds with multi-stage chronic diseases to promote healthcare service choices by designing flexible and differential cost-sharing provisions for specific insured groups.

The Well-Woman Project: Listening to Women's Voices.

Purpose: The U.S. Affordable Care Act (ACA) of 2010 included the Well-Woman Visit (WWV) as one of the preventive services, which must be covered without cost sharing. Despite concerted efforts to increase access to the WWV, data from the early years of the ACA demonstrated ongoing barriers, including insufficient consumer and provider awareness of the ACA's no cost-sharing provision for preventive services. As such, 2 years after full implementation of the ACA, the Well-Woman Project (WWP) used qualitative methods to learn about women's perceptions of the WWV and barriers that affect their ability to be healthy and seek well-woman care.Methods: Women's voices were captured by Listening Sessions in eight cities and through stories from women across the United States posted to a WWP Website, or reported over a WWP toll-free phone line. Thematic analysis of Listening Sessions and stories was conducted using Dedoose software.Results: In 2016, Listening Sessions (17) were held with 156 women; in addition, stories were collected from 102 women across the United States. Women are aware of the importance of preventive care, but report multiple barriers to seeking such care. However, they are able to articulate a variety of system and policy strategies that mitigate the complexity of navigating the health care system; help women prioritize their health and accessing health care; promote positive relationships with providers; empower women to advocate for themselves and others; promote positive mental health as well as access to safe environments, healthy food, and social support systems; decrease barriers related to lack of transportation and childcare; and support the provision of trauma informed care in the health care delivery system.Conclusion: To improve women's health status and reduce inequities, making the preventive well-care visit available without cost-sharing is necessary, but not a sufficient strategy.

PHS81 - Impact of the Affordable Care Act (ACA)’S Elimination of Cost-Sharing Provision on the Guideline-Recommended Cancer Preventive Screenings in the United States

To determine whether the Affordable Care Act’s elimination of cost-sharing affected guideline-concordant use of cancer preventive screenings. Adults (≥21 years) from 2009 and 2011-14 Medical Expenditure Panel Survey (MEPS) were included. Participants in each year were divided into 3 groups: aged 21-64 years with any private insurance, aged ≥65 years with Medicare only and aged 21-64 years uninsured. Study sample for each type of screening was defined separately: women aged 21-65 years (cervical cancer [Pap test]), women aged ≥40 years (breast cancer [mammography]) and adults aged 50-75 years (colorectal cancer [CRC, screenings–blood stool test, sigmoidoscopy, or colonoscopy]). Receipt of screening consistent with recommended frequency was determined. Prevalence and prevalence ratios (PR[95% CI]) were multivariate-adjusted and weighted to be nationally representative. Stratified analyses by race/ethnicity (and by sex for CRC screening) were also conducted. In 2014 (vs. 2009), privately insured women had 2% (0.98[0.97, 0.99]) and 4% (0.96[0.93, 0.99]) decline in receipt of Pap test and mammography. Privately insured Non-Hispanic (NH) White and Asian women had 2% (0.98[0.96, 1.00]) and 6% (0.94[0.88, 1.00]) reduction in receipt of Pap test in 2014 (vs. 2009), respectively (all p<0.10). Privately insured NH Asian women had 16% (0.84[0.74, 0.97]) reduction in receipt of mammography in 2014 (vs. 2009). In 2011 (vs. 2009), 9% (1.09[1.03, 1.16]) and 13% (1.13[1.02, 1.25]) increases in receipt of CRC screening were found among privately and Medicare-only insured men, respectively. Privately insured women had 7-6% rise in 2013-14 (vs. 2009) and Hispanic Medicare beneficiaries also had significant rise 2011-14 (vs. 2009), in receipt of CRC screening. A stable-to-declining trend in guideline-recommended screening for cervical and breast cancers were observed in 2011-2014 compared to 2009. ACA’s elimination of cost-sharing appeared to have positively affected CRC screening of privately insured males, females and Medicare-only insured males and Hispanics.

Impacts of Shifting Responsibility for High-Cost Individuals on Health Insurance Exchange Plan Premiums and Cost-Sharing Provisions

States with Section 1332 Waivers to operate high-risk pools (HRPs) or reinsurance programs can receive federal pass through funds equal to reductions in federal expenditures generated by the Waiver. Shifting financial responsibility for high-cost individuals out of the Health Insurance Exchange (HIX) markets is expected to reduce federal expenditures for Advanced Premium Tax Credits, by reducing HIX plan premiums. Simulation models predict that a new HRP or reinsurance program would trigger premium reductions ranging from 7% to 23%. These models assume that insurers do not adjust plan cost-sharing requirements or plan generosity. However, federal requirements specifying the Medical Loss Ratio and plan Actuarial Values give insurers incentives to make multidimensional adjustments. We use plan level fixed effects to generate difference-in-difference estimates of insurer responses to closures of state-operated HRPs during 2014-2016. Silver plan premiums increased 7.7%, deductibles increased 41%, and Maximum-Out-Of-Pocket (MOOPs) expenditures increased 24% following closure of a state HRP.

Principles of Child Health Care Financing.

After passage of the Patient Protection and Affordable Care Act, more children and young adults have become insured and have benefited from health care coverage than at any time since the creation of the Medicaid program in 1965. From 2009 to 2015, the uninsurance rate for children younger than 19 years fell from 9.7% to 5.3%, whereas the uninsurance rate for young adults 19 to 25 years of age declined from 31.7% to 14.5%. Nonetheless, much work remains to be done. The American Academy of Pediatrics (AAP) believes that the United States can and should ensure that all children, adolescents, and young adults from birth through the age of 26 years who reside within its borders have affordable access to high-quality and comprehensive health care, regardless of their or their families' incomes. Public and private health insurance should safeguard existing benefits for children and take further steps to cover the full array of essential health care services recommended by the AAP. Each family should be able to afford the premiums, deductibles, and other cost-sharing provisions of the plan. Health plans providing these benefits should ensure, insofar as possible, that families have a choice of professionals and facilities with expertise in the care of children within a reasonable distance of their residence. Traditional and innovative payment methodologies by public and private payers should be structured to guarantee the economic viability of the pediatric medical home and of other pediatric specialty and subspecialty practices to address developing shortages in the pediatric specialty and subspecialty workforce, to promote the use of health information technology, to improve population health and the experience of care, and to encourage the delivery of evidence-based and quality health care in the medical home, as well as in other outpatient, inpatient, and home settings. All current and future health care insurance plans should incorporate the principles for child health financing outlined in this statement. Espousing the core principle to do no harm, the AAP believes that the United States must not sacrifice any of the hard-won gains for our children. Medicaid, as the largest single payer of health care for children and young adults, should remain true to its origins as an entitlement program; in other words, future fiscal or regulatory reforms of Medicaid should not reduce the eligibility and scope of benefits for children and young adults below current levels nor jeopardize children's access to care. Proposed Medicaid funding "reforms" (eg, institution of block grant, capped allotment, or per-capita capitation payments to states) will achieve their goal of securing cost savings but will inevitably compel states to reduce enrollee eligibility, trim existing benefits (such as Early and Periodic Screening, Diagnostic, and Treatment), and/or compromise children's access to necessary and timely care through cuts in payments to providers and delivery systems. In fact, the AAP advocates for increased Medicaid funding to improve access to essential care for existing enrollees, fund care for eligible but uninsured children once they enroll, and accommodate enrollment growth that will occur in states that choose to expand Medicaid eligibility. The AAP also calls for Congress to extend funding for the Children's Health Insurance Program, a plan vital to the 8.9 million children it covered in fiscal year 2016, for a minimum of 5 years.

Has recommended preventive service use increased after elimination of cost-sharing as part of the Affordable Care Act in the United States?

BackgroundAn early provision of the Affordable Care Act (ACA) eliminated cost-sharing for a range of recommended preventive services. This provision took effect in September 2010, but little is known about its effect on preventive service use. MethodsWe evaluated changes in the use of recommended preventive services from 2009 (before the implementation of ACA cost-sharing provision) to 2011/2012 (after the implementation) in the Medical Expenditure Panel Survey, a nationally representative household interview survey in the US. Specifically, we examined: blood pressure check, cholesterol check, flu vaccination, and cervical, breast, and colorectal cancer screening, controlling for demographic characteristics and stratifying by insurance type. ResultsThere were 64,280 (21,310 before and 42,970 after the implementation of ACA cost-sharing provision) adults included in the analyses. Receipt of recent blood pressure check, cholesterol check and flu vaccination increased significantly from 2009 to 2011/2012, primarily in the privately insured population aged 18–64years, with adjusted prevalence ratios (95% confidence intervals) 1.03 (1.01–1.05) for blood pressure check, 1.13 (1.09–1.18) for cholesterol check and 1.04 (1.00–1.08) for flu vaccination (all p-values<0.05). However, few changes were observed for cancer screening. We observed little change in the uninsured population. ConclusionsThese early observations suggest positive benefits from the ACA policy of eliminating cost-sharing for some preventive services. Future research is warranted to monitor and evaluate longer term effects of the ACA on access to care and health outcomes.

Elimination of cost-sharing and receipt of screening for colorectal and breast cancer.

The aim of the cost-sharing provision of the Patient Protection and Affordable Care Act (ACA) was to reduce financial barriers for preventive services, including screening for colorectal cancer (CRC) and breast cancer (BC) among privately and Medicare-insured individuals. Whether the provision has affected CRC and BC screening prevalence is unknown. The current study investigated whether CRC and BC screening prevalence among privately and Medicare-insured adults by socioeconomic status (SES) changed before and after the ACA. Data obtained from the National Health Interview Survey pertaining to privately and Medicare-insured adults from 2008 (before the ACA) and 2013 (after the ACA) were used. There were 15,786 adults aged 50 to 75 years in the CRC screening analysis and 14,530 women aged ≥40 years in the BC screening analysis. Changes in guideline-recommended screening between 2008 and 2013 by SES were expressed as the prevalence difference (PD) and 95% confidence interval (95% CI) adjusted for demographics, insurance, income, education, body mass index, and having a usual provider. Overall, CRC screening prevalence increased from 57.3% to 61.2% between 2008 and 2013 (P<.001). Adjusted CRC screening prevalence during the corresponding period increased in low-income (PD, 5.9; 95% CI, 1.8 to 10.2), least-educated (PD, 7.2; 95% CI, 0.9 to 13.5), and Medicare-insured (PD, 6.2; 95% CI, 1.7 to 10.7) individuals, but not in high-income, most-educated, and privately insured respondents. BC screening remained unchanged overall (70.5% in 2008 vs 70.2% in 2013) and in the low SES groups. Increases in CRC screening prevalence between 2008 and 2013 were confined to respondents with low SES. These findings may in part reflect the ACA's removal of financial barriers.

The impact of specialty pharmaceuticals as drivers of health care costs.

The pharmaceutical industry is shifting its focus from blockbuster small molecules to specialty pharmaceuticals. Specialty pharmaceuticals are novel drugs and biologic agents that require special handling and ongoing monitoring, are administered by injection or infusion, and are sold in the marketplace by a small number of distributors. They are frequently identified by having a cost to payers and patients of $600 or more per treatment. The total costs of the new agents are likely to have a substantial impact on overall health care costs and on patients during the next decade, unless steps are taken to align competing interests. We examine the economic and policy issues related to specialty pharmaceuticals, taking care to consider the impact on patients. We assess the role of cost-sharing provisions, legislation that is promoting realignment within the market, the role of biosimilars in price competition, and the potential for novel drug development paradigms to help bend the cost curve. The economic aspects of this analysis highlight the need for a far-reaching discussion of potential novel approaches to innovation pathways in our quest for both affordability and new technology.

Private Health Insurance and Risk Protection: Changes in Out-of-Pocket Medical Spending, 2001 and 2011

Changes in the cost-sharing provisions of employment-sponsored health insurance in the 2000s were designed to control U.S. health-care spending. However, such provisions may also increase the financial burden on families who need medical care and may differentially affect families according to their socioeconomic characteristics and the health status of family members. Additionally, changes in cost sharing may alter the entire shape of the out-of-pocket spending distribution. Using quantile regressions, I assess whether the distribution of out-of-pocket spending and hence the risk-protection function of private insurance has been affected by such changes. The empirical results reveal that families who are likely to incur higher health-care spending because of family members’ existing health conditions were most affected by changes in cost sharing, while families with older policyholders at higher percentiles of the out-of-pocket spending distribution experienced decreases in such spending.

Cost-sharing Rules and Efficient Provisions of Public Goods

We develop a simple scheme for the provision of public good and show that, under certain conditions, the equilibrium provision of the public good is at the efficient level. Our scheme is based on conventional games of private provision of the public good with an exogenously given cost structure to share the cost of the provision of the public good. We also give a characterization of the class of cost-sharing rules that induce the efficient provision of the public good at the equilibrium.

PHP70 - Private Health Insurance And Risk Protection: Changes In Out-Of-Pocket Medical Spending, 2001 And 2005

Changes in the cost-sharing provisions of employment-sponsored health insurance in the 2000s were designed to control U.S. health-care spending. However, such provisions may also increase the financial burden on families who need medical care and may differentially affect families according to their socioeconomic characteristics and the health status of family members. Additionally, changes in cost sharing may alter the entire shape of the out-of-pocket spending distribution. Using quantile regressions, I assess whether the distribution of out-of-pocket spending and hence the risk-protection function of private insurance has been affected by such changes. The empirical results reveal that families who are likely to incur higher health-care spending because of family members’ existing health conditions were most affected by changes in cost sharing, while families with older policyholders at higher percentiles of the out-of-pocket spending distribution experienced decreases in such spending.

Patient Cost-Sharing and Healthcare Spending Growth

In this paper, we explore the role patient incentives play in slowing healthcare spending growth. Evidence suggests that while patients do indeed respond to financial incentives, cost-sharing does not uniformly improve value; rather, cost-sharing provisions must be deliberately structured and targeted to reduce care of low marginal value. Other mechanisms may be helpful in targeting particular populations or types of utilization. The spillover effects between privately insured and publicly insured populations as well as market imperfections suggest a potential role for public policy in promoting insurance design that slows spending growth while increasing the health that each dollar buys.

Group Insurance: A Better Deal For Most People Than Individual Plans

This paper compares health plans currently available on the individual market with employer-sponsored plans. Points of comparison include the scope of benefits, cost-sharing provisions, premiums, expected out-of-pocket costs, and actuarial value. We draw from the 2007 KFF/HRET Health Benefits Survey, our own survey of individual-market plans, the MarketScan medical claims database, and a computer simulation of medical claims. We find that in 2007, employment-based plans covered 80 percent of all charges paid by the plan and the member, while individual plans covered 64 percent. For most people, premiums and out-of-pocket costs were more affordable in tax-advantaged employer plans than in individual-market plans. Proposed health reforms would fundamentally alter the plan offerings available to Americans, particularly those offered in the individual market.

Impact of medicare part D on access to and cost sharing for specialty biologic medications for beneficiaries with rheumatoid arthritis

Many worry that the use of specialty tiering for biologic disease-modifying antirheumatic drugs (DMARDs) by Medicare Part D plans imposes a heavy financial burden on beneficiaries with rheumatoid arthritis (RA). To date, no one has examined the cost-sharing structures for biologic DMARDs in Part D plans or the resulting cost burden for patients. We followed 14,929 vulnerable, low-income patients with RA who were enrolled in the Medicare Replacement Drug Demonstration (MRDD) in 2005. As the MRDD population transitioned into Part D in 2006, we examined correlates of Part D enrollment and compared the cost-sharing provisions for biologic DMARDs in the Medicare Advantage and stand-alone plans. We simulated the out-of-pocket costs of beneficiaries under 3 cost-sharing scenarios. Eighty-one percent of MRDD beneficiaries with RA enrolled in Part D. Enrollment predictors were female sex (odds ratio [OR] 1.48, 95% confidence interval [95% CI] 1.32-1.67), prior MRDD benefit use (OR 2.29, 95% CI 2.04-2.58), other self-reported drug coverage (OR 1.53, 95% CI 1.36-1.71), and receiving an MRDD subsidy (OR 2.00, 95% CI 1.74-2.30). Compared with stand-alone plans, Medicare Advantage plans had lower deductibles, lower premiums, and fewer prior authorization, step therapy, and quantity limit restrictions. However, approximately 75% of all plans used coinsurance as the preferred form of cost sharing. Out-of-pocket costs exceeded $4,000 annually in all cost-sharing scenarios. Most MRDD beneficiaries with RA enrolled in Part D. Although plans assume some costs for biologic DMARDs, the majority of costs are shifted to beneficiaries and to Medicare. Such cost shifting may place these medications out of the beneficiary's financial reach and expose Medicare to high financial liability.

NSF to Revisit Cost-Sharing Policies

U.S. ACADEMIC RESEARCHIn October 2004, the National Science Foundation (NSF) decided to eliminate its cost-sharing provision from future program announcements. Now NSF's oversight body, the National Science Board, wants to take another look at the issue. ([Read more][1].) [1]: http://www.sciencemag.org/cgi/content/full/316/5822/184b