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Congress, Administration Serious About Tackling Health Care Costs

As more people struggle with their medical bills, Congress has been introducing a raft of new legislation aimed at cutting costs and making pricing more transparent.

The multi-pronged, bipartisan effort targets the lack of transparency in pricing particularly for pharmaceuticals, as well as surprise medical bills that have left many Americans reeling, and there are also other efforts aimed at reducing the cost burden on payers: the general public and employers.

And since consumers are affected regardless of their political affiliation, congresspersons are reaching across the aisle to push through legislation to address this crushing problem.

There are several draft proposals, but word is a number of bills are expected to be introduced soon.

Surprise medical bills

One of the top priorities seems to be surprise medical bills, which are in the administration’s crosshairs. President Trump in January 2019 hosted a roundtable to air the problems people face when hit with what are often financially devastating surprise bills after they venture out of their network for medical services for both emergency and scheduled medical visits.

After the roundtable, he directed a bipartisan group of lawmakers to create legislation that would provide relief. The House Energy and Commerce Committee in May responded by introducing draft legislation that aims to ban surprise medical bills.

Also, Sen. Maggie Hassan (D-N.H.) and Sen. Bill Cassidy (R-La.) have said they hope to introduce legislation to end the practice of surprise bills. With the White House and both sides of the aisle talking the talk, observers say that there are a number of ways legislation could tackle these surprise bills. That could include:

  • Setting caps on how much hospitals and service providers can charge, or
  • Requiring hospitals and service providers to turn to the insurance company (and not the patient) when they are seeking additional reimbursement.
  • Requiring the insurer to share more of the cost burden for the out-of-network services.

At this point legislation is still being formulated, but chances are good that we could see a bipartisan push to fix this problem. The biggest issue will be how to calculate what are “reasonable” costs for out-of-network services.

Pharmaceutical costs, transparency

The Trump administration has also made it a priority to reduce the costs of medications and tackle pricing transparency in the system.

While both Republicans and Democrats have decried the skyrocketing costs of prescription medications, the inflation for which is outpacing all other forms of medical care, so far there has been only one piece of legislation introduced tackling transparency.

Unfortunately, it’s part of a larger bill that aims to preserve the Affordable Care Act and reverse some recent policy decisions by the Trump administration, so the chances of that measure going anywhere in the Senate are slim to none.

The good news is that members from both parties have been talking about cooperating on legislation, and political observers say the chances are good some type of measure will be introduced this summer.

Other costs

Sen. Ron Wyden (D-Ore.) in February introduced legislation that would require insurers to tell people what they would have to pay out of pocket for any in-network treatment or prescription drug.

On top of that, the Senate Health Committee will soon introduce a number of bills aimed at reducing frictional costs in the system.

In addition, the Senate Finance and Judiciary committees are both in the process of formulating measures aimed at reducing health care costs, as well as prescription drug prices.


Five Ways Employers Can Save on Health Care Costs

In recent years, many companies have been dealing with rising health care costs largely by transferring more of the expense and risk on to their employees.

But some employers have found smarter, more creative ways to limit health costs without further burdening valued employees. Here are some of the best solutions:

  1. Pharmacy benefit managers. Pharmacy benefit managers are independent third party administrators who work with pharmacists, employers and workers to reduce costs and inefficiencies. For example, they may help workers migrate from expensive brand name drugs to equally effective generics for a fraction of the cost.
    Or they may be able to migrate workers from bricks-and-mortar pharmacies to mail order. They also assist employers with contract negotiations.
  2. Telemedicine. Some companies are contracting with doctors to provide health services online, via a video feed. It’s no substitute for an in-person examination, but workers can get consultations and routine assessments done and get a prescription for a fraction of the cost of an in-person visit. Furthermore, the worker doesn’t have to take time off work for an appointment. It can be done from the office.  A typical insurance billing for a basic medical appointment can run as high as $150. But a telemedicine visit can cost about a third of that amount, according to reporting from U.S. News.
  3. Wellness programs. Healthy employees cost much less than sick ones over time. Smokers and the obese generate much more frequent and higher medical claims than normal-weight employees.
    Employers are fighting back by offering access to smoking cessation and weight loss programs, as well as additional programs for the management of common conditions such as high blood pressure, diabetes and asthma. About 58% of health plans nationwide offer an incentive for participating in a wellness program, according to research from CEB, the best-practice insight and technology company.
  4. Consumer-directed health plans. Employers are also giving employees greater control over their spending decisions. They are doing this via high-deductible health plans, which come with access to health savings accounts. These allow either an employee or an employer to contribute pre-tax dollars to an HSA. Withdrawals from an HSA to pay for qualified health care expenses are tax-free.
    These plans are less expensive for employers than comparable traditional insurance plans, and can work very well for employees in good health. Some employers choose to contribute to HSAs on their workers’ behalf.
  5. Transparency tools. Cost-transparency tools make the cost of every medical procedure or service visible to employers and patients alike.

 

A claims analysis from UnitedHealthCare found that those who used the company’s transparency tools spent an average of 36% less on health services. When consumers used price-transparency tools, CEB researchers found an average saving of $173 for employees and $409 for employers per procedure.


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