The 2020 presidential election is upon us, and the debate surrounding healthcare and politics is more contentious than ever. How can your health plan stay ahead of the game, no matter the outcome?
Every 4 years, the cross section of healthcare and politics is put on the national stage. What – if any – impact will the different possible outcomes have on health plans? The uncertainty can bring risk, but potential instability doesn’t necessarily threaten your plans for growth and innovation. Consider your options and keep agile around these 3 hot button healthcare issues to ensure your health plan succeeds in any political climate.
1. Healthcare Coverage
The politics of healthcare are most evident in an issue that signals the greatest threat to the industry: healthcare coverage. Over the past 10 years, the number of people in this country without health insurance has decreased significantly. And, with greater access to affordable healthcare, we tend to see improved outcomes and costs. But the future and structure of major programs that provide healthcare coverage – the Affordable Care Act, Medicare and Medicaid – are all up for debate.
Affordable Care Act
The Affordable Care Act – and the protections it provides – continues to come under fire. The Supreme Court will hear the case shortly and the legislation currently has no replacement if it is struck down entirely. However, many experts find that outcome unlikely, and some parts of it may survive the challenge under “severability.” In particular, it includes several provisions that are popular with the American public and generally increase the number of insured citizens, which is advantageous for health plans:
- Protections for pre-existing conditions
- Federal subsidies for deductibles and premiums
- Children staying on their parents’ plan until age 26
- Minimum coverage requirements
In fact, in recent years, the marketplace created by the ACA has proved resilient with premiums dropping and more insurers entering or re-entering the markets. And states have stepped in to prevent the complete unraveling of progress made under the ACA, no matter how it fares in the courts. In 14 states, these provisions promise to fully cover potential gaps. Otherwise, 47 states have extended cost sharing reductions tied to silver plans, 36 have ensured young adults can stay on their parents’ plan, and 21 have allowed for a full or partial ACA exchange.
Medicare and the public option
While the so-called “Medicare for All” seems to be off the table for the time being, changes to Medicare itself are still a distinct possibility. Some policies, such as extended telehealth and supplemental health benefits, have bipartisan support and are expected to continue. However, falling tax revenues have accelerated the program’s insolvency timeline to 2024, and the aging population means Medicare spending will rise from 15% of federal spending in 2018 to 18% in 2029.
But while there are no plans currently on the table to shore up Medicare, it’s politically risky to alienate the senior voting bloc. And one proposal actually plans to extend eligibility for the program to those age 60-64, though it would be financed separately from Medicare. Many insurers have seen significant success with their Medicare Advantage lines of business, so this expansion could prove lucrative.
Could the related “public option” be equally advantageous for health plans? According to a Times/Siena College poll, more than 65% of U.S. voters favor a government health-insurance plan anyone can buy. Private insurance would continue under this program. Deployment could look like a public-private choice model, a targeted choice option that strengthens the ACA, or applying Medicare-based rates to certain private insurance claims. As an executive for one of the major insurers explains, “We’ve had public options and done well in public options. So history says that’s fine.”
Medicaid cuts and expansion
At present, 38 states have expanded Medicaid under provisions allowed for by the ACA. The current administration’s efforts to cut Medicaid – namely block grants and work requirements – have proved unpopular and have faced legal challenges. We can expect proposals that increase Medicaid funding for home- and community-based services. And, under the public option mentioned above, individuals not covered by expansion would automatically be enrolled under that program.
Under our healthcare system, individuals, providers and payers tend to fare worse when there isn’t a broad base of people with access to affordable healthcare. Patients tend to defer or delay care due to cost, which makes their conditions more expensive to manage later on. And hospitals struggle with financial stress resulting from an increase in uncompensated care.
Stay agile around shifting healthcare coverage: Leverage data insights to predict long-term changes in stakeholder behavior and pursue targeted member outreach. Automate processes and workflows to reduce administrative complexity that can arise in the fallout of healthcare and politics.
2. Value-Based Care
With the fate of the ACA in question, what happens to the Center for Medicare and Medicaid Innovation? The CMMI is the innovation arm of CMS that has led many of the payment models for value-based care. Value-based care has received support across the political spectrum, so we can expect it to remain in some form. How it’s structured and administered, however, could change.
Current CMS administrator Seema Verma indicated value-based models in the future will incent providers to take on more risk. This evolution comes as data from these models show that while they improve outcomes and quality, not all save money. But some payers have reported significant cost savings from value-based care. And with providers participating in alternative payment models faring better during the pandemic, progress in this area could accelerate.
Stay agile in value-based care: Payers should improve their two-way data sharing with providers to increase trust and ensure mutual success under these arrangements.
3. Healthcare Costs
One bipartisan issue in healthcare and politics is both parties want to reduce costs. Policy records and proposals focus on prescription drug costs, price transparency and healthcare affordability. But approaches to this hot topic vary, and the novel coronavirus pandemic has further complicated the matter.
Prescription drug costs
Of Medicare beneficiaries that have reported struggling to pay for healthcare, for 59% of them that bill was for prescription drugs. There is broad support for bringing down drug prices, but the road to realization can be long, largely due to legal challenges and long implementation timelines. Early in 2020, makers announced price hikes on almost 450 drugs.
Both candidates support capping Medicare Part D spending, importing certain drugs, establishing international reference pricing, allowing pharmacists to counsel on cost saving opportunities, and encouraging earlier availability of generics and biosimilars. But they disagree on whether the government should negotiate drug prices directly and how or if rebates and discounts can be passed along to patients.
As healthcare costs rise, patient consumerism is rising in tandem to ensure they can afford the care they need to receive. Two initiatives promise to support this activity: price transparency and ending surprise billing. These issues have broader bipartisan support than some of the other topics we have discussed here, but the industry disagrees on how these should play out, which has stymied progress.
The Price Transparency Rule requires that hospitals publish payer-negotiated rates for 300 shoppable services, 70 of which are mandated by CMS, by early 2021. Payers can do their part by moving early on the corresponding rule. With an emphasis on the member experience, health plans can comply with data sharing mandates and satisfy demands for consumer-driven cost management.
Surprise billing bans require legislation, which stalled in favor of the coronavirus response. Both parties support eliminating out-of-network charges from certain providers that patients have little say in choosing. Payers and providers will likely need to collaborate on this issue to ensure an outcome that best benefits consumers.
Healthcare and coverage affordability
COVID-19 has dramatically affected the finances of many employers, consumers and providers. As a result, the affordability of care and insurance coverage is top of mind even more than usual. Senior consumers report issues paying for premiums and other out-of-pocket costs. And younger consumers aren’t exempt, with over a third of those under 40 reporting an impact to their health insurance.
But will the cost proposals outlined above make healthcare and coverage more affordable for consumers? Reducing prices should increase affordability, but much depends on how they are implemented. So far, according to a recent analysis, insurers believe healthcare costs will remain lower than usual into 2021, which could offset increased costs for COVID-19. As a result, premiums have increased only modestly. Additional proposals that increase competition, extend subsidies or cost-sharing assistance, and cap premiums at a percentage of income would also help on this front.
Stay agile around healthcare costs: Consider adopting advanced technology that puts you in control of your claim spend and reduces your administrative burden. Integrative platforms that harness the power of A.I. allow you to scale payment integrity efforts.
Minimize the Risks of Healthcare and Politics with Pareo
In this environment of a shifting member population, increasingly complex value-based care models, and instability on the COVID-19 and cost fronts, how will you minimize your risks in healthcare and politics?
Solutions that emphasize innovation and agility will win, no matter the political landscape. Advanced technology that provides real-time insights and harnesses the power of A.I. will better position you to maximize avoidance and recoveries at the most optimized cost. Payment accuracy technology platforms like Pareo enable you to focus on your health plan’s strengths and lean into your competitive advantages.
Now’s the time for total payment integrity
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