The 2010 Patient Protection and Affordable Care Act (ACA) called for the creation of a health insurance exchange in each state. As of the 2020 plan year, there are 13 state-based marketplaces, six state-based exchanges on the federal platform, six state-federal partnership marketplaces, and 26 fully federally-run marketplaces, altogether providing coverage for 11.4 million Americans.
The High-Cost Plan Tax, or “Cadillac Tax” was established in Section 49801 of the Patient Protection and Affordable Care Act (PPACA)1. Originally slated to be implemented in 2018, the tax has been twice delayed by Congressional action, most recently in January of 2018. Now scheduled to take effect in 2022, the excise tax will be levied on certain generous health plans.
Originally Produced: June 2013 Updated: January 2019 Implementing Value-Based Insurance Design in Medicare Advantage Introduction Due to misaligned incentives, Medicare beneficiaries currently receive too little high-value care and too much low-value care. Value-Based Insurance Design (V-BID) is an innovative approach that can address this problem when implemented correctly. The basic premise of V-BID is to align consumer incentives with value by reducing barriers to high-value health services and providers (‘carrots’) and discouraging the use of low-value health services and providers (‘sticks’). When ‘carrots’ and ‘sticks’ are used in a clinically nuanced manner, V-BID improves health care quality and controls spending growth. The concept of clinical nuance recognizes that 1) medical services differ in the amount of health produced, and 2) the clinical benefit derived from a specific service depends on the consumer using it, as well as when, where, and by whom the service is provided. [...]
Outcomes-Based Contracting with Value-Based Insurance Design: Opportunities to Drive More Health per Pharmacy Dollar
Outcomes-Based Contracting with Value-Based Insurance Design: Opportunities to Drive More Health per Pharmacy Dollar Background Reimbursement that aligns spending with quality and patient-centered outcomes is widely viewed as a key enabler of achieving more value from the $3.7 trillion Americans spend annually on health care. For drugs, outcomes-oriented contracts – financial arrangements that tie payment to achieving pre-specified clinical goals – have received increasing attention. If structured correctly, these contracts have the potential to align the interests of patients, health plans, manufacturers, and society around the shared goal of ensuring prudent use of health care resources while preserving access to care and incentives for innovation. The number of outcomes-oriented contracts is not known, since private plans and manufacturers do not have to publicly report their agreements. While some estimate that there are only 20 such agreements in effect, momentum for outcomes-oriented contracting is significant and growing.1 According to [...]
Precision Patient Assistance Programs to Enhance Access to Clinically Indicated Therapies: Right Drug, Right Time, Right Cost-Share
Precision Patient Assistance Programs to Enhance Access to Clinically Indicated Therapies: Right Drug, Right Time, Right Cost-ShareCost-Sharing and its ConsequencesConsumer cost-sharing for medical care and medications is high and getting higher. The average deductible for employer-sponsored single coverage increased by more than 250% between 2006 and 2016, and is now nearly $1,500.1 Even after any applicable deductible has been satisfied, patients are often liable for high copayments and coinsurance. The average copay or coinsurance for a fourth-tier drug in employer-sponsored coverage was $102 in 2016. In 2016, more than 25% of Medicare beneficiaries spent 20% or more of their income on out-of-pocket health care costs,2 with a significant share of this spending devoted to coinsurance of 25-33% for specialty medications. Most Medicare Part D beneficiaries taking a single specialty drug will pay no less than $2,000 over the course of one year[a].3 For Medicare Part D beneficiaries [...]
Cost-Sharing for Immunizations in Medicare: Impacts on Beneficiaries and Recommendations for Policymakers
Cost-Sharing for Immunizations in Medicare: Impacts on Beneficiaries and Recommendations for Policymakers Introduction Vaccine-preventable diseases affecting adults cost the US nearly $9 billion per year, including $5.9 billion in inpatient costs alone.1 Yet rates of vaccination among adults remain stubbornly low, with a 2012 report suggesting more than 20 million Medicare beneficiaries have not received vaccinations in accordance with evidence-based guidelines.2 Specifically, in 2014: • 28 percent of Americans age 65 and older were not vaccinated for influenza, • 38 percent of Americans age 65 and older were not vaccinated for pneumococcal disease, and • 69 percent of Americans age 65 and older were not vaccinated for herpes zoster.3 Given the high-value of immunizations and the substantial room for improvement with vaccine compliance, the Healthy People 2020 goals include numerous objectives dedicated to increasing receipt of evidence-based immunizations – including the percentage of adults vaccinated [...]
V-BID in Action: A Profile of Connecticut’s Health Enhancement Program Value-Based Insurance Design (V-BID)—hailed as a “game changer” by the National Coalition on Health Care— refers to insurance designs that vary consumer cost-sharing to distinguish between high-value and low-value health care services and providers. V-BID entails (1) reducing financial barriers that deter use of evidence-based services and high-performing providers, and (2) imposing disincentives to discourage use of low-value care. Through the incorporation of greater clinical nuance in benefit design, payers, purchasers, taxpayers, and consumers can attain more health for every dollar spent. The University of Michigan Center for V-BID leads in research, development, and advocacy for innovative health benefit plans and payment reform initiatives. Connecticut Seeks to Improve Health and Contain Costs The State of Connecticut faced a projected budget gap of $3.8 billion in fiscal year 2012, and state employees were asked to help address the [...]
A 'Dynamic' Approach to Consumer Cost-Sharing for Prescription Drugs Access to, and levels of spending on, prescription drugs has become an important public policy issue. Given the significant individual and population health gains that result from the appropriate use of prescription drugs, as well as the fiscal concerns pertaining to the escalation of health care expenditures, the development and implementation of patient-centered solutions that allow access to medications at an affordable cost are of critical importance. One common strategy that health care purchasers employ to control pharmaceutical spending is to increase consumer cost-sharing. This trend -- seen for nearly all drugs across all formulary tiers -- has proceeded regardless of the clinical benefit provided by a specific drug, with cost-sharing increasing as rapidly for high-value drugs (e.g., included in evidence-based guidelines) as for drugs deemed unnecessary or potentially harmful. 1 As consumers are asked to pay a [...]
V-BID in Action: The Role of Cost-Sharing in Health Disparities The existence of health disparities among specific populations has long been recognized; substantial variations in health insurance coverage, access to providers, use of specific clinical services, and patient-centered outcomes among different groups are well documented. Differences in levels of medical knowledge and information sources, trust and skepticism, participation, social support, and resources can vary significantly by population demographic. Adverse effects on health care equity have also been shown to be the result of clinician judgment, healthcare facility characteristics, and cultural milieu. A robust evidence base has determined that the causes of these disparate outcomes are multifactorial; including race, ethnic group, income, education, and age. It is difficult to attribute blame to any single factor, as many of the predictors are inextricably linked.1 A systematic review of extensive published research documenting the scope of disparities and summary of proposed potential [...]
Enhancing Flexibility in HSA-HDHP Design by Applying V-BID & Clinical Nuance Principles to Better Align the “Preventive Services Safe Harbor”
Shifting the health care system from “volume-to-value” has become a common theme in health care reform discussions. Benefit designs that engage consumers in their health care, while also encouraging access to high-value and appropriate care, are of particular interest.
Health Information Technology & V-BID: A Synergistic Combination IntroductionValue-Based Insurance Design (V-BID) is an innovative approach that can improve clinical outcomes and contain costs. The basic premise of V-BID is to align consumer incentives with value by reducing barriers to high-value health services and providers (‘carrots’) and discouraging the use of low-value health services and providers (‘sticks’). When ‘carrots’ are coupled with ‘sticks’ in a clinically nuanced manner, V-BID improves health care quality and controls spending growth. The concept of clinical nuance recognizes that: 1) medical services differ in the benefit provided; and 2) the clinical benefit derived from a specific service depends on the patient using it. This brief examines how the incorporation of V-BID principles into health information technology (HIT) can enhance the potential for HIT to improve quality and increase efficiency.Interoperable HIT systems, meaning systems with the capability to “talk to each other” by exchanging [...]
Narrow Networks and Value-Based Insurance Design Executive Summary Narrow networks aim to improve patient outcomes and increase quality of care by establishing a pool of providers to supply consumers with high-value, evidence-based care. This concept incorporates Value-Based Insurance Design (V-BID) principles, aligning patients’ out-of-pocket costs with the clinical value of services. However, narrow networks are often a source of confusion for consumers who may struggle to understand provider groups and performance metrics. Additionally, these value-based networks face the obstacle of ensuring an adequate network of providers for their patient population. Despite these challenges, narrow networks remain a promising alternative to traditional health coverage plans that may help contain costs, while improving patient outcomes. Background Narrow networks are a type of benefit design made popular by managed care organizations in the 1980s and 90s, and are gaining traction once again, in part due to the Affordable Care Act. Aimed at [...]
Potential Role for “Clinically Nuanced” V-BID Plans in Private Exchanges Growth in Private Exchanges Employers are increasingly challenged to offer competitive benefits that attract and retain talent while simultaneously control employee health care costs. While private exchanges have existed for over a decade, these health insurance marketplaces have recently gained popularity as an innovative tool to help employers deal with these conflicting priorities. Over 1.7 million individuals with employer-sponsored coverage enrolled via a private exchange in 2014; this number is projected to increase to 40 million enrollees by 2018.1 The increased appeal of private exchanges to employers is driven by the potential to substantially reduce administrative burden, provide a cost-effective alternative to traditional benefits purchasing, and, for some, facilitate the transition from a defined benefit to a defined contribution model. Additionally, the design and technology of these platforms show promise in allowing employers to offer their employees [...]
Supporting Consumer Access to Specialty Medications through Value-Based Insurance Design Originally Produced: June 2014 Updated: February 2017 Introduction Specialty pharmaceuticals are medications that consist of complex molecules, are often complicated to deliver, and/or carry high costs. These medications are frequently used in the treatment of rheumatoid arthritis (RA), HIV, multiple sclerosis (MS), cancer and a variety of other serious health conditions. For many patients, specialty medications represent the most appropriate clinical recommendation. However, the benefit delivered by any given medication may vary markedly depending on the particular circumstances around its use. Today, approximately a quarter of total pharmaceutical spend-ing in the commercial market is devoted to specialty medications. If current trends in utilization hold, it is estimated that spending on specialty medications will comprise half of all pharmaceutical expenditures by 2018.1 To constrain the rapid rate of increased spending, many payers have established high consumer cost-sharing requirements [...]
Consumer Operated and Oriented Plans: A Potential Role for V-BID Implementation  Originally Produced: January 2014. Updated: July 2016 Introduction Value-Based Insurance Design (V-BID) aligns consumer incentives with value by reducing barriers to high-value clinical services and providers (“carrots”) and by discouraging the use of low-value services and providers (“sticks”). V-BID is driven by the concept of clinical nuance which recognizes that: 1) medical services differ in the benefit provided; and 2) the clinical benefit derived from a specific service depends on the patient using it, who provides it, and where the service is delivered. V-BID is included in the Affordable Care Act (ACA) and a 2013 CMS rule which permits State Medicaid programs to alter co-payments for provider visits and prescription drugs. Currently, hundreds of public and private organizations utilize V-BID principles to enhance health outcomes and constrain cost growth. This brief offers an overview of Consumer Operated [...]