The decision not to vote on the Graham-Cassidy bill feels like the end of the road for a full repeal-and-replace effort. However, more limited changes are still being discussed in Congress and the administration will have significant influence in how ACA regulations are enforced. To help us to represent employers’ views in our meetings with policymakers, we took a quick pulse of employer health plan sponsors to find out what your concerns and preferences are around changes to the ACA. Nearly 300 health benefit professionals responded to our 5-question survey, which was in the field for just 10 days.
Little support for continued repeal and replace efforts, though employers seek smaller fixes
First of all – there seems to be only limited appetite for a full ACA repeal and replace among employers. Just 35% of all respondents say they favor repeal and replace, with 51% opposed and 14% expressing no opinion. Respondents from smaller organizations (fewer than 500 employees) were more likely to favor repeal and replace (59%).
Respondents were asked about a number of other changes, ACA-related and otherwise. A resounding 95% said they would favor simplified ACA employer shared responsibility reporting rules – no surprise there. More than 9 out of 10 respondents (92%) favor permitting higher contributions to health spending accounts, and nearly as many (87%) would like to allow contributions up to the level of the out-of-pocket maximum. The majority (66%) also favors allowing medications and treatments for chronic conditions to be covered in an HSA-eligible plan before the deductible is met; this change would make enrolling in a high-deductible plan an easier choice for employees with chronic conditions. Many respondents are also in favor of allowing free or subsidized services at an onsite clinic before the HSA deductible is met, to remove barriers to using what might be the most cost-efficient, as well as the most convenient, source of primary care (61% of all respondents and 82% of those working for organizations with 20,000 or more employees).
Employers favor new approaches to reducing excise tax risk – without cost-shifting
The excise tax remains on the books for 2020 and remains a worry. Virtually all respondents have already taken action to minimize their exposure to the tax. The most common change was to add a high-deductible health plan (76%); many (49%) also said they have taken steps to encourage higher enrollment in the HSA-eligible plans. About two-fifths of respondents (43%) have increased employee cost-sharing requirements and nearly a fourth (23%) have eliminated a high-cost plan.
Interestingly, when asked about further actions they would take to minimize excise tax risk, the most common response by a wide margin was “step up efforts to control cost without cost-shifting to employees”. That’s the plan for 44% of respondents, while just 31% plan to increase employee cost-sharing, the next most common response. The gap between those two numbers may signal that many employers feel they have given as much financial responsibility to employees as they believe their employees can handle – but also that many new approaches to achieving sustainable cost growth have emerged in recent years that don’t involve shifting cost to employees.
Despite CMS move, employers remain committed to provider payment reforms
One of the most promising new avenues to cost management is value-based care. We asked employers whether they believed that the recent CMS announcement that it will delay or cancel certain mandatory programs aimed at moving Medicare away from traditional fee-for-service payment would affect employer interest in furthering their own value-based care arrangements. Only 22% of respondents believe it will have a dampening effect – the majority (53%) believes it will not slow down employer actions in this arena, and 25% believe employers will actually step up their efforts in promoting provider payment arrangements that reflect the value of services rather than just the volume.
Employers fear a rise in the number of uninsured would drive cost to group plans
The intense debate and coverage of repeal and replace efforts has been an education for many employers as well as the general public. Certain changes to the ACA and government health programs that have been proposed over the past few months could result in more people without insurance or with significant insurance gaps. These include funding cuts to Medicaid, changes in funding support for the public exchange, and 1332 waivers giving states more flexibility in how they comply with ACA requirements. We asked employers whether they were concerned that these changes could result in providers’ shifting cost to employer group plans to help offset an increase in uncompensated or undercompensated care. On a scale of 1-5, with 1 being “very concerned” and 5 being “Not at all concerned,” 75% of respondents rated their level of concern at a 1 or 2. Employers have learned, the hard way, that what happens in one sector of the US healthcare system affects all the rest.
Employers rate their biggest cost drivers
With significant health system reform not likely to be coming out of Washington anytime soon, employers will continue to do what they’ve been doing – addressing the cost drivers in their programs and, in doing so, making the health care system just that much more efficient. We asked what their biggest concerns are right now. At the top of the list: specialty drugs.
- Specialty pharmacy – 86%
- High-cost claims – 74%
- Increase in frequency of specific diseases – 56%
- Waste in the system – 42%
- ACA mandates – 33%
- Over-utilization of services by members – 19%
The order varies somewhat based on employer size, with the largest employers placing “waste in the system” at # 3. Just over three-fifths of respondents from organizations with 20,000 or more employees say waste is one of their biggest cost drivers. I have to say I find that encouraging – because you have to know that the problem is before you can fix it. My colleagues Renya Spak and Tracy Watts have some suggestions on this front – read about them here.