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Mercer

This post is part of our “Driving Transformation” series, in which Mercer consultants share key take-aways for employers from the 2016 Oliver Wyman Health Innovation Summit, a recent conference hosted by Mercer’s sibling firm, management consultant Oliver Wyman.  

 

The rise of the consumer has already caused a seismic shift in the strategic direction for most hospitals and health systems. These providers recognize the imperative to find new and different ways to demonstrate value across the care delivery continuum. This means focusing attention on what consumers of most products and services look for: cost, quality and an engaging and convenient experience. Integrated clinical and commercial strategies must be developed to successfully address each of these elements.  With increased focus on improving population health and patient satisfaction, re-thinking how multi-generational consumers access healthcare providers will be critical to future success. There will be various patient-centric “front doors” to healthcare, including retail health, telemedicine, onsite clinics, digital health, care navigation and a re-invented doctor’s office experience.

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With this post, we at the blog are officially kicking off annual planning for 2018. Over the coming weeks, we’ll be offering advice and check lists for 2018, including some special to-do’s for prescription drugs and time-off benefits. We thought a good place to start this year is with a list of best practices. The list below contains 25 health benefit best practices from the Mercer National Survey of Employer-Sponsored Health Plans. Each year we compare the performance of employers that use the most of these best practices with those using the fewest (the top and bottom quartiles). And each year we find that those using the most best practices have lower average healthcare cost increases. (In 2016, the two groups had average increases of 3.8% and 4.8%, respectively.)

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House Republican leaders are working to win the votes needed to pass a revised version of their health care reform bill, the American Health Care Act (AHCA), that aims to lower health insurance premiums for some individuals by letting states obtain waivers to opt out of the Affordable Care Act's (ACA) essential health benefits, community rating, and age banding requirements.

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It has been a month since the American Health Care Act was pulled because House Republicans lacked the votes to advance it to the Senate. Here’s a run-down of all that has happened since then, including our perspective on what it means to employers.

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Offerings of HSA-eligible high-deductible health plans have more than doubled in the past five years. Our 2016 National Survey of Employer-Sponsored Health Plans found that more than half of large employers (53%) now provide this type of plan to their employees, and nearly a quarter of employees (24%) are enrolled. At the same time, there has also been steady growth in offerings of onsite and near-site medical clinics, especially among the largest employers: About a third of employers with 5,000 or more employees provide a clinic for primary care services. An onsite clinic offers the maximum opportunity for control over quality, and more than half of the clinic sponsors in another Mercer survey said that their clinic is integrated with their population health efforts.

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The stalled House ACA repeal and replace effort means the next crucial decision about the ACA’s future will probably be made by the White House. Following the canceled vote on the American Health Care Act (AHCA), the immediate concern on the health reform front is whether President Trump is serious about his threat to let the ACA “explode” – to use his term.

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Click here to see the full infographic

 

We’ve been tracking the growth of consumer-directed health plans in our national survey for years.  Now policymakers in Washington are signaling interest in liberalizing health savings account rules, intensifying the focus on high-deductible plans that would be eligible for an HSA. While the majority of large employers already offer CDHPs – among the largest they are nearly ubiquitous – most often they are offered as a choice, not as the only medical plan. Building enrollment in a CDHP offered as a choice has proven to be challenging, but it can be done. In this infographic, we present survey findings that should be of interest both to employers thinking about a full replacement strategy and to those committed to offering a CDHP as a choice but looking to encourage more employees who could benefit to make the move. 

 

 

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Just a few days after the dramatic collapse of efforts to pass the House GOP’s American Health Care Act, more than 1,300 folks with an interest in employer-sponsored health benefits joined a Mercer webcast* to learn a) what the heck just happened, b) now what, and c) what does this mean for employer health benefits? A team from our Washington Resource Group aced the first question and gave as good a look into the future as possible without a crystal ball. 

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After their failed attempt to pass ACA repeal and replace legislation, President Trump and House Speaker Ryan indicated that they were “moving on” to other legislative priorities. On Tuesday, we learned that Republicans have restarted their conversations about healthcare. On Wednesday, Bloomberg reported the GOP was discussing a new vote as early as next week.

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A couple of weeks ago (feels like ages) we launched a brief survey to find out where employers stood on specific provisions in the House GOP repeal-and replace-bill, the American Health Care Act (AHCA). We closed the survey on Thursday with more than 900 responses.  As I was reviewing the results on Friday, the bill was apparently dying -- but now House leaders and President Trump are signaling that it may be revived. Either way, the health reform debate is far from over, and many of the provisions introduced in the AHCA will likely remain part of the discussion.

 

The survey asked health benefit professionals how key provisions would affect their organization’s health benefit program, employees, and business success -- as opposed to how they might affect the individual market or people without access to employer-sponsored health insurance. They could also respond that the provision would not affect their organization one way or the other. 

 

HSA changes, repeal of employer mandate seen as positive

We didn’t ask for an overall opinion of the bill, but employers’ reactions to individual provisions added up to a less-than-ringing endorsement. To start with what they liked: 66% said that liberalizing HSA rules -- such as allowing higher contributions -- would have a positive effect on their organizations. That’s in the ballpark of the percentage of large employers nationally that offer HSA-eligible plans (53% in 2016). If you don’t offer an HSA-eligible plan and don’t intend to, or if you do offer one but none of your employees are likely to hit the maximum account contribution, you might not believe this provision would have much of an impact, like 29% of our respondents. 

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Last week Republican leaders abruptly canceled a House vote on the proposed American Health Care Act (AHCA) because it was clear that it wouldn’t pass. At a March 24 press conference, Speaker Paul Ryan, R-WI, said that the party will now "move on" to tax reform and other policy priorities.

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One possible fix for the public exchanges? Repeal the ACA provision expanding dependent coverage.  Allowing young adults up to age 26 to be covered under their parents’ plans has been one of the law’s most popular provisions, especially since it went into effect at a time when many young people were struggling to find full-time work in the wake of the recession. But it also took these same people out of the potential pool of enrollees when the exchanges opened in 2013. While many factors have contributed to premium spikes in exchange coverage in some states, one quoted across the board has been that fewer young people than expected signed up for coverage. Had young adults not been able get coverage through their parents’ plans, it’s possible a portion of them would have signed up for exchange coverage. And having these younger, and generally healthier (i.e., lower risk) individuals in the pool might have helped to keep the premiums down. 

 

Leading up to Thursday’s vote in the House on the AHCA, the GOP’s repeal and replace bill, lowering the dependent eligibility age to 23 was on the list of possible amendments but then withdrawn. As acknowledged in thisPolitico article, repealing the provision would be political suicide for anyone that proposes it; people don’t react well to losing a benefit they’ve gotten used to having. Yet the upsides for removing this provision are, in principle, aligned with GOP repeal and replace goals, namely, removing additional costs imposed through the ACA and helping to stabilize the individual market.

 

One approach might be to phase out this provision, or grandfather individuals born before a certain date, so that families have time to prepare and plan for alternative coverage for their older children. Of course, this only works if there’s an affordable health care option for these young adults on the exchanges. If the current subsidies are reduced to the levels proposed under the AHCA (an individual under 30 would only receive $2,000 towards health coverage per year regardless of income or location beginning in 2020), then leaving these individuals to the mercy of the individual market may not be wise; it could create a “black hole” of coverage from age 26 perhaps until the age when people are starting their families and see an absolute need for care.  So while employers as well as the individual market could benefit from a rollback of this provision, adequate subsidies on the exchanges would need to be in place to help these individuals purchase and maintain continuous coverage.

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Before the ACA, many self-employed individuals found it challenging to find a health plan on the individual market that met their needs, let alone to pay for it. Post ACA, the ability to obtain affordable coverage not tied to an employer has givenentrepreneurs in the growing ‘gig’ economy the flexibility to pursue their goals without having to worry about maintaining health coverage.  These days may be coming to an end if the new GOP health care bill passes, however.  Under theAmerican Health Care Act or AHCA, subsidies are dependent on age, as opposed to income (like under the ACA), and are not adjusted for geography, even though health costs vary widely depending on where you live.  This could mean big changes in the amount of assistance an individual would receive under the AHCA compared to under the ACA.  As cited in the article, a 40 year-old in San Francisco making $30,000 a year would receive $800 less a year under the new plan, and a 40 year-old living in Santa Cruz County, CA would see a $2,490 less per year -- potentially putting coverage out of reach. 

 

A study published by the McKinsey Global Institute estimates that U.S. has between 54 million and 68 million ‘independent workers’, with some working independently full-time and others using independent/freelance work to supplement their primary income. With the proposed changes under the AHCA, some individuals may try to seek traditional employment for the purpose of healthcare coverage, or they may just choose to go without coverage completely. While critics of ACA subsidies have said they discourage people from seeking employment or advancing their careers since an increase in income would result in a decrease in subsidies, this new plan could have the same discouraging impact on the next generation of entrepreneurs.  

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