Navigating the
Those costs are a source of stress for employers, not only because it impacts their bottom line but because it can have a profound effect on their employees as well.
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In an effort to combat the confusion that can surround these prices, the government implemented new rules designed to provide people with greater clarity about their healthcare costs and coverage. On the first of this year the government required that hospitals publish a yearly list of their standing charges for the services they provide. New parts of these federal rules relating to transparency and accountability are set to take effect on January 1, 2022. The new rules will require insurance providers to clearly list plan-specific deductibles and out-of-pocket maximums on insurance cards so members can shop around for the best, least expensive option before receiving care.
“This is probably the most significant change to health policies since the Affordable Care Act,” says David Vivero, CEO of Amino, a healthcare guidance platform. “The rules aim to create more transparency and accountability in healthcare.”
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In a recent interview with Employee Benefit News Vivero shared his thoughts on the new transparency policies, the factors driving the rising cost of healthcare and what steps employers can take to establish a clear plan to prepare for these changes.
What drives the continuous rise in healthcare costs?
One cause is that people are making wasteful decisions because they don't know better. They are responding to the marketing of the local large health system which means that they have more negotiating power to say, “If we're going to continue to stay in-network, our rates need to move in this direction.” These Goliaths are working out how to negotiate with each other, which leaves a lot of people without their primary care doctor. So the stakes are very high, and that means that the folks who hold the cards are in a privileged position and it's created this natural move toward rising prices because of changes in market power.
How will the new transparency rules attempt to reduce the impact of that power?
The requirements are that those folks who have negotiated contracts with insurance plans and networks, with providers and health systems, have to disclose the rates that are being paid, which has been previously held away from all of us. They're having to do that digitally and also provide what the regulations called “shoppable tools” [non-urgent healthcare services people can schedule in advance]. There are a number of other areas where transparency is being required: they are defining the number of services, and it is going to make it so that people can have access to advanced explanations of benefits that give people a sense, ahead of their care, of what their financial responsibilities are going to be.
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The enforcement of it is pretty significant. This is going to be a rule that holds health plan sponsors and employers — anyone who's paying for healthcare — responsible. Those HR leaders and benefit sponsors are on the hook if those members are not getting access to those tools.
How will employees benefit from these rules?
The health plans and plan sponsors are now on the hook to deal with surprise out-of-network billing. Finally members are insulated from making a bit of a mistake despite their best efforts. So if you end up with a surprise out-of-network-bill, it is going to be up to the health plan to work out how to resolve that — the member is insulated from it. This provides a much better set of incentives for plans and health plan sponsors to grapple with this issue, instead of passing it along to people who can't bear it anymore in the consumer community.
What actionable steps can employers take to help reduce the burden of healthcare costs on employees?
Employers are investing in virtual care, they're investing in on site clinics and they're investing in services that allow the plan to have a little bit more insight into the incentives that that primary care doctor might have.
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Investing in guidance is a huge part of it. As a member, I don't get sick on the same day I get my benefits brochure. I will get sick at some point within the next year. So investing in solutions that conveniently guide the member, where and when they need it to the right program that the employer has sponsored is hugely important.
