The Fact of the Month
Here’s something to talk about when discussing plan design options and employer contribution strategy with group clients in the New Year.
The direct economic effect of the need for caregiving is nearly $44 billion a year. It comes from the loss of more than 650,000 jobs and almost 800,000 caregivers suffering from absenteeism issues at work. Much of the impact comes from people who spend a significant amount of time per day in their caregiving role, assisting loved ones with the most serious of health conditions. The overall economic impact of caregiving across the direct and indirect channels is $264 billion a year.
The Big Three
Each month GPAHU identifies three top public policy or legal developments that could impact our members and clients. Here are this month’s big three!
Telehealth Waiver About To Expire In Pennsylvania
Pennsylvania is one of only seven states that does not have a law on the books that defines what services are “telemedicine” or “telehealth” and requires insurers to reimburse for telehealth services. Since the COVID-19 pandemic made the importance of telehealth services clear, the Wolf Administration implemented a temporary waiver that explicitly allows licensed health care providers to practice telemedicine for reimbursement. That policy will expire in March of 2022. Unless the Pennsylvania General Assembly enacts and Governor Wolf signs legislation to ensure uniform access to telehealth services, state residents will be left with a patchwork system of care.
Without the current waiver, each insurer or group plan can determine what telehealth services are and if they will cover them. While most insurers in the state do cover telemedicine in some form and are expected to continue covering telehealth services, what services may be covered and how they are covered could change for many this coming March. Further complicating the issue is the burden that the lack of regulation places on medical providers. Due to liability concerns, some providers will not provide telehealth services or limit what services they provide (such as refusing to prescribe medications) or what devices they will use to communicate with patients. In some cases, medical providers will not provide telehealth services at all or will do so on a cash-only basis to avoid determining specific eligibility and coverage standards on a patient-by-patient basis.
Legislation to correct the issue, S.B. 705, sponsored by Senator Elder Vogel (R-Beaver County), passed the state Senate in October and is currently pending in the House Insurance Committee. The PAHU and GPAHU legislative committees are watching its progress. While now, the legislation is free of any amendments, versions of this legislation introduced in previous sessions were bogged down when legislators in the House added politically motivated amendments guaranteed to halt the measure’s progress.
Regardless of the outcome of this measure, GPAHU will keep our membership informed should telemedicine policy in the Commonweal change in March of 2022 or sooner.
Build Back Better Includes Significant Healthcare Provisions
The United States Senate is currently debating the Build Back Better Act (BBBA), which the House of Representatives passed onNovember 19, 2021. Since the Senate is using the budget reconciliation process to consider the bill, and since there is still disagreement in the Senate about some of the provisions, the measure is very likely to change before it could ever become law. Nonetheless, the legislation does include a broad range of health care and health insurance provisions that could affect our members and our clients, should they survive Senate modifications. For reference, here is a summary of the most significant health provisions in the House-passed bill.
The premium tax credits to subsidize exchange-based individual coverage created by the Affordable Care Act (ACA) only helped people with family incomes up to 400% of the federal poverty level. The American Rescue Plan Act (ARPA) eliminated the ACA subsidy eligibility cap, increased the overall amount of the tax credits, and created subsidy benefits for people receiving unemployment assistance, but its changes will expire next year. The BBBA would extend the recent ARPA subsidy changes through 2025. Starting in 2026, people would have the option to have the lump sum benefit included in their income to determine tax credit eligibility.
Affordability Calculation Change
The legislation includes modifying the “affordability” calculation for employer-sponsored health plans. Right now, a person does not qualify for subsidized marketplace coverage if they have an offer of “affordable” employer coverage. The “affordability percentage” is adjusted for inflation each year but calculated off a base percentage rate of 9.5% of household income. (In 2022, the rate will be 9.61%.) The BBBA would reduce the federal affordability threshold to 8.5% for tax years starting in 2022 through 2025. After that, the affordability threshold would be set at 9.5% of household income with no indexing.
Medicare Hearing Benefit
The BBBA would add a comprehensive hearing benefit to Medicare Part B beginning in 2023. Coverage would be subject to the Part B deductible and 20% coinsurance. Benefits would include hearing rehabilitation and treatment services by qualified audiologists and hearing aids once per ear, every five years. Medicare Advantage plans would be required to cover these hearing benefits too.
Allowing Medicare to Negotiate Prescription Drug Prices
The BBBA would allow the federal Medicare program to negotiate prices with drug companies for a small number of high-cost drugs lacking generic or biosimilar competitors covered under Medicare Part B and Part D, as well as all insulin products beginning in 2025. Drug companies that refuse to negotiate will be subject to excise tax penalties.
Beginning in 2023, if a drug manufacturer raises prices for most prescription medications covered by Medicare Part B or D faster than the rate of inflation, then they will be forced to pay the federal government the difference in the form of a rebate to Medicare. The rebate amount would equal the total number of units multiplied by the amount (if any) by which the manufacturer price exceeds the inflation-adjusted payment amount, including all units other than to the federal Medicaid program. So that means drug manufacturers would be penalized for raising prices too fast, not only on Medicare beneficiaries but also on privately insured individuals and cash payers.
Cost Limitations on Insulin
The BBBA would limit individual cost-sharing on insulin products to $35 beginning in 2023. The requirement would apply to Medicare Part D and all private group and individual health plans. Private group or individual plans do not have to cover all insulin products, just one of each dosage form and type, but by 2025, Medicare Part D plans will need to cover all types of insulin products with no more than a $35 cost-sharing requirement.
Changes to Medicare Part D
Medicare Part D currently provides catastrophic coverage for high out-of-pocket drug costs, but there is no limit to beneficiary cost-sharing. The BBBA would add a maximum out-of-pocket limit to Medicare Part D coverage of $2,000 beginning in 2024, and the cap would be indexed each year after that based on the rate of increase in per capita Part D costs. In addition, beginning in 2025, beneficiaries could elect to spread out-of-pocket costs over the year rather than having to make sizeable lump-sum cost-sharing payments.
Eliminating the Subsidy Gap In Non-Expansion States
Twelve states have not expanded their federal Medicaid programs to cover adults up to 100% of the federal poverty level. In those states, a coverage gap exists between the cut-off rate for Medicaid eligibility and eligibility for exchange-based premium tax credits, which start at 100% of the federal poverty level. The BBBA would allow eligible people in non-expansion states to obtain subsidized coverage through the exchanges from 2022 through 2025, including cost-sharing reductions that would limit their costs to 1% of their total expenses, on average.
Children’s Health Insurance (CHIP) Continuous Enrollment
Under current law, states may choose to provide 12-months of continuous CHIP coverage for eligible children. Doing so prevents coverage gaps when someone ages out of coverage, moves out of state, voluntarily withdraws, or does not make premium payments. The BBBA would mandate twelve months of continuous coverage for CHIP recipients.
Paid Family and Medical Leave
The legislation would give people four weeks per year of paid family and medical leave to welcome a new child, recover from a severe illness, or care for a seriously ill family member. Annual earnings up to $15,080 would be replaced at approximately 90% of average weekly earnings, plus about 73% of average weekly earnings for annual wages between $15,080 and $32,248, capping out at 53% of average weekly earnings for annual salaries between $32,248 and $62,000.
Consumer Assistance, Enrollment Assistance, and Outreach
The BBBA would appropriate $100 million in new funding for marketplace outreach and enrollment assistance, particularly for non-Medicaid expansion states. The legislation also would create additional funding for the exchange navigator program, but that will come through exchange user fees.
Preventive Care Changes That Will Affect 2022 Plans
The ACA requires all non-grandfathered private health insurance plans to cover preventive care services without cost-sharing. Each year, the federal government issues new preventive care services recommendations. If a recommendation is considered emergent, plans need to change their coverage immediately (such as coverage of the COVID-19 vaccines). Otherwise, individual and group plans need to begin covering the new recommended services in the next plan year that begins on or after one year from the date of the recommendation.
Given that many group plans and almost all individual plans are about to start a new coverage year, brokers should check and ensure that coverage terms include all the latest recommendations. Verifying preventive care benefit changes with all carriers and third-party administrators is a best practice to ensure that clients do not encounter any claims issues in the year ahead. Plan documents and employee communications need to be up-to-date too.
The best place online to check on preventive care requirements is the Kaiser Family Foundation, which maintains a preventive care service tracking site. However, there were a few critical recommendation changes during 2021 that will have a big impact beginning with the 2022 plan year:
Lung Cancer Screening – Applies to Plan Years Beginning After March 2021
The lung cancer screening recommendation now applies to people aged 50 to 80 years old who currently smoke at least 20 packs a year or have a 20-pack a year smoking history and have quit within the last 15 years. These individuals qualify for annual screening for lung cancer with low-dose computed tomography. The screening recommendation stops once a person has not smoked for 15 years or develops a health problem that substantially limits life expectancy or the ability or willingness to have curative lung surgery.
Colorectal Cancer Screening – Applies to Plan Years Beginning After May 2021
The suggested age for starting colorectal screening has dropped to 45 years old, and the recommendation that all adults continue screening through age 70 remains in place.
Expanded Access to Preexposure Prophylaxis (PrEP) to Prevent The Transmission of Human Immunodeficiency Virus (HIV) Infection – Applies to Plan Years Beginning After September 2021
New guidance about the coverage of PrEP to prevent the spread of HIV makes it clear that first-dollar coverage applies to the following ancillary and support services that are needed for an effective PrEP regimen:
- Testing for HIV, Hepatitis B and C, creatinine, and pregnancy
- Sexually transmitted infection screening and counseling
- Adherence counseling
- Associated office visits
Check This Out!
If you want to expand your health policy knowledge beyond this newsletter, here is a resource to check out!
This tool from the Kaiser Family Foundation allows you to build custom reports compiling hundreds of health-related indicators and other data for a single state or multiple states.