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As Premium Growth Slows, Health Plan Deductibles Rise

Annual family premiums for employer-sponsored health insurance rose an average of 3 percent to $18,142 this year, a modest increase at a time when workers’ wages (2.5 percent) and inflation (1.1 percent) also grew modestly.

Workers on average contribute $5,277 annually toward their family premiums, according to the benchmark 2016 Employer Health Benefits Survey (www.shrm.orghttp://www.kff.org/ehbs), released in September by two nonprofit health research organizations: the Kaiser Family Foundation (KFF) and the Health Research & Educational Trust (HRET). The survey is based on responses from more than 1,900 small and large employers contacted through June 2016.

This year’s low family premium increase is similar to last year’s (4 percent) and reflects a significant slowdown over the past 15 years. “We’re seeing premiums rising at historically slow rates, which helps workers and employers alike, but it’s made possible in part by the more rapid rise in the deductibles workers must pay,” said KFF President and CEO Drew Altman.

The recent trend in part reflects covered workers moving into high-deductible consumer-directed health plans (CDHPs) compatible with health savings accounts (HSAs) or tied to health reimbursement arrangements (HRAs) – here’s how HSAs and HRAs differ (www.shrm.org/resourcesandtools/hr-topics/benefits/pages/hrasandhsasanoverview.aspx). These plans have lower average premiums than other plan types.

In 2016, 29 percent of all workers were in CDHPs, up from 20 percent in 2014, while a shrinking share of workers (48 percent in 2016, down from 58 percent in 2014) are enrolled in preferred provider organization (PPO) plans, which have higher-than-average premiums.

Read the full article here.

 

The Vexing Economics of Obamacare

Will anyone be able to figure out American health care? So far, perhaps the world’s most byzantine arrangement of doctors, hospitals, clinics, contractors, pharmaceutical companies, private insurers, public insurers, medical schools, nursing homes, and dozens of other stakeholders has been less a coherent system than a collection of discount-furniture bits and pieces thrown on a floor with no instructions for assembly. Each individual piece usually works well and America’s doctors especially do pretty good jobs—that’s why they earn the big bucks—but fusing these disparate components to make a coherent health economy has often looked more like alchemy than science.

The Affordable Care Act has been the most recent attempt at transmuting the pieces of health care into a well-functioning whole. Recent news, however, including Aetna’s sudden exit from states’ health-insurance exchanges and forecasts of a spike in insurance premiums, has cast serious doubt on the chances of that undertaking succeeding. Is this turbulence to be expected or is it a sign that Obamacare is buckling under the strain of impossibility?

American health-care reform has always struggled to align two concepts that tend to be inversely related: access and affordability. Care is expensive to provide, but it doesn’t quite adhere to classic supply and demand curves for a number of reasons, including the fact that health insurance shields most patients from direct costs and because the government is so heavily involved in the market. Insurance is usually a good thing for patients, though, because it is the only thing that allows many Americans to afford even some basic health services without going bankrupt.

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U.S. wants letters showing conflict in Anthem-Cigna merger -filing

The U.S. government, which is suing to stop Anthem Inc’s proposed purchase of Cigna Corp , is pressing the health insurers to provide letters in which each of them accused the other of breaching the merger agreement, according to court documents filed on Wednesday.

Anthem and Cigna agreed last year to merge in a $45 billion deal that would create the largest U.S. health insurer, but disagreements became public in the spring.

The Justice Department sued in July to block the deal, saying it would stifle competition. Trial has been set for Nov. 21, with a decision expected in January.

In the documents, the Justice Department said it had asked a special master, a court official who manages cases, to force the insurers to produce letters between their attorneys related to the alleged breaches of the merger agreement.

The department said the letters were relevant because they “reveal the current state of hostility between defendants,” and the companies argued that the merger would create efficiencies that save consumers money.

Anthem spokeswoman Bonnie Jacobs said in an email that “Anthem remains firmly committed and focused on defending the litigation.”

Read the full article here.

Labor, IRS Propose New Health Plan Reporting Requirements; CMS Makes Its Case On Cost Sharing

Most of the regulations and guidance analyzed in the “Following the ACA” Health Affairs Blog series are issued by the Centers for Medicare and Medicaid Services of the Department of Health and Human Services. HHS shares jurisdiction over the implementation of the ACA’s insurance reforms, however, with the Employee Benefits Security Administration (EBSA) of the Department of Labor (DOL) and the Internal Revenue Service (IRS) of the Department of the Treasury. On July 11, EBSA posted a proposed rule on annual reporting and disclosure while EBSA, the IRS, and the Pension Benefit Guaranty Corporation (PBGC) posted an identical proposed revision of annual reporting forms and reports.

The proposed regulation relates to revisions to Form 5500, the Annual Return/Report of Employee Benefit Plans and Form 5500-SF, Short Form Annual Return/Report for Small Employee Benefit Plans. Pension and other employee benefit plans have long been required to file the form 5500, which focuses on the financial condition and operation of such plans. Form 5500 serves as an important disclosure document for plan participants and beneficiaries, but also serves as a critical enforcement, compliance, and research tool for EBSA, the IRS, and the PBGC; it also provides information for other federal agencies, Congress, and the private sector as well.

There are an estimated 2.3 million employee health plans covering, together with other health and pension plans, roughly 143 million private sector workers, retirees, and dependents. These numbers dwarf the numbers of plans and enrollees participating in the marketplace. Form 5500 is the primary source of information, funding, and investments of these plans.

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Helping Consumers Understand High Prescription Drug Prices

The affordability of prescription drugs is an increasingly serious problem for millions of Americans.

In an April 2016 survey, AARP asked 2,000 adults aged 50 or older if, in the past two years, they had not chosen to fill a prescription, and if so, why. The no. 1 answer, by a country mile, was “cost of the drug,” supplied by 55 percent of those who hadn’t filled a prescription. (The second place answer was “did not think drug was necessary,” by 28 percent.) 32 percent said that “cost of the drug” was the main reason for not filling a prescription.

The poll is one of many indicating that Americans are worried about high drug prices. It doesn’t help that federal agencies, like the FDA, actively encourage high prices by creating artificial monopolies for old, unpatented drugs that should be inexpensive, like epinephrine, the active ingredient in Mylan’s EpiPens.

Part Six of the new edition of Transcending Obamacare, FREOPP’s first publication, is dedicated to making innovative medicines affordable. In it, I discuss the problem of artificial monopolies for unpatented drugs:

Most recently, Mylan attracted controversy for raising the price of its EpiPens, which deliver epinephrine in the event of a life-threatening allergic attack called anaphylaxis, from $100 to $600 per pen. Epinephrine, also known as adrenaline, was first isolated in 1901, and has long been off-patent. But Mylan’s autoinjector has been approved by the FDA specifically for treatment of anaphylaxis, and the agency has made it extremely difficult for would-be competitors to gain approval for similar devices.

Mylan also lobbied Congress to fund the deployment of EpiPens in public schools across the country, further entrenching its monopoly.

Read the full article here.