IssueThe German health care system resembles that of the United States in important ways — it is financed by multiple private payers and relies principally on negotiation rather than regulation to establish prices. New drugs that offer minimal benefits compared with existing alternatives within a therapeutic class are subject to reference pricing; those with incremental benefits are subject to price negotiations. Together, the reference and negotiated pricing systems have held German prices substantially below U.S. equivalents.GoalTo describe the German reference-pricing system and compare it to tiered formularies and consumer cost-sharing in the United States.MethodsDocument review and interviews with leaders in payer, policy, and pharmaceutical industry organizations in Germany.Key Findings and ConclusionsThe German pharmaceutical pricing system uses modest levels of consumer cost-sharing to influence consumers’ choices for drugs with therapeutically equivalent alternatives. Manufacturers are free to set the prices of their products, but insurers will not pay more for a new drug than for its comparators unless it offers an additional clinical benefit. For drugs covered by reference pricing, the insurers’ payment maximum is set at a level that ensures sufficient choices of low-priced options. These models offer an alternative to the U.S. system of tiered formularies.
Issue:When discussing universal health insurance coverage in the United States, policymakers often draw a contrast between the U.S. and high-income nations that have achieved universal coverage. Some will refer to these countries having "single payer" systems, often implying they are all alike. Yet such a label can be misleading, as considerable differences exist among universal health care systems.Goal:To compare universal coverage systems across three areas: distribution of responsibilities and resources between levels of government; breadth of benefits covered and extent of cost-sharing in public insurance; and role of private insurance.Methods:Data from the Organisation for Economic Co-operation and Development, the Commonwealth Fund, and other sources are used to compare 12 high-income countries.Key Findings and Conclusion:Countries differ in the extent to which financial and regulatory control over the system rests with the national government or is devolved to regional or local government. They also differ in scope of benefits and degree of cost-sharing required at the point of service. Finally, while virtually all systems incorporate private insurance, its importance varies considerably from country to country. A more nuanced understanding of the variations in other countries' systems could provide U.S. policymakers with more options for moving forward.
Issue Pharmacy benefit managers (PBMs) are responsible for negotiating payment rates for a large share of prescription drugs distributed in the U.S. Recently, policymakers have expressed concern that certain PBMs' business practices may not be consistent with public policy goals to improve the value of pharmaceutical spending. Goal We sought to explain key controversies related to PBM practices and their roles in driving value in the pharmaceutical market. Methods Literature review and feedback from top experts on PBM business practices and potential policy solutions. Key Findings and Conclusion In some cases, PBMs' use of rebates has contributed to high pharmaceutical costs, yet proposed solutions to the rebate controversy--including passing the rebate through to payers or patients--will not on their own reduce overall pharmaceutical spending without other policies that drive toward value. Policymakers seeking to reform pharmaceutical reimbursement beyond the practice of rebates will need to consider these changes in light of the recent mergers between PBMs and insurers and the entry of new market competitors.
Issue:Serving Medicare beneficiaries with complex health care needs requires understanding both the medical and social factors that may affect their health.Goal:Describe the prevalence and characteristics of high-need individuals enrolled in the Medicare Advantage program.Methods:Analysis of the 2015 Medicare Health Outcomes Survey.Key Findings:Thirty-seven percent of enrollees in large Medicare Advantage plans have high needs, requiring both medical and social services. Individuals with high needs are more likely to report having limited financial resources, low levels of education, social isolation, and poor health.Conclusion:Federal policymakers should consider allowing Medicare Advantage plans to identify high-need beneficiaries based on their medical and social risk factors, rather than just medical diagnoses. Doing so would enable plans to deliver better-targeted services that meet their members’ needs and facilitate implementation of the CHRONIC Care Act provision that allows plans to offer nonhealth supplemental benefits.
Issue Medicare Advantage (MA), the private option to traditional Medicare, now serves roughly 37 percent of beneficiaries. Congress intended MA plans to achieve efficiencies in the provision of health care that lead to savings for Medicare through managed competition among private health plans. Goal Two elements are needed for savings to accrue: a sound payment policy and effective competition among the private plans. This brief examines the latter. Methods We use data from 2009–17 to describe market structure in MA, including the insurers offering plans and enrollment in each U.S. county. We measure both actual and potential competitors for each county for each year. Key Findings and Conclusions MA markets are highly concentrated and have become more concentrated since 2009. From 2009–17, 70 percent or more of enrollees were in highly concentrated markets, dominated by two or three insurers. Since the payment system used to reimburse insurers selling in the MA market relies on competition to spur efficiency and premiums that more closely reflect insurers' actual costs, these developments suggest that taxpayers and beneficiaries will overpay. We also find an average of six potential entrants into MA markets, which points to a source of competition that may be activated in MA. To tap into potential competition, further research is needed to understand the factors affecting entry into MA markets.
Issue:Republicans and Democrats agree on prioritizing choice in health insurance, but disagree on what it entails and how to achieve it. Choice and competition can create negative consequences, including adverse selection and consumer confusion.Goals:Examine the experiences of the Affordable Care Act’s marketplaces and recommend ways policymakers can harness choice and competition to improve coverage, satisfaction, and affordability.Methods:Review of existing evidence.Key Findings:There are multiple areas where insurance design could promote efficient competition and consumer choice. Experiences with the ACA have shown that health insurance marketplaces should include an urban area with adjacent rural and suburban communities to promote competition among insurers. Other recommendations include allowing smaller insurance carriers to base medical loss ratio rates on past years’ data; allowing insurers to bid against each other for contracts to serve a population; providing resources to allow consumers to make informed choices; and including features like essential health benefits to counteract adverse selection.Conclusion:Markets can deliver efficient premiums, access to care, and consumer satisfaction but only when they are carefully designed and actively managed through regulation.
Issue:In addition to medical care, individuals with functional or cognitive impairment often require long-term services and supports (LTSS), which Medicare does not cover. Little is known about the additional out-of-pocket expenses that individuals and their families incur to meet these needs.Goal:To analyze medical and LTSS spending among older Medicare beneficiaries, particularly the costs of assistive devices and personal care and the ways those costs are met.Methods:Descriptive analyses of the National Health and Aging Trends Study (NHATS), 2015.Key Findings and Conclusions:Beneficiaries with high LTSS needs have higher Medicare and out-of-pocket spending than those without such needs and are more likely to report that medical care makes up part of their credit card debt. Those with high LTSS needs are also more likely to report trouble paying for food, rent, utilities, medical care, and prescription drugs. Many older Medicare beneficiaries using LTSS are vulnerable to incurring substantial costs. Without an affordable, sustainable financing solution, Medicare beneficiaries with LTSS needs will continue to be at greater risk of delaying necessary care, being placed in a nursing home prematurely, and having to "spend down" into the Medicaid program.
Issue:Older adults' needs have evolved and are no longer met by the Medicare program. With the recent passage of the Bipartisan Budget Act of 2018 (BBA), Medicare Advantage (MA) plans can now provide beneficiaries with nonmedical benefits, such as long-term services and supports (LTSS), which Medicare does not cover.Goal:To examine the use of LTSS among Medicare beneficiaries age 65 and older living in the community and explore differences by age, income, and other variables.Methods:Descriptive analyses of the National Health and Aging Trends Study (NHATS), 2015.Findings and Conclusions:Two-thirds of older adults living in the community use some degree of LTSS. Reliance on assistive devices and environmental modifications is high; however many adults, particularly dual-eligible beneficiaries, experience adverse consequences of not receiving care. Although the recent policy change allowing MA plans to offer LTSS benefits is an important step toward meeting the medical and nonmedical needs of Medicare beneficiaries, only the one-third of Medicare beneficiaries enrolled in MA plans stand to benefit. Accountable care organizations operating in traditional Medicare also should have the increased flexibility to provide nonmedical services.
Issue:With many states expanding Medicaid eligibility, individuals leaving jail or prison are now often able to enroll in health coverage upon release. It is increasingly clear, however, that coverage alone is insufficient to address the often complex health and social needs of people who cycle between costly hospital and jail stays.Goals:To identify emerging trends in the care delivery models that state Medicaid programs use for former inmates.Methods:Literature review and interviews with state officials, plans, and providers.Key Findings:The care delivery models for individuals leaving jail or prison provide comprehensive primary care, typically including: data exchange to ensure providers are notified when someone is leaving jail or prison; “in-reach” to help inmates establish a relationship with a primary care provider prior to release, identify health conditions, and set up community-based care; strategies for addressing housing issues and other social determinants of health; use of a peer-support specialist who has experienced incarceration; and specialized training for primary care providers and specialists who work with the formerly incarcerated.Conclusion:With a foundation of insurance coverage, states have developed a range of promising, replicable approaches to providing care to people leaving jail or prison.
Issue:New payment and care delivery models such as accountable care organizations (ACOs) have prompted health care delivery systems to better meet the requirements of their high-need, high-cost (HNHC) patients.Goal:To explore how a group of mature ACOs are seeking to match patients with appropriate interventions by segmenting HNHC populations with similar needs into smaller subgroups.Methods:Semistructured telephone interviews with 34 leaders from 18 mature ACOs and 10 national experts knowledgeable about risk stratification and segmentation.Key Findings and Conclusions:ACOs use a range of approaches to segment their HNHC patients. Although there was no consistent set of subgroups for HNHC patients across ACOs, there were some common ones. Respondents noted that when primary care clinicians were engaged in refining segmentation approaches, there was an increase in both the clinical relevance of the results as well as the willingness of frontline providers to use them. Population segmentation results informed ACOs’ understanding of program needs, for example, by helping them better understand what skill sets and staff were needed to deliver enhanced care management. Findings on how mature ACOs are segmenting their HNHC population can improve the future development of more systematic approaches.
ISSUE: The Affordable Care Act (ACA) regulates the price of health plans sold in the nongroup market. Premiums cannot be based on gender or health status, and price increases related to age are limited. These changes have lowered premiums for older, sicker people but raised them for younger, healthier ones — especially young men ineligible for premium subsidies. This has raised concerns that the latter have failed to gain coverage. GOAL: Compare the impact of the ACA’s rating rules on the number of insured young men, older adults, and others. METHODS: We compared overall and nongroup coverage trends preand post-ACA among demographic groups, comparing residents of states where the rule changes had little effect on premiums to states where the rules had greater effect. FINDINGS: People whose premiums fell because of the ACA’s rating rules were slightly more likely to get nongroup coverage than those whose premiums rose. All groups, including higher-income young men, gained coverage because of the combined effects of ACA changes. CONCLUSION: Coverage rose after the ACA took effect among all demographic groups. Taken together, the ACA’s individual mandate, marketing efforts, and effects on how people perceive the value of having insurance outweighed the impacts of changes in rating and benefit rules. KEY TAKEAWAYS The Affordable Care Act’s rules limiting how much insurers can charge for health coverage led to lower premiums in the nongroup market for older, sicker people but higher premiums for younger, healthier ones — especially higher-income young men not eligible for premium subsidies. Nonetheless, coverage rates rose for all groups, including higherincome young men. Other factors, including the individual mandate and the perceived value of having insurance, appeared to have outweighed the impact of the ACA’s rating and benefit rules. ISSUE BRIEF APRIL 2018 How the Affordable Care Act Has Affected Health Coverage for Young Men with Higher Incomes Sherry Glied Dean Robert F. Wagner Graduate School of Public Service New York University Ougni Chakraborty Junior Research Scientist Robert F. Wagner Graduate School of Public Service New York University
Issue:With thousands in Arkansas losing their Medicaid benefits under the state’s work-requirement demonstration, the importance of evaluating such experiments could not be clearer. In Stewart v. Azar, the court concluded that the purpose of Section 1115 demonstrations such as Arkansas’s is to promote Medicaid’s objective of insuring the poor; evaluations of these demonstrations, as required by law, inform policymakers whether this objective is being achieved.Goal:To examine the quality of evaluation designs for demonstrations that test Medicaid eligibility and coverage restrictions.Methods:Comparison of state evaluation designs against issues identified in Medicaid impact research.Key Findings and Conclusions:Evaluation designs for 1115 demonstrations that restrict Medicaid eligibility and coverage either are lacking or contain flaws that limit their policy utility. No federally approved evaluation designs for Medicaid work and community-engagement demonstrations are yet available, and the Centers for Medicare and Medicaid Services has not issued evaluation guidance to states. Evaluations thus lag well behind demonstration implementation, meaning important impact information is being lost. Eligibility restrictions attached to some approved Medicaid expansion demonstrations remain unevaluated. Moreover, evaluations are not sustained long enough to measure critical effects; systematic evaluation of communitywide impact is lacking; and comparisons to states with no Medicaid restrictions are missing. Without robust evaluation, the core purpose of Section 1115 is lost.
Issue:Over the past decade, traditional Medicare’s per-beneficiary spending grew at historically low levels. To understand this phenomenon, it is important to examine trends in postacute care, which experienced exceptionally high spending growth in prior decades.Goal:Describe per-beneficiary spending trends between 2007 and 2015 for postacute care services among traditional Medicare beneficiaries age 65 and older.Methods:Trend analysis of individual-level Medicare administrative data to generate per-beneficiary spending and utilization estimates for postacute care, including skilled nursing facilities, home health, and inpatient rehabilitation facilities.Key Findings and Conclusions:Per-beneficiary postacute care spending increased from $1,248 to $1,424 from 2007 to 2015. This modest increase reflects dramatic changes in annual spending and utilization growth rates, including a reversal from positive to negative spending growth rates for the skilled nursing facility and home health sectors. For example, the average annual spending growth rate for skilled nursing facility services declined from 7.4 percent over the 2008–11 period to –2.8 percent over the 2012–15 period. Among beneficiaries with inpatient use, growth rates for postacute care spending and utilization slowed, but more moderately than observed among all beneficiaries. Reductions in hospital use, as well as reduced payment rates, contributed to declines in postacute spending.
Issue:The Affordable Care Act (ACA) made it easier for older adults and those with medical conditions to enroll in individual-market coverage by eliminating risk rating and limiting age rating. While the ACA also encourages young and healthy people to enroll through subsidies and the individual mandate, it’s not clear whether these incentives have been sufficient to prevent the risk pool from becoming disproportionately old and sick. Goal:To assess whether patterns in individual-market participation changed following ACA implementation. Methods:Comparison of Medical Expenditure Panel Survey (MEPS) data for the periods 2003–09 and 2014–15. Findings and Conclusion:The analysis found few differences in individual-insurance market participation before and after the ACA. Adverse selection occurred during both: people switching into individual insurance coverage after being uninsured were higher utilizers prior to the switch than were those who remained uninsured. Those who disenrolled from individual plans tended to be lower utilizers of care before switching compared with those who kept their coverage. The main difference was that more people--especially young adults--switched from Medicaid to individual insurance, and vice versa, after the ACA. Adverse enrollment or disenrollment in the individual market did not increase following ACA implementation. The combination of easing rating rules and encouraging participation appears to have maintained market stability.
Issue:Immigrant women of reproductive age in the U.S. face significant challenges obtaining comprehensive and affordable health insurance coverage and care--including sexual and reproductive health services--compared with U.S.-born women, because of myriad policy and systemic factors.Goals:Synthesize recent evidence on immigrant women’s access to sexual and reproductive health coverage and care and provide recommendations for policymaking and research.Methods:A rapid literature review to identify and summarize evidence from peer-reviewed and select grey literature published since 2011 on health insurance coverage and sexual and reproductive health care services use among immigrant women in the U.S. Where available, evidence is compared to U.S.-born women.Findings and Conclusions:Immigrant women are less likely to have coverage and use sexual and reproductive health services than U.S.-born women, which may increase their risk of negative outcomes. Federal and state policymakers could take actions to advance immigrant women’s sexual and reproductive health, including expanding eligibility for coverage and shoring up the nation’s health care safety net. Further research is needed to understand the needs, use of services, and outcomes of immigrant women, as well as the factors that contribute to differences between immigrant and U.S.-born women, and among groups of immigrant women.
Issue:In 2017, health insurance marketplaces in some states were thriving, while those in other states were struggling. What explains these differences?Goal:Identify factors that explain differences in issuers’ participation levels in state insurance marketplaces.Methods:Analysis of the Robert Wood Johnson Foundation’s HIX Compare dataset, and the National Association of Insurance Commissioners’ 2010 Supplemental Health Care Exhibit Report.Findings and Conclusions:State policies and insurance regulations were key factors affecting the number of issuers participating in the marketplaces in 2017. Marketplaces run by states had more issuers than states that rely on the federally facilitated marketplace. States with fewer than four issuers tended to have policies in place that could have been destabilizing--for example, permitting the sale of plans not compliant with the Affordable Care Act’s requirements regarding essential health benefits or guaranteed issue. Consumers in states that did not take steps to enforce these insurance market reforms still benefited from their protections, however; they were just enforced at the federal level. States with more issuers were also more likely to have expanded Medicaid. States with fewer issuers tended to be rural and have smaller populations, more concentrated hospital markets, and lower physician-to-population ratios.
Issue:Delivery system reform has been a focus of regulatory and legislative policy to date, but it is unclear how policymakers will integrate reforms into their plans for 2020 and beyond.Goal:To present and evaluate options for integrating delivery system reform into upcoming legislative proposals.Methods:Literature review.Findings and Conclusions:Policymakers should integrate delivery system reform into their 2020 plans to continue driving value in the health care system. Several options exist for promoting delivery system reform either through a state-based block grant approach or federal public plan approach. We identify three main principles that are critical for success of reform efforts: information sharing and infrastructure, flexibility to innovate, and alignment and stability of efforts.
Issue:The Centers for Medicare and Medicaid Services approved Medicaid work requirement demonstration projects in four states, and other states also have applied. However, the future of these projects has been clouded by legal and policy challenges.Goal:To assess whether state Medicaid work requirement projects are designed for success in promoting employment among unemployed Medicaid beneficiaries.Methods:To examine the design of new work requirement projects, we reviewed the evidence, analyzed the overlap of Medicaid and Supplemental Nutrition Assistance Program (SNAP) work requirements, and convened a roundtable of seven experts who have research or implementation experience with work programs for Medicaid and public assistance recipients.Findings and Conclusion:Mandatory work programs would be less effective and efficient than well-administered voluntary programs. Far more people will be subject to Medicaid work requirements than are currently subject to them in SNAP. This surge could overwhelm the limited resources of existing employment training and support programs. Medicaid demonstration projects contribute almost no additional funding to train the unemployed or provide necessary social supports. Medicaid work requirement programs are not well designed to help people get jobs or improve health and are more likely to lead to a loss of health insurance coverage.
If preexisting conditions were excluded from coverage, nearly all people with these conditions would see increased out-of-pocket costs. Average out-of-pocket costs for those with cancer or diabetes would triple, while costs for arthritis, asthma, and hypertension care would rise by 27 percent to 39 percent. Some individuals would see much larger increases: for example, 10 percent of diabetes patients could expect to incur over $9,200 annually in out-of-pocket costs. Many with preexisting conditions also would spend more on conditions that are not excluded, since out-of-pocket spending on their preexisting conditions would no longer count toward the deductible and out-of-pocket maximum.
Issue:There has been relatively little discussion about the small-group employer insurance market since the implementation of reforms under the Affordable Care Act. It is important to understand the condition of this market before the impact of recent regulatory changes from the Trump administration.Goal:To understand how the ACA’s market reforms have affected prices, enrollment, and competition in the small-group market.Methods:Analysis of financial data filed by small-group insurers with the federal government, along with relevant published literature.Findings and Conclusions:Enrollment has declined in the small-group market, although this is largely a continuation of a trend in place prior to the ACA. Substantially more small-business owners and workers now have coverage than prior to the ACA because many have been able to take advantage of subsidized individual plans through the marketplaces. For those who remain in the small-group market, price increases have been similar to those in the large-group market. The ACA has not reduced the cost of small-group insurance, but has made it more accessible and comprehensive without harming the market. It will be important to continue monitoring the small-group market to ensure that recent regulatory changes do not worsen market conditions.
