Eroding Employer Coverage Squeezes Average Americans
A good Health Affairs Forefront Blog on eroding employer coverage and the impact on the lowest tier of working Americans.
The article does a good job of discussing the chasm between what private healthcare coverage pays providers and what government programs pay. It notes that statistics bear out that price and not utilization largely drives spending growth in the employer market. It says U.S. hospitals charge privately insured patients nearly 2.5 times more than what Medicare pays for the exact same service.
The articles disclaims that there is a cost-shift, but instead says it is related to provider market power. Well, I still think there is a cost-shift to some degree that is occurring, but I can also buy the author’s market power argument.
The article notes that the price differences are a systemic issue and those who ultimately pay the price are “workers via a series of damaging, indirect mechanisms.” It dives deep into the fact that employers now are cost-shifting to workers. Because of the ongoing cost burden of healthcare, employers are moving employees into high-deductible health plans. The average annual deductible for a worker with single coverage has surged 47% over the past decade. The articles say people are quickly becoming underinsured – hey that’s my line. They cannot afford to use their healthcare.
The article points to the consequences – one in four delay or forego care. That has major health impacts and increases costs down the road.
The cost-shift from employer to workers hits those who can least afford it — the lowest-paid workers. Spiking healthcare costs also lead to job losses, and these same workers are usually targeted first. The lowest paid also have mountains of medical debt.
The authors see a need to challenge on anti-trust issues, regulate price, and empower purchasers through transparency. The authors conclude: “Reining in exorbitant commercial provider prices is not simply an exercise in controlling healthcare spending; it is a fundamental prerequisite for restoring economic fairness for US workers and fostering a more dynamic and competitive national economy.”
Well said.
(Article may require a subscription.)
#employercoverage #healthcare
Health Affairs Covers Medicare Advantage In Depth
The August edition of Health Affairs Journal (not the Forefront Blog) has here articles covering various Medicare Advantage (MA) issues. Overall, the articles are a good read as you will learn of the history of Medicare managed care, various changes brought about by major legislation, and the issues and controversies of the day. Be cautious of some things, such as the authors citing dubious overpayment statistics and favorable selection.
One article puts some of the overpayment controversy in better context. The authors indicate: “The primary reason that the MA program does not save money for Medicare is not the failure of MA plans to induce more efficient care delivery. Instead, it reflects MA payment policies that, intentionally or unintentionally, increase payments to MA plans that finance lower premiums, reductions in out-of-pocket cost sharing, and supplemental benefits.” As I note, some of the overpayments were deliberate decisions by Congress – the ultimate policy maker.
The articles also cover some of the reasons for MA’s ongoing growth, despite projections after the passage of the Affordable Care Act that MA would contract due to major changes. It didn’t, largely because of risk adjustment practices, Star bonuses, aging, and marketing practices.
Several possible reforms are cited, including addressing overpayments and upcoding, rate-setting and quality bonus reform, enhancing competition and transparency for beneficiaries, reforming Medigap, and slimming down MA to augment traditional Medicare. On the last point, I disagree. It would create more waste and abuse in the program.
Additional articles: https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2025.00718 and https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2025.00713
(Articles may require a subscription.)
#medicareadvantage #star #quality #overpayments #riskadjustment #medicare
https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2024.01546
Hard-Hitting Governing Article On IL Medicaid Managed Care
A very interesting article about Medicaid managed care practices in Illinois Medicaid. I often think providers tend to overplay the prior authorization and claims burdens they have, but it is hard not to conclude that there are serious issues in Illinois Medicaid after reading this article. Limited data suggests claims have been denied at rates as high as 17.5% over the years. And that does not include the average of 59% percent of appealed denials that are later overturned. Providers complain supremely about admin costs, delayed reimbursement, and financial distress. Some stop accepting Medicaid altogether, which impacts access.
#medicaid #healthplans #managedcare #priorauthorization #claimsdenials #providers
— Marc S. Ryan
