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Happy 15th Birthday!

April 17, 2013 By

Birthday Cake for 2013 Iowa Employer Benefits Study

Our annual Iowa Employer Benefits Study© is about to take place. I’m really looking forward to this year’s survey for these important reasons:

  • This will be the 15th Study conducted since we started this particular survey in 1999. Some ‘birthdates’ are celebrated with more meaning than others…and 15 is a significant amount of time to show trending patterns and establish a credible track record!
  • Three new modules of questions will be added in this year’s Study.

1. The first module will gauge whether employers will keep their health plans (this would apply to those employers with 50+ employees). In addition, we will determine how prepared employers are regarding health reform requirements. This module is extremely relevant because employers will be making decisions for 2014, the first year most health reform provisions will take effect.

2.  The second new module will be added that will determine how Iowa employers view their local community health care providers – specifically hospitals and physicians. Modules two and three will begin to address the upstream portion of ‘Our Health Care River.’ Our newly established company, Heartland Health Research Institute, will then begin to tackle the implications of the results from these two modules.

In this module, employers will grade hospitals and physicians on 11 key issues, including: transparency of costs, outcomes, coordination of care, concern for patient satisfaction, ability to engage patients, and so on. In addition, employers will be asked to measure their TRUST of these providers. Measuring trust is extremely important for a number of reasons. David Shore, Founding Director of the Trust Initiative at Harvard School of Public Health, once said that ‘trust is the currency of commerce.’

To learn more about the trust issue in health care, please see my earlier blogs:

The Currency of Commerce (Part 1)
Trust – A Distinguished Healthcare Trait (Part 2)
Trust – Now is a Good Time (Part 3)

3.  The third module will address the type of data needed by employers to manage employee health costs. It will help identify who should have the responsibility to supply the primary source of this data to employers and their employees (i.e. health insurers, government or health providers – such as hospitals or physicians.) In addition, we will learn how knowledgeable employers are regarding the Iowa-based web resources currently available on our Iowa hospitals.

Rest assured, we will continue to ask our core questions about the benefit components being offered by Iowa employers. After all, this is the initial reason we began this groundbreaking Study 15 years ago. One thing I have learned over the years of conducting this Study is the importance of constantly monitoring the marketplace — asking fresh questions and addressing new and potential trends.

If your organization is randomly selected to participate in this year’s Study, we highly encourage you to share in our celebration by participating in the survey. Here’s to adding the 15th candle to our cake!

To learn more, we invite you to subscribe to our blog.

Filed Under: David P. Lind, HHRI Tagged With: , , , ,

Health Care Snow Globe Continues…

September 12, 2012 By

David P. Lind BenchmarkIn May, 2010, I posted a blog on the website of Jensen Consulting making an analogy between a snow globe and the newly-created Affordable Care Act (ACA).  Recently at lunch, almost two and one half years following the passage of this mammoth law, I was asked by a colleague what insight I had on the ACA. I responded by using the snow globe analogy…which continues to be very relevant in 2012 and beyond.

Below is the blog written over 30 months ago.

Imagine, if you will, living in a snow globe for many years. I know, this lifestyle sounds very limiting (if not downright corny!). Such an existence would most likely result in familiarity with your surroundings, including most events and activities, possibly generating some boredom. A snow globe life also allows for a more consistent and a relatively predictable world for all others who live with you in this globe.

Then, without much notice and beyond your control, the snow globe is picked up by an external, ‘omnipotent force’ who proceeds to shake the living daylights out of the globe, rocking your world to its core. After numerous violent shakes, the snow globe is set back down on the table … upside down! You find yourself in a mountain of snow, feverishly digging out of the suffocating mess to view the new arbitrarily created terrain. Your environment now looks frighteningly foreign. In fact, it remains a blizzard for the unforeseeable future, most likely for years to come.

The above analogy fits appropriately for all employers, insurance companies, health care professionals, benefit consultants and countless other individuals and entities who are (or will be) affected by the recently passed health care reform law. Also known as The Patient Protection and Affordable Care Act (PPACA), the provisions within PPACA are massive in scope and will require extensive clarification and regulation by the various governmental agencies, including state agencies. Some provisions, such as the Small Business Federal Health Care Tax Credit and the Early Retiree Reinsurance Program will take place in 2010. The extension of coverage to employees’ adult children up to age 26 and the elimination of lifetime dollar limits on medical insurance plans will take effect for plan years beginning on or after September 23, 2010. Many other provisions will apply in 2011, 2012 and in 2013 … too many to list in this particular blog.

But the year 2014, will most closely resemble the ‘upside down’ analogy of the snow globe. New rules will require insurers to accept every individual or employer who applies for coverage, which is not a bad thing, but there will be additional associated costs with this. The new law establishes state-run health exchanges, which will act like purchasing cooperatives for individuals and small businesses with up to 50 employees. An individual mandate will go into effect, which means that anyone caught without health insurance faces only a $95 penalty, but this fine will get bigger every year, maxing out at the greater of $695 or 2.5 percent of a person’s taxable income in 2019. Employers with 50 or more employees that elect not to provide health insurance coverage will face a $2,000 fine per employee if an employee receives subsidized coverage from the federal government. The employer penalty may look attractive, especially when the average annual premium in Iowa, based on our 2009 Iowa Employer Benefits Study©, is $4,440 for single coverage and $11,556 for employees who have family coverage. In other words, why would larger employers offer health coverage if paying the penalty is a cheaper option? The specifics of the above provisions are extremely complicated and convoluted, if not problematic to administer. Since the government would subsidize much of the health insurance cost for low-income workers available through the exchanges, the incentives for retaining an employer plan could very well erode altogether. (2011 Study data is found here).

With all legislation, there are both intended and unintended consequences.  But with this colossal law, a clear understanding of the intended and unintended consequences will not come for many years. Reform will certainly include more of the currently uninsured within the insured ranks, but we really don’t know at what additional cost. In my opinion, this legislation has not addressed the fundamental issues of rising health care costs, which means that health insurance costs will continue to increase at unabated rates. The snow will continue to fall for quite some time, requiring all of us to keep our shovels close by.

After reading this blog now, I realize that the snow continues to fall while we look to replace the shovel with a snow blower.

Hmm, it appears we all live in a perpetual health care snow globe.

Filed Under: David P. Lind Tagged With: , , ,

Medicaid Crunch

August 22, 2012 By

David P. Lind BenchmarkUnder the Affordable Care Act (ACA), Iowa (and all other states) will be making key decisions on whether to expand Medicaid to those who fall within the 100 percent to 133 percent of the federal poverty level (FPL). Currently, Iowa covers about 104,000 Iowans (aged 18-64) under the Medicaid program who qualify up to 100 percent of FPL.

Prior to the Supreme Court decision in June, each state would need to expand Medicaid from 100 percent FPL to 133 FPL, with the federal government paying the entire cost of this expansion from 2014 through 2016 (federal funding will then eventually drop to 90%). The assumption made in the law was that those who were included in the Medicaid expansion would not receive federal tax credits for health insurance because they would be eligible for Medicaid. Only those who fall between 133 – 400 FPL would receive some form of federal subsidy to help pay for health insurance coverage if purchased through a qualified state-based exchange.

However, after the Supreme Court decision, each state can now decide whether to expand Medicaid coverage to those who qualify up to 133 percent FPL. Should Iowa elect to not expand Medicaid coverage, there could be approximately 134,000 residents who are caught between the 100 and 133 percent FPL – who would not be eligible for Medicaid coverage, but presumably receive federal subidies to purchase health insurance through an approved state-based exchange. These numbers are very fluid, by the way, requiring additional analysis:

 David P. Lind Benchmark

By not expanding Medicaid, Iowa health care providers could have more uncompensated care than anticipated, resulting in cost-shifting to those who have private coverage (employer provided plans).  The Supreme Court ruling has caused a hiccup for those residents who fall within the 100 – 133 percent FPL – especially if Iowa elects to not expand Medicaid coverage. This hiccup may affect employers too. Here’s how:

Under the health care law, employers with over 50 employees would pay a $3,000 penalty for flunking the 9.5% affordability test – but only if affected employees are eligible for federal premium subsidies to buy health coverage in a state-based health exchange. The health law indicates if the employee is eligible for Medicaid, the employee is not eligible to receive the federal subsidy to buy health coverage through the exchange. The employer in this case would not be liable to pay the $3,000 penalty. However, should the state not expand Medicaid, the employer would need to make sure the employee in the 100 – 133 percent FPL does not pay a premium above 9.5% of their income to qualify for a subsidy. Somewhat confusing, but this is a potential unintended consequence of the state refusing to expand Medicaid eligibility.

Even though we now have the ACA, two age old questions remain:  1) Who pays?, and 2) How much?

 

Filed Under: David P. Lind Tagged With: , , ,