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Sunday, November 06, 2011

Ind. Gov't. - “Traditionally everything is paid by the employer so there is no incentive to shop for prices or be preventive or consider not going to ER if you don’t have to.”

That is a quote from a long story today on the State of Indiana's move to high deductible health insurance, reported by Niki Kelly of the Fort Wayne Journal Gazette. First, some quotes from today's story:

INDIANAPOLIS – Indiana is leading the way in enrolling its employees in consumer-driven health plans that feature a health savings account, whether they like it or not. * * *

“Would I rather have traditional insurance? Yes,” said Allen Superior Court Judge David Avery, who is on the state’s health plan as a state-paid trial judge. “But the alternative is not affordable for me.”

He said the health savings option is working well for him and his family largely because they don’t have a lot of medical issues.

“It is to me an acceptable substitute for the traditional medical plan,” Avery said. “If you can belong to the plan for a couple years without any major medical problems, then you can build up savings and you feel a little more secure.”

In traditional health plans, employees pay a significant premium out of their paycheck for health insurance while employers also pick up some of the cost.

Services are covered by the insurance plan with the employee paying small fees for a prescription or doctor visit or some percentage of the bill.

A consumer-driven health plan is different because it is a high-deductible plan in which the employees pay little in premiums from their paychecks.

Most of these plans work together with a health savings account, in which employers put in money to cover medical costs. Employees can also contribute to the account out of their paychecks before taxes.

Employees are responsible for the full cost of medical care until the deductible has been met.

Employees can use the HSA to offset these costs. The insurance split (typically 80 percent-20 percent) kicks in after deductible is met. Employees pay 20 percent until they reach the out-of-pocket maximum. * * *

“The entire concept is to get some level of consumerism into health care,” [State Budget Director Adam Horst] said. “Traditionally everything is paid by the employer so there is no incentive to shop for prices or be preventive or consider not going to ER if you don’t have to.”

He conceded the traditional plan has gotten expensive but said that’s not why most employees are switching.

“You give me money for my health savings account, I get low premiums and I control my own destiny. To me it’s a no-brainer.”

That 2010 analysis also showed those using the health savings accounts are making different health care choices.

For instance, they visit the emergency rooms less, make fewer trips to the doctor and rely on generic prescription drugs more.

ILB: Yes, but how realistic is it to think that the consumer with a high deductible plan can actually "shop" for health care savings? This lengthy Oct. 27, 2011 story from the Wall St Journal, reported by Anna Wilde Mathews, titled "Push for Health-Cost Data ," addresses that issue directly. Ironically, Indiana is the focus. Some quotes:
The issue is arising because of a major shift in health-insurance plan design: More and more Americans have high-deductible insurance that requires them to pay cash out of pocket before coverage kicks in. These consumers are spending their own money on services such as imaging tests, so they want to shop around, just as they do when they buy a flat-screen TV. The idea is that if workers can compare the prices of, say, a colonoscopy or mammogram across various doctors, they may choose less costly care.

But Web services that reveal health-care pricing typically have to be built using data that are collected by the health insurers, which are generally the ones processing medical bills for an employer's workers. Some, such as Aetna Inc. and Cigna Corp., are sharing at least certain information with third-party firms when clients ask them to do so. In other cases, according to benefits consultants, vendors and employers, insurers are declining to let the information be handed over to the outside companies.

Denny Darrow, chief of staff at the Indiana state personnel department, said state officials want to hire a vendor to create a pricing tool for the approximately 26,000 workers the state covers. Like other big employers, the state is self-insured, so it essentially pays its own bills and uses a health plan mostly for administrative tasks and its provider network. But WellPoint Inc. is declining to let him provide billing-claims data to two outside vendors the state wants to test, an action that requires the health plan's permission under his contract, he said.

WellPoint is "basically telling us, as a customer, you don't own the data you pay for," said Mr. Darrow, who said the situation has been "frustrating."

Posted by Marcia Oddi on November 6, 2011 03:27 PM
Posted to Indiana Government