I have been scanning the proposed health care legislation from the Senate Health, Education and Labor Committee and have extracted from a summary prepared by the American Benefits Council some of the proposed provisions that will most affect large employers. At first glance, this is more cost shifting, increased administrative costs, increased benefit costs via mandates and a great potential for many more as the program goes into effect. There is also a major conflict in what is called patient rights and an entities ability to control costs where there is a conflict between what a patient and doctor want and what in reality may be medically necessary.
The government run Affordable Access Plan alternative is especially troublesome as it will shift more cost to the private sector as does Medicare and will eventually make the cost of private plans prohibitive beyond what they are today and thus gradually force everyone into a government plan. Before that happens private plans will face increasing costs.
There is little in the Senate draft that actually controls costs especially in any near term.
Key Points Summarized
If an employee opts-out of health coverage offered by an employer and obtains coverage though a health plan offered through a state-based health insurance Gateway (i.e., an insurance exchange or connector), employer must pay the federal government an amount it would have paid to cover a fulltime employee under its employer plan: Increased administrative costs, potential adverse selection.
Affordable Access Plans would reimburse health care providers at Medicare payment rates plus 10 percent (rather than establishing reimbursement rates as private health plans would, based on negotiations with participating health providers): Payments below market rates transfer costs to private sector.
Includes a Declaration of Rights relating to patients choosing doctors, the doctor patient relationship and health professionals’ determination of “what is best” for their patients: Conflicts with case management and standard medically necessary provisions.
Establishes a Medical Advisory Council (“MAC”) with authority to determine “essential benefits” and determine “affordable, available coverage” for purposes of the individual and employer mandates; MAC recommendations become effective automatically unless disapproved by Congress within a specified number of days: Groundwork for growing mandates in coverage, state level mandates are already estimated to add as much as 25% to the cost of insured health care plans. Firmly establishes government role in employer plans.
Establishes a new federal disability/long-term care plan with automatic enrollment and voluntary opt-out: Additional tax on workers for the coverage based on age; may create demands for higher wages to offset.
Requires all insurers and self-insured group health plans to develop and implement reimbursement structures that provide incentives for:
- the provision of high quality care, case management, care coordination and chronic care management, conflicts with bill of rights
- reduction in preventable hospital readmissions through discharge planning,
- improvements in patient safety and reduction in medical errors through the appropriate use of best clinical practices, evidenced based medicine and health information technology
- wellness and health promotion activities, child health measures, as defined under the Social Security Act, may add costs
- culturally and linguistically appropriate care, as defined by the Secretary of HHS, and generally reflects Medicare and Children’s Health Insurance Program (CHIP) payment policies with respect to any “generally implemented” payment incentives to promote high quality health care.
All of the above appear to change the relationship between the self-insured plan and the plan administrator and create substantial addition work for the self-insured plan.
Requires first dollar coverage (i.e., no cost sharing) by insurers and self-insured group health plans for preventive health services included in the recommendations of the U.S. Preventive Services Task Force, immunizations recommended by the Centers for Disease Control and preventive care and screenings for children based on guidelines issued by the Health Resources and Services Administration: Increases costs immediately, by eliminating cost sharing discourages patient from cost base decisions which should include preventive care, reinforces the “it’s free” mentality.
Requires insurers and self-insured group health plans that cover child dependents to make coverage available until the child dependent reaches age 26: As there appears to be no student requirement, this could represent a substantial increase in employer costs, it may provide an incentive for a child with medical bills to remain dependent on the parents longer than otherwise would be the case.