Offer Health Plans Research Articles

Increasing Insurance Choices In The Affordable Care Act Marketplaces, 2018-21.

The Affordable Care Act (ACA) relies on insurers to offer health plans in the individual health insurance Marketplaces. Since the ACA's implementation, levels of Marketplace competition have varied, reaching a nadir in 2018. We examined the characteristics of counties that experienced changes in insurers' participation in the ACA Marketplaces from 2016 to 2021. Using data from the Kaiser Family Foundation and other sources, we found that 1,968 counties (accounting for 66percent of the US population younger than age sixty-five) have more insurers in 2021 than in 2018, whereas only twelve counties (comprising 0.4percent of the US nonelderly population) have fewer insurers. The number of counties with monopolist Marketplace insurers declined from 1,616 in 2018 to 294 in 2021. Recent Marketplace insurer gains were more likely in counties that lost insurers from 2016 to 2018 or had a monopolist insurer in 2018. Increased competition may lead to lower gross premiums in the ACA Marketplaces. Given the Biden administration's support for the ACA Marketplaces, it appears likely that the ACA individual health insurance market will be stable and profitable for the next several years.

The Effect of Reactance on Satisfaction: A Study in the Context of Supplementary Health Care Systems

In a scenario in which the State is unable to serve the entire population, private health organizations have emerged, offering health plans and private assistance, called supplementary health systems. Given this context, the theme of this work is the study of the effect of psychological reactance on the satisfaction of users of supplementary health plans. The empirical phase was conducted through a survey with 145 university students. Data analysis, conducted through the macro PROCESS, indicated that the valuation of supplementary health care providers is closely related to the level of individual reactance of the user and the way the plan is contracted. Furthermore, freedom of choice of the operator minimizes negative evaluations from individuals with high psychological reactance.

Self-Insured Health Plans: Recent Trends by Firm Size, 199662016

This Issue Brief examines 1996‒2016 trends in the availability of and enrollment in self-insured health plans among private-sector establishments offering health plans and their covered workers, with a particular focus on 2013 to 2016, so as to assess whether the Patient Protection and Affordable Care Act of 2010 (ACA) might have affected these trends. The data come from the Medical Expenditure Panel Survey Insurance Component (MEPS-IC). Here are the key findings: • The percentage of all private-sector establishments offering health plans at least one of which is self-insured has continued an increase that started in 2000. o In 2016, 40.7 percent of private-sector establishments reported that they self-insured at least one of their health plans, up from 39 percent in 2015. • Between 2013 and 2016, the percentages of small and midsized establishments offering at least one self-insured plan both increased. o For small establishments, the percentage increased from 13.3 percent to 17.4 percent (a 31 percent increase), with most of the increase occurring in 2016. o For midsized establishments, the percentage increased from 25.3 percent to 29.2 percent (a 15.4 percent increase). (In 2016, the percentage of midsized establishments offering a self-insured plan fell from 30.1 percent to 29.2 percent.) • Between 2013 and 2016, the self-insurance trend for large establishments continued to decline, falling from 83.9 percent to 78.5 percent. • Because many more employees work for large establishments, the increase in self-insurance among small establishments (and their workers) was not large enough to offset the decline among large establishments (and their workers), resulting in a decrease in the percentage of covered workers enrolled in self-insured plans. o Between 2015 and 2016, the percentage of enrollees in self-insured plans fell from 60 percent to 57.8 percent.

Financing of employer sponsored health insurance plans before and after health reform: What consumers don’t know won’t hurt them?

This paper studies the potential impact on consumers of regulatory arbitrage based on financing of employment-based health insurance plans in the United States. Consumers enrolled in self-insured health plans, for which employers are financially responsible for medical claims, make up a majority of Americans with employer-sponsored health coverage. Unlike their fully insured counterparts, self-insured plans are not subject to state health insurance regulation. They are also exempt from certain provisions in the Patient Protection and Affordable Care Act (ACA). Employers who offer health plans can thus avoid certain insurance regulations and consumer protections by electing to self-insure. This research explores the impact of self-insurance on consumer welfare and how that is expected to change under the ACA. We describe the major consumer concerns regarding self-insurance – firm financial solvency, benefit generosity and stability, claims adjudication and recourse options – and present qualitative and quantitative evidence on their importance. We find a substantial degree of similarity between self-insured and fully insured plans with regard to benefit generosity and stability, at least with respect to available measures. In addition, we find no evidence that enrollees in self-insured plans face higher denial rates. While the ACA will not directly affect claims adjudication, it will improve recourse options for consumers with all plans and narrow the regulatory differences that existed between financing types. Policymakers must work to ensure the transparency of recourse options for enrollees in self and fully insured plans. In terms of financial solvency, while stop loss coverage is more common among smaller versus larger self-insured firms and such coverage typically commences at lower attachment points for smaller firms, roughly one-fourth of self-insured firms with fewer than 200 employees do not have such coverage. The ability of small firms without stop loss coverage to manage the risks associated with health care claims is uncertain, as are the consequences of health care expenditure-related risk for the overall financial solvency of the firm. Further, the financial security of firms who purchase stop loss coverage, and – by extension, the solvency of health plan benefits provided to employees – depends critically on the reliability of the stop loss insurer. State insurance commissioners may want to carefully consider the adequacy and appropriateness of their regulatory oversight of stop loss insurers in light of the potential move among smaller employers into the self-insured and stop loss marketplace.

Effects of Employer Health Costs on the Trend and Distribution of Social Security-Taxable Wages

The increasing cost of employer contributions for employee health insurance reduces the percentage of compensation that is subject to the payroll tax. Rising insurance contributions can also have a more subtle effect on the Social Security tax base because they influence the distribution of money wages. Workers bear most of the burden of employer health contributions through lower money wages. Any change in the average cost and distribution of costs of employer health plans can have an effect on the distribution of wages and the percentage of wages subject to the payroll tax. This paper uses the Medical Expenditure Panel Survey (MEPS) to analyze trends in the cost of employer health contributions and the cross-worker distribution of health contributions. Our analysis shows that the 1996-2008 increase in employer health premiums was faster than overall compensation increases but only slightly faster among workers below the taxable maximum compared with those above the maximum. However, because employer health insurance premiums represent a much higher percentage of compensation below the maximum taxed earnings amount, the effect of health cost trends exerted a disproportionate downward pressure on money wages below the taxable maximum, reducing the percentage of compensation subject to the payroll tax. We simulated the implications of the health reform law on the trend in employer health costs around 2016. We find only slight effects on the fraction of worker compensation that will be subject to Social Security taxes. The higher insurance costs faced by employers who will be required to offer health plans will be approximately offset by lower health costs on the part of employers who will see some insured employees accept subsidized health insurance outside of an employer plan. The main long-term impact of reform on the taxable wage base is likely to be through its effect on the trend in underlying health care costs.

Will insomnia treatments produce overall cost savings to commercial managed-care plans? A predictive analysis in the United States

ABSTRACTObjective: Research indicates that insomnia may contribute significantly to healthcare costs; however, information on the effects of treatments on costs has not been thoroughly published. This study presents predictive models that forecast, from the perspective of commercial managed care, the effects of insomnia medications in reducing overall medical costs. The main objectives of this study were to predict the level of cost savings associated with insomnia treatments, illustrate the variation in outcomes given underlying model assumptions, and assist managed-care policy-makers with the evaluation of medications routinely administered for insomnia.Methods: Data on four primary-efficacy measures: wake after sleep onset (WASO), sleep efficiency (SE), sleep onset latency (SOL) and total sleep time (TST) were abstracted from published clinical trial data for eszopiclone, indiplon, low-dose trazodone, ramelteon, zaleplon, zolpidem and zolpidem extended-release. Change in per-patient per-year (PPPY) healthcare costs in a single claims database was calculated for subjects taking zolpidem, zaleplon and low-dose trazodone using generalized linear model (GLM) techniques, controlling for baseline demographics and baseline costs. Change in costs for emerging insomnia medications was forecasted by imputing efficacy values for these drugs into the regressions.Results: Using the accepted efficacy measure, WASO, zolpidem extended-release had the overall forecasted savings of –$1253 (CI: –$1404 to –$1404) PPPY compared to remaining treatments, whereas ramelteon cost an additional $348 (–$1280 to $584) PPPY. In three out of four cost-efficacy models, zolpidem extended-release had higher mean forecasted PPPY savings.Conclusion: This study examined cost effects of existing and emerging insomnia medications using models integrating clinical literature and medical claims within a statistical framework. The use of a single database may limit generalizability and models only address a 1‑year period. Results suggest treatments can offer health plans direct cost savings, with amounts sensitive to variable and efficacy measures, potentially limited by those variables available in the claims database. Compared to other evaluated treatments, zolpidem extended-release produced consistently higher predicted cost savings.

Health benefits in 2003: premiums reach thirteen-year high as employers adopt new forms of cost sharing.

This paper reports changes in job-based health insurance from spring 2002 to spring 2003. The cost of health insurance rose 13.9 percent, the highest rate of increase since 1990. Employers required larger contributions from employees for the monthly cost of health insurance. Separate copayments and deductibles for hospital services have become commonplace, and provider networks have broadened. There was no change in the percentage of employers offering health plans to their workers. Employers indicate little confidence in any future strategies for controlling health care costs.

Adverse selection and generosity of alcohol treatment benefits.

Concerns about attracting disproportionate numbers of employees with alcohol problems limit employers' willingness to offer health plans with generous alcohol treatment benefits. This paper analyzes two potential avenues of adverse selection, namely biased enrollment into plans and biased exit from plans offered by 57 employers between 1991 and 1997. We compare alcohol treatment use rates and costs of new and old enrollees between more generous and less generous plans; we also analyze disenrollment rates and enrollment duration by plan generosity for users and nonusers of alcohol treatment services. To avoid confounding benefit generosity with other plan features, in particular the use of managed care mechanisms, we compare plans that were administered in the same way by a large managed behavioral health care organization. Overall, we find no evidence of adverse selection into more generous plans. Contrary to the selection hypothesis, treatment costs of new members compared to old members are lower in firms with more generous treatment benefits than in firms with more limited benefits. Also, users of alcohol treatment services do not remain disproportionately enrolled longer in plans with generous benefits.

Private purchasing pools to harness individual tax credits for consumers.

While health insurance tax credits could help people who otherwise could not afford to purchase coverage, many might still find individual coverage too expensive and its marketplace dynamics bewildering. As an alternative, this paper outlines an approach using private purchasing pools for tax-credit recipients. The objective is to offer these individuals and families a choice among competing health plans, and provide many of the same advantages enjoyed by workers in large employer groups, such as relatively low administrative costs, no health rating, and an effective "sponsor." Some express optimism that private pools will emerge naturally and thrive as an option for individual tax-credit recipients. However, adverse selection and other individual health insurance market forces make this a dubious prospect. The approach presented here gives purchasing pools the same tool employer groups use to maintain stability and cohesion--a significant contribution that cannot be used elsewhere. The ability to offer health plans exclusive access to a sizable new, previously uninsured clientele--tax-credit recipients-would enable purchasing pools to attract health plan participation and thus overcome one major reason several state-directed pools for small employers have failed. To avoid other pitfalls, the paper also suggests private pool structures, as well as federal and state roles that seek to balance objectives for market innovation and choice with those for coverage-source stability and efficiency.

Gridlock on the Oregon Trail

Gridlock, partisan politics, empty wallets, and the blame game are usually associated with life inside the D.C. Beltway, but they have surfaced recently in the state of Oregon and brought efforts to implement the controversial Oregon Health Plan (OHP) to a virtual standstill. In a 19 March 1993 decision greeted with much enthusiasm by state political leaders, the medical community, and health care activists, the Clinton administration approved a Medicaid waiver to permit implementation of the OHP. The core of the plan restricts access of Medicaid patients to some health services in order to provide a basic package of benefits for some 120,000 Oregonians currently without health care insurance. The Bush administration had denied the Medicaid waiver in August 1992 because of concerns that quality of life assessments were embedded in a prioritized list of 688 health services, and that the priorities thereby might result in discrimination against the disabled and violate the Americans with Disabilities Act. A revised version, submitted in December 1992, attempted to eliminate the quality of life methods and guaranteed funding for 568 of the 688 services, including such previously excluded conditions as low birthweight babies, cirrhosis of the liver, and chronic bronchitis. After persistent lobbying by the Oregon congressional delegation and Gov. Barbara Roberts, the approval of the waiver was announced by Donna E. Shalala, secretary of health and human services. Shalala's approval, which was subject to twenty-nine conditions (primarily technical and reporting issues), allows the OHP to proceed for a five-year experimental period, beginning in January 1994. Under the OHP the income level for Medicaid eligibility would be raised from its current 50 percent of the federal poverty index to 100 percent ($14,343 for a family of four in 1992), and expand the total number of Medicaid recipients in the state from 240,000 to 360,000. The waiver approval also triggers a state version of a pay or program, in which employers will be mandated to provide health insurance for employees or be subject to a new payroll tax. Employers who play must offer health plans substantially similar to the Medicaid priority list and bear at least 75 percent of the cost for employees and 50 percent of the cost for their dependents. Among the more substantive conditions of federal approval, Shalala requested that the state submit within 60 days (18 May) another priority ranking to ensure that persons with disabilities are not potential subjects of discrimination. For example, the OHP will not be permitted to consider functional limitations (such as inability to walk) or impairments that persist after treatment as a measure of a treatment's effectiveness. The state was also asked to consider whether infertility (currently excluded from coverage) should be covered as a disability. And Oregon was also required not to rescind its guarantee of funding up to the level of the 568 services without prior approval from HHS. Oregon's political leaders were unanimous in asserting that Oregon was blazing a new path for the nation to follow as it takes up reform proposals at the national level to be issued by Hillary Rodham Clinton's task force. Rep. Ron Wyden (D-Ore.), a principal advocate of the OHP before the Clinton administration, remarked: Any good national health bill has to contain features of the Oregon plan, . . . universal coverage, preventive health care, cost containment through managed care, extensive use of nonphysician providers, and an emphasis on what's medically effective for our citizens (Washington Post, 20 March 1993). However, since the granting of the waiver, the OHP has looked like it would be an exemplar only of the obstacles that any national proposal might face. A major problem with implementation that has emerged is financial. The costs of the OHP over the five-year period are estimated at $6. …