Testimony of Sabrina Corlette, J.D. earlier than the U.S. Home of Representatives Schooling & Workforce Well being Subcommittee, April 26, 2023
Good morning Chairman Good, Rating Member DeSaulnier. My title is Sabrina Corlette and I’m a Analysis Professor at Georgetown College’s McCourt College of Public Coverage.
It’s an honor for me to be a part of this dialogue of insurance policies to assist scale back well being care prices for working folks and their households.
In recent times Congress has made a number of makes an attempt to enhance well being care entry, affordability, and high quality. None has had a higher impression than the Affected person Safety and Reasonably priced Care Act (ACA).
Right this moment, People with ESI take as a right lots of the protections they get pleasure from beneath the ACA, together with protections for folks with pre-existing situations, protection for younger adults, cost-free preventive companies, and caps on our annual out-of-pocket prices.
Extra not too long ago, the Consolidated Appropriations Act of 2021 (CAA) now protects 177 million customers from surprising medical payments and helps empower employers to be simpler purchasers of well being advantages.
And final 12 months, the Inflation Discount Act (IRA) has helped advance the protection and affordability beneficial properties beneath the ACA and is decreasing prescription drug prices for Medicare enrollees.
Nonetheless, challenges stay. Since 1999, worker contributions to premiums have elevated by about 300%, and the typical deductible for a single employee has risen from $303 in 2006 to $1,562 in 2022.
The first cause for the affordability challenges in ESI is rising well being care costs. On common, business insurers are paying twice the quantity that Medicare pays for a similar service.
There are a variety of causes for this. First, consolidation within the well being care sector is granting suppliers with outsized market energy to demand larger reimbursement charges.
Second, an absence of value transparency has left many employers in the dead of night about what’s driving price progress.
Third, lots of the third-party distributors that employers use to form and administer their well being plans have monetary incentives to maintain well being care prices excessive.
Employers can’t remedy the affordability disaster in well being care alone – they want assist from policymakers.
Sadly, three of the 4 ideas into consideration at present don’t handle the fee drivers in our system. They merely shift the burden of price progress to employers with older, much less wholesome workforces.
First, Affiliation Well being Plans: The first manner AHPs can provide low premium charges is thru the exemption from ACA ranking laws. This allows them to cherry choose wholesome employer teams out of the ACA-regulated market. AHPs simply create new winners and losers, with the losers being those that are older and sicker.
Second, the “Self-insurance Safety Act”: The proposal would additional encourage the proliferation of level-funded plans within the small-group market, posing two major dangers. First, many small employers could also be uncovered to surprising monetary legal responsibility once they self-fund their plan.
Second, if small employers with youthful, more healthy workers shift to level-funded merchandise in vital numbers, it’ll go away employers with older, sicker staff behind. This causes adversarial choice, the place premium charges rise for employers whose teams can’t go the stop-loss issuers’ underwriting.
Simply as with AHPs, this laws does nothing to handle the underlying cause why there may be an affordability disaster for ESI: the costs that business insurers pay for supplier companies and prescribed drugs.
Third, the “Telehealth Profit Growth for Employees Act”:
Let’s be clear: there may be nothing in federal regulation that stops employer group well being plans from protecting telehealth companies. Certainly, 96% of huge companies already achieve this.
Employers are struggling to afford the rising price of medical health insurance – that is indeniable. However encouraging the proliferation of stripped-down telehealth advantages that discourage care coordination, don’t cowl basic items like hospitalization, prescribed drugs, and labs, and wouldn’t have to adjust to shopper protections or psychological well being parity, isn’t the answer.
Lastly, I wish to thank the Subcommittee for making an attempt to roll again a hospital billing apply that’s driving up prices for employers and enrollees alike. The hospital facility proposal earlier than this subcommittee is a step in the correct route.
Thanks in your time, and I welcome your questions.
A webcast of the listening to and Ms. Corlette’s full written testimony can be found right here.