Reform by Any Other Name
Healthcare Reform Panel
Prescription for Change
Not a Bitter Pill
Cut Out the Middle Man
The Secretary herself was not really delighted with that, but as we got into the exchange folks, they opened some doors, we got some concessions and we now have a written agreement that they will honor—they will accept and approve our exchange. We had a conceptual agreement and now we have had a closure on the details of that agreement.
Finally, the big deal is Medicaid. Medicaid is the federal and state partnership shared model for providing medical insurance to those in poverty. Utah has never covered everyone under a certain income level because you’re allowed to pick and choose. So we have under a certain poverty level, pregnant women, children and, to some degree, their families who have children, the disabled. And now under the mandate, our Medicaid must be expanded whether we elect or not.
Because we have only insured slivers, or silos, of the eligible population, and because now people will either go to an exchange or they will somehow have to show that they have health insurance, that will drive many people to Medicaid who have been qualified but who haven’t been aware that they were within a certain poverty range. So that will make a big difference. The cost of what we call “the woodwork effect” will be significant.
The other issue is if we don’t go forward with Medicaid, then we have what’s called the donut hole here, and we haven’t determined what to do with that.
Bottom line, we are committed in Utah to have a compassionate attitude towards those who are unfortunate, who deserve our compassionate care, and whether or not we expand as the federal government would envision Medicaid, we will somehow address those needs.
MODERATOR: Patty Conner is the head of Avenue H here for the state of Utah. If you are interested in being on the exchange, what would that entail? How would you get on it?
CONNER: Avenue H has been open since 2010 and running a defined contribution model where we have small employers, we give them the option to get group insurance and set their contribution amount. Rather than it being 50 percent of the cost of the premium, they can determine what is appropriate for their budget. So if they can only afford $100 per employee per month, or they can afford $1,000 per employee per month, they make that decision.
Once they set what the contribution amount is, employees can then come in and pick between 140 different healthcare plans across three different networks and multiple providers throughout the state. That lets the employee choose a plan that best meets their needs and their budgets.
Employer contributions have, on average, been about $434 per employee per month. And we are seeing employees choose plans differently than what their employer would have chosen on their behalf. As an employer, when you are picking a plan, you are having to make sure you meet the needs of all the employees, and that’s difficult to do. You are always going to have some employees want richer benefits. Others say, “I don’t want to have to pay that much. I’m healthy. Why do I need to have that rich of a benefit plan?” But you are stuck with that because you have just one choice that you can make. And you are also forced with the fact of having to pick a particular network that will satisfy everybody’s needs.
On Avenue H, you take a totally different approach. Once the employer makes a decision of what their contribution is, then we let the employees come in and shop. They are probably going to need some assistance from a broker to help them sort through all of the plans. There are plan comparison tools on the site that let them filter what’s most important to them, whether it’s their doctor, their hospital, a co-pay or a deductible or a particular benefit—they can go in and do side-by-side plan comparisons and narrow down their searches.
Once the employee makes the decision, they have more accountability for how they access their care, how they use their benefits. And in the long run—and we all recognize this is something that is not going to change overnight—we start to change employee behavior and how people access their care and take care of themselves. We eventually want to see that coupled with HSAs and allow the employees to start using the dollars that are in their accounts more effectively and saving for the opportunities where they might need those for catastrophic situations in the future.
Today we service employee groups between two to 50. We will be switching over how our system functions and what plans and what rates will be available. But if anyone is interested in joining today, you simply come to our website, and either contact your broker, or if you don’t have one we have a broker search on our site. And then you just go through the application process, which will get you a set of rates that you can then take the next step and set defined contributions and do shopping.