Health Insurance and You!

When imagining health care and the work a doctor does, most people immediately think of office visits, surgeries, and other services where the patient interacts directly and in-person with the physician. That’s how health insurance companies have traditionally thought of it as well. But doctors do a lot of work outside of those activities, such as coordinating care with specialists, paperwork, answering emails and calls from patients who don’t have appointments, and in some cases, holding office visits online after hours. Generally, insurers don’t reimburse them for these duties.

But that’s starting to change. In an article for the Connecticut Mirror, Arielle Levin Becker reports that Anthem Blue Cross and Blue Shield, a major insurer in the state, plans to start paying doctors for these non-visit activities. And Anthem is not the only one to do so, she explains, but rather the latest example of a new trend. Just this week, Aetna announced a similar program in which certain doctors who actively manage their patients’ care will receive monthly payments for that work.

It’s all part of a move toward the medical home model, which we’ve covered before in this blog. According to the American College of Physicians, this model places the personal doctor at the center of a web of continuous and coordinated care for patients, throughout their lifetime. This personal doctor organizes referrals to specialists and other providers when needed. Those who support this model, Ms. Becker writes, say that it reduces costly emergency room visits and improves the quality of care – a win-win situation.

The details of Anthem’s program have yet to be determined. So far, it includes rewards for primary care practices that show improved health outcomes and lower costs. Eventually, like in Aetna’s program, doctors who play an active role in coordinating their patients’ care will receive a monthly payment. Anthem’s goal is that one day, all primary care doctors will fit that description.

Two years from now, states and the federal government will begin operating their health insurance exchanges, online marketplaces where customers can compare the plans, prices, and networks offered by insurers in the state and enroll in the coverage of their choice. Online exchanges aren’t completely new – in fact, GetInsured.com is one of several private exchanges – but they have gained traction recently as an important part of health reform.

Now, notes Elizabeth Stawicki of Minnesota Public Radio, there is a new trend among health insurance companies: ahead of the 2014 launch of the government-run exchanges, several insurers are starting their own exchanges. Unlike the public exchanges, these sites may offer plans from only one insurer, allowing some comparison-shopping but only between the plans offered by that insurer.

But why? According to Ron Rowe of Blue Cross Blue Shield Kansas City, quoted by Ms. Stawicki, the aim is to get customers used to the format of an online exchange and familiarize them with the coverage a given company offers before the public exchanges force insurers to compete directly. Because switching plans often requires finding new doctors and hospitals, which can be unpredictable and a hassle, insurers hope that customers will develop loyalty to their plan by the time 2014 rolls around, rather than shop around for something new.

Readers, what do you think of this approach? We often suggest that you evaluate your coverage every year to make sure it’s still the best value and package for you (here and here, for example), but having to switch providers is a very real barrier to that. When you read about the plans that are out there, what factors would make you consider a switch?

The ideal doctor, from a health insurance company’s point of view, is one who provides high-quality care – reducing complications and the need for costly follow-up – at a low price. Your criteria may run along the same lines, depending on your health and insurance status. But actually measuring these factors and weighing them against one another, in a way that allows you to directly compare doctors and treatments, can get pretty tricky.

Many insurers in Massachusetts are tackling that very challenge by creating ‘tiered’ health insurance plans. In a traditional plan, like an HMO or PPO, patients are urged to keep their costs down by visiting certain providers who belong to the plan’s network, and have to pay extra for providers outside the network. In a tiered plan, insurers place providers into groups based on quality and price data. Customers can see those groups and use them to choose who they go to for a particular treatment, with lower co-payments for providers in the low-cost group. Also, premiums for tiered plans tend to be lower than those for traditional plans.

But all that flexibility is causing some confusion, writes Martha Bebinger of WBUR. Potential customers are drawn in by the lower premiums that tiered plans offer. When calculating their expected health costs, however, and trying out different scenarios based on the providers they’re likely to visit, some customers are finding that the premium savings aren’t as high as they expected. For example, going to a high-cost provider for just one emergency treatment could wipe out a year’s worth of premium savings.

To add to the confusion, Ms. Bebinger explains, different plans may put the same provider in different groups. This happens for multiple reasons, such as basing the groups on different outcomes data and measuring quality and price in different ways. Depending on their agreements with doctors and hospitals, different health insurers may pay different amounts for the same procedure by a given provider. This variation makes shopping for a tiered plan extra complicated.

Soon, insurers will be required to use the same set of quality criteria when rating hospitals and physicians, simplifying the shopping process a little bit. However, they may still weigh the criteria differently and have varying reimbursement agreements with providers.

How do you measure the value of a particular treatment? Some analysts define it as “the clinical benefit achieved for the money spent,” according to an article by Mari Edlin of California Healthline. This definition recognizes the fact that while the dollar cost of a certain procedure may be fixed, it may be more or less effective, and more or less necessary, for different groups of patients.

A new approach known as value-based insurance design (VBID) takes those factors into account. Ms. Edlin writes that the VIBD model includes adjustments to copayments and coinsurance, shared decisionmaking, network design, incentives for maintaining health, and disease management. Insurers are currently working on value-based health insurance plans with financial incentives for healthy behaviors.

Transparency of information on costs and outcomes for various patient groups is key to VBID, because this data helps patients and providers decide which treatment course to take.

Rewards for good health are another important piece of the model. Starting in 2014, employers will be allowed to reimburse employees who reach certain health and wellness targets up to 30% of their premiums. Other incentives include reducing or eliminating coinsurance for in-network providers and deposits into employees’ health savings accounts.

Ms. Edlin describes another approach to VBID known as “reference pricing,” in which there is a standard price for any treatment (including medication), and plan members cover any costs beyond that standard. Reference prices are best suited to procedures with little variation in quality that, for some reason, vary widely in cost. But when a more expensive provider does offer better quality and outcomes, they are less useful and may in fact mislead patients.

Readers, how do you define the value of a health care procedure? How do you decide whether a treatment is worth it?

Universal health care in Massachusetts, established through a major overhaul in 2006, just became a little more universal. On Thursday, the state’s highest court ruled that legal immigrants are entitled to the same health insurance subsidies as citizens. The case was filed by the Boston-based firm Health Law Advocates.

According to an article and radio broadcast by Martha Bebinger of WBUR, the ruling affects about 40,000 residents and may cost the state $150 million or more. Commonwealth Care, the state’s insurance program, currently costs about $822 million per year, writes Chelsea Conaby in an article for the Boston Globe. Massachusetts receives federal help with the cost of care for citizens but not legal immigrants, although that will change when health reform is fully enacted in 2014. Thursday’s ruling does not affect illegal immigrants, who are still not eligible for coverage through the state program.

It may be surprising that this wasn’t always the case. Ms. Bebinger explains that Commonwealth Care subsidies for legal immigrants were eliminated as the result of a tight budget in the spring of 2009. At the time, the decision saved about $130 million, according to an article by Jess Bidgood of the New York Times. As a result, the state created a separate insurance plan for immigrants known as the Commonwealth Care Bridge Program, which cost only about $40 million. But that plan, Ms. Conaby writes, had higher co-payments and a smaller provider network, and did not cover vision, hospice, or skilled nursing care. Plus, it was only open to people who were dropped from Commonwealth Care, thus excluding new legal immigrants.

While legal immigrants and their advocates are celebrating the decision, the state is debating how to pay for it. Ms. Bebinger lists some of their options, which include increasing taxes or fees to fund the program, scaling back other programs, or cutting health insurance subsidies for all residents. Whatever the decision, it will have to be included in Massachusetts’ budget for fiscal year 2013, which will be filed in the next few weeks.

Happy New Year, readers!

Many of you will have started 2012 with new year’s resolutions that relate to your health in some way. Besides improving your quality of life, avoiding obesity and changing your health behaviors can significantly cut down on your health insurance premiums. And in these times of rising insurance costs, every little bit helps.

Quitting smoking is a good example, explains Michelle Andrews in an article for the Washington Post. People who don’t smoke have much lower health insurance premiums and lower total health costs than those who do. And if you’re considering quitting, now’s a good time to make that attempt; employers, wanting to save on their employees’ health costs, are offering incentives for quitting smoking. For example, Ms. Andrews writes, about two-thirds of large companies and one-third of small companies are offering smoking cessation programs to their workers.

On the flip side, state funding for smoking prevention and quitting programs has declined quite a bit in recent years. While many states make an effort to use the money from tobacco taxes and an earlier tobacco settlement for health programs, specifically relating to smoking, they’re not always able to do so. This year, states are spending an average of less than 2% of tobacco-related revenue on smoking prevention and cessation. In the past four years, that number has decreased by 36%, or $457 million.

Health reform expanded coverage for smoking cessation programs, though. New health insurance plans – those that were not grandfathered in at the time of the overhaul – must screen adults for their smoking status and provide free cessation help to those who need it. States must also cover cessation programs for pregnant women enrolled in Medicaid. Federal officials have not yet clarified what kinds of programs are included in the rule or how long they must run.

Once in a while – and not as rarely as you might think – a health insurance company may change its mind about covering a medical procedure or appointment that it had previously approved. This can leave you, the consumer, in a real bind, especially if the treatment has already taken place and the claim has already been paid. Caleb Hellerman describes this reversal of coverage decisions in a blog post for CNN’s health blog The Chart.

Fortunately, consumers don’t always have to pay when the insurer reverses a decision. Sometimes, Mr. Hellerman explains, the hospital or other medical facility where the treatment occurred will negotiate directly with the insurance company, settling any expenses between them. States also have laws regulating insurers’ actions, including coverage decisions. Although those laws vary from state to state, insurance companies may take as long as a year to review claims that they have already processed and re-evaluate any of those decisions.

If you do end up liable for a reversed decision, you have the right to appeal the new claim before or after treatment, according to last year’s health reform law. Appealing may reduce or eliminate your balance, but that isn’t guaranteed. Instead, Mr. Hellerman writes, it could be better to lower your risk of a reversal in the first place. He provides some tips:

• Make sure your insurance company has pre-approved your treatment, especially if it’s expensive.
• If you have to appeal a coverage decision – any decision, not just one that was reversed – enlist some help. Try asking your doctor, your clinic administrative office, human resources office, or a nonprofit patient advocacy group.
• Stick with the appeals process, even if you have to go through multiple steps.
• When justifying a claim, focus on the functional reasons why you needed the treatment. Procedures that are seen as cosmetic are less likely to be considered medically necessary.
• Consider getting a lawyer.

Generally, employers contribute to employee health insurance in one of two ways. With defined benefits – currently the more common approach of the two – employees are guaranteed coverage for a certain, predetermined set of benefits, whether they use that coverage often or not at all. With defined contributions – rarer but becoming more popular – it is the employer’s contribution that is predetermined, and the employee chooses how to spend that finite amount.

For relatively healthy people with no major health events, the two approaches have similar results. The main difference lies in who takes on the risk of high or unexpected medical expenses. When benefits are defined, the employer takes the risk; when contributions are defined, it’s the employees and their families.

In a recent article for Business Week, former director of the Office of Management and Budget and current Citigroup executive Peter Orszag writes that the defined contribution approach is here to stay. He adds that the shift away from defined benefits, already under way by last year, was accelerated by health reform.

Retirees were the first to experience this change. Years ago, retiree health insurance was much like employee coverage with a set of defined benefits. But starting in the 1990s, employers began to limit the total amount they would pay. Retirees who reached this cap were put in the same situation as employees who have exhausted their employer’s contribution.

Consumer-driven health plans, which tend to have high deductibles and be paired with a health savings account, are an early step toward defined contributions for employees, says Mr. Orszag. An important difference, though, is that consumer-driven plans still have a safety net for costly, unexpected medical emergencies. Although most employees have traditional health plans, more and more companies are offering and encouraging consumer-driven options.

So, where does health reform come in? Last year’s overhaul made plans more comprehensive by requiring that they cover certain essential benefits – though a list of those benefits has yet to be finalized. That would add to the risk an employer is taking. Also, Mr. Orszag explains, having direct access to defined-contribution plans through online health insurance exchanges will make consumers more familiar with them, speeding up their adoption nationwide.

Other predictions for the future of health insurance, according to an earlier post on our blog, include an increase in reference-based pricing and the continued creation of accountable-care organizations. What sorts of trends do you expect to see? Do you approve?

As health reform takes effect in the next few years, many people will have access to affordable health insurance coverage for the first time, through online exchanges that make it easier to compare plans and enroll, as well as new federal and state programs for several categories of patients. But are there enough doctors to see all of the newly insured?

That’s the topic of a recent blog post by Fred Mogul of the WNYC News Blog. According to a study by the New York City Health Department and outside partners, which looked at the number of primary care physicians in different neighborhoods in all five boroughs, access to a doctor varies widely depending on what neighborhood you’re living in. National recommendations call for about 50 primary care doctors per 100,000 people in a community. Within New York, the analysis found, actual numbers range from 34 per 100,000 in the North Bronx to 261 per 100,000 in the Upper East Side. Manhattan and Brooklyn tended to have more primary care doctors than other boroughs.

When Massachusetts implemented its own health reform law about five years ago, it experienced a similar increase in the number of people with health coverage (now about 95% of residents), Mr. Mogul writes. Since then, the state has seen shortages of doctors that cause patients to wait longer for an appointment.

But there are other factors to be considered, in both the New York City area and the rest of the country, which may provide a more positive outlook. While living near your primary care physician’s office is convenient, people already travel out of their neighborhoods for health care for reasons like staying within their insurance network, finding a doctor who they like, or choosing an office near their workplace. In metropolitan areas, public transportation can make this easy.

In addition, notes a commenter on the WNYC blog, primary care physicians aren’t the only source of primary care in underserved areas. Community health care clinics, nurse practitioners, and physician assistants, who are also important providers in those areas, were not included in the city’s study.