System "Upgrades"

I recently upgraded the operating system on my iPhone. Not that that would normally be a big deal—I generally try to keep such things current, despite the occasional “bumps” that inevitably come with software upgrades. But this time the upgrade wasn’t just about improving performance and fixing issues that had been identified since the last update.  No, this one not only LOOKED different, some core functions were said to work differently—and “different” in this case appeared to be a problem for a number of users.

So, before I took the “plunge,” I spent some time trying to do some research—trying to find out what kinds of improvements I could anticipate, and to better understand the complaints associated with an upgrade from which there was, apparently, no “return.” The upgrades were readily quantified (on the vendor’s website most notably), although I think it’s fair to say they had a motivation in promoting the new system. However, most seemed to be relatively unimportant in terms of how I used, or planned to use, my device. As for the problems: Well, they were equally easy to find, but harder to quantify. And, like those product ratings on any website, were from people I did not know and whose judgments I had no particular reason to trust.

Consequently, stuck between conflicting perspectives, and seeing no particular advantage in making a change, I did what most human beings do. Nothing. Until, with my current contract expiring, I realized that the upgrade was likely to be imposed on me at that point, regardless of my preferences.

On October 1, the public marketplaces (formerly known as connectors or exchanges) associated with the implementation of the Patient Protection and Affordable Care Act (PPACA) will begin to come online—in various phases and, from what one can discern from published reports and official updates, in various states of readiness. The advantages have been outlined, as have the potential pitfalls. Doubtless the experiences will be as varied as the experience(s) and expectation(s) of the individuals involved.

However, it’s hardly a new idea. Back in 1980 the conservative Heritage Foundation began advocating that the Federal Employee Health Benefit Program (FEHBP—a marketplace for multiple insurers and scores of plan options) become a model for expansion of health coverage through an individual mandate. Today, simply telling those in Washington, DC, that “the marketplaces are just a version of FEHBP” brings an immediate understanding of the concept.

A year ago, EBRI published an Issue Brief that outlined the issues related to private health insurance exchanges, possible structures of an exchange, funding, as well as the pros, cons, and uncertainties to employers of adopting them. That report contained a summary of recent surveys on employer attitudes, as well as some changes that employers have made to other benefits that might serve as historical precedents for a move to some type of defined contribution health benefits approach. It is a report that provides both current analysis alongside a historical perspective—a resource for those looking to better understand and plan for the potential changes ahead.¹

That said, when Paul Fronstin, EBRI’s director of Health Research and the EBRI Center for Research on Health Benefits Innovation, updates the information in the future, he may well call them marketplaces, unless the name “upgrades” again in the weeks ahead!

Nevin E. Adams, JD

¹ See “Private Health Insurance Exchanges and Defined Contribution Health Plans: Is It Déjà Vu All Over Again?” online here.

You can find a catalogue of recent EBRI research on PPACA and its potential impact on employment-based health benefits online here.

Future Tense?

Americans have long had a beef of sorts with the U.S. health care system.

Asked to rate that system, a majority of workers describe it as poor (21 percent) or fair (34 percent), and while nearly a third consider it good, and less than half that many rate it as very good (12 percent) or excellent (2 percent), according to the 2013 Health and Voluntary Workplace Benefits Survey (WBS). Perhaps more significantly, the percentage of workers rating the health care system as poor doubled between 1998 and 2006, according to the 1998–2012 Health Confidence Survey (HCS).

On the other hand, workers’ ratings of their own health plans continue to be generally favorable. In fact, one-half (51 percent) of those with health insurance coverage are not just content with the coverage they have, they are extremely or very satisfied with it.

Satisfaction with health care quality continues to remain fairly high, with 50 percent of workers saying they are extremely or very satisfied with the quality of the medical care they have received in the past two years.

In fact, dissatisfaction with the health care system appears to be focused primarily on cost: Just 13 percent are extremely or very satisfied with the cost of their health insurance plans, and only 11 percent are satisfied with the costs of health care services not covered by insurance.

And, despite the ongoing (and frequently dramatic) news coverage of changes (current and contemplated) resulting from the Patient Protection and Affordable Care Act (PPACA), workers continue to be generally confident that their employers or unions will continue to offer health insurance. In 2013, 28 percent of workers report that they are extremely confident their employers or unions will continue to offer coverage, 37 percent are very confident, and 28 percent are somewhat confident.

On the other hand, confidence about the health care system decreases as workers look to the future. While 46 percent of workers indicate they are extremely or very confident about their ability to get the treatments they need today, just 28 percent are confident about their ability to get needed treatments during the next 10 years; and while 39 percent are confident they have enough choices about who provides their medical care today, fewer than-  1 in 4 are confident about this aspect of the health care system over the next 10 years.

Finally, 25 percent of workers say they are confident they are able to afford health care without financial hardship today, but this percentage decreases to 18 percent when they look out over the next decade.

Ultimately, the findings of the 2013 Health and Voluntary Workplace Benefits Survey provide not only valuable insights into how Americans view and value their health care now, but also a sense that the current comfort and confidence levels could be relatively short-lived.

- Nevin E. Adams, JD

“The 2013 Health and Voluntary Workplace Benefits Survey: Nearly 90% of Workers Satisfied With Their Own Health Plan, But 55% Give Low Ratings to Health Care System” is available online here.

2012: Research Year in Review

As we close out 2012, and embark upon a new set of challenges in 2013, this week’s EBRIef offers a roundup of our 2012 research. Best wishes for a Happy and Prosperous New Year!

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Share EBRIef with your friends and colleagues – and let them know they can sign up for their own copy HERE

What’s New(s) – Health & Workforce

“Findings from the 2012 EBRI/MGA Consumer Engagement in Health Care Survey” MORE.

"Views on Employment-Based Health Benefits: Findings from the 2012 Health Confidence Survey" MORE.

“Self-Insured Health Plans: State Variation and Recent Trends by Firm Size” MORE.

'Savings Needed for Health Expenses for People Eligible for Medicare: Some Rare Good News,' and 'IRA Asset Allocation, 2010' MORE.

Employment-Based Retiree Health Benefits: Trends in Access and Coverage, 1997-2010” MORE.

“Sources of Health Insurance and Characteristics of the Uninsured: Analysis of the March 2012 Current Population Survey” MORE.

"2012 Health Confidence Survey: Americans Remain Confident About Health Care, Concerned About Costs, Following Supreme Court Decision" MORE.

"Satisfaction With Health Coverage and Care: Findings from the 2011 EBRI/MGA Consumer Engagement in Health Care Survey" MORE.

“Private Health Insurance Exchanges and Defined Contribution Health Plans: Is It Déjà Vu All Over Again?” MORE.

'Health Plan Choice: Findings from the 2011 EBRI/MGA Consumer Engagement in Health Care Survey' MORE.

'Use of Health Care Services and Access Issues by Type of Health Plan: Findings from the EBRI/MGA Consumer Engagement in Health Care Survey' MORE.

"Trends in Employment-Based Coverage Among Workers, and Access to Coverage Among Uninsured Workers, 1995-2011" MORE.

'Characteristics of the Population With Consumer-Driven and High-Deductible Health Plans, 2005–2011' MORE.

“Employment-Based Health Benefits: Trends in Access and Coverage, 1997-2010” MORE.

‘Trends in Health Coverage for Part-Time Workers’ MORE.

'Employer and Worker Contributions to Health Savings Accounts and Health Reimbursement Arrangements, 2006–2011' MORE.

“Health Savings Accounts and Health Reimbursement Arrangements: Assets, Account Balances, and Rollovers, 2006–2011” MORE.

'The Impact of PPACA on Employment-Based Health Coverage of Adult Children to Age 26' MORE.

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What’s New(s) – Retirement

“401(k) Plan Asset Allocation, Account Balances, and Loan Activity in 2011” MORE.

"Employee Tenure Trends, 1983–2012" MORE.

“All or Nothing? An Expanded Perspective on Retirement Readiness” MORE.

“Employment-Based Retirement Plan Participation: Geographic Differences and Trends, 2011” MORE.

'IRA Asset Allocation, 2010' MORE.

“Individual Account Retirement Plans: An Analysis of the 2010 Survey of Consumer Finances” MORE.

"Increasing Default Deferral Rates in Automatic Enrollment 401(k) Plans: The Impact on Retirement Savings Success in Plans With Automatic Escalation" MORE.

"Is Working to Age 70 Really the Answer for Retirement Income Adequacy?" MORE.

““After” Math: The Impact and Influence of Incentives on Benefit Policy” MORE.

'Own-to-Rent Transitions and Changes in Housing Equity for Older Americans' MORE.

'Retirement Readiness Ratings and Retirement Savings Shortfalls for Gen Xers: The Impact of Eligibility for Participation in a 401(k) Plan' MORE.

“Effects of Nursing Home Stays on Household Portfolios” MORE.

“Individual Retirement Account Balances, Contributions, and Rollovers, 2010: The EBRI IRA Database^TM” MORE.

"Retirement Income Adequacy for Boomers and Gen Xers: Evidence from the 2012 EBRI Retirement Security Projection Model®" MORE.

'Time Trends in Poverty for Older Americans Between 2001–2009' MORE.

‘Modifying the Federal Tax Treatment of 401(k) Plan Contributions: Projected Impact on Participant Account Balances’ MORE.

“The 2012 Retirement Confidence Survey: Job Insecurity, Debt Weigh on Retirement Confidence, Savings” MORE.

'Labor-force Participation Rates of the Population Age 55 and Older, 2011: After the Economic Downturn' MORE.

“Expenditure Patterns of Older Americans, 2001-2009” MORE.

'Spending Adjustments Made By Older Americans to Save Money' MORE.

“Next” Step

On December 13, EBRI will hold its 71st biannual policy forum, “’Post’ Script: What’s Next for Employment-Based Health Benefits?” It is a question that has been on the mind of employers, lawmakers and policymakers alike for some time now. It predates the time that the structure for the Patient Protection and Affordable Care Act (PPACA) was put in place, has evolved, but not been resolved, as regulations were, and continue to be issued subsequent to its passage. It has remained on the minds of employers, providers, and policymakers following the various courts’ assessment of the various challenges to the constitutionality of the law, and even as the nation went to the polls last month.

Today we know more than we once did about certain aspects of the law, its provisions and applications.¹And yet there is much yet to know about its broader implementation: How the insurance exchanges might work,² for example, or how their presence might affect or influence cost, access, or employer plan designs. Will employers step away from their traditional role in providing these benefits, or will these changes lead to an environment in which employers find them to be of even greater value to their retention programs and strategies? In addition, an overarching concern at present—not just for health benefits, but workplace benefits overall—is the potential impact that changes in tax policy³ could have on these programs, both direct and indirect.

Our next policy forum will bring together a wide range of national experts on U.S. healthcare policy to share a post-election perspective on fiscal impacts from the federal budget, findings from the EBRI Center for Research on Health Benefits Innovation, and a sense of how employment-based health benefits might evolve as a result of the changes set to come.

In a field as complex and sensitive as healthcare policy, we may not always know “what’s next”—but it’s our hope that the information, and interaction, at the EBRI policy forum will provide insights and clarity that can help.

EBRI’s 71st biannual Policy Forum will be held on Thursday, Dec. 13, from 9:00 a.m.–12:30 p.m. at the Henry J. Kaiser Family Foundation, 1330 G Street NW, Washington, DC 20005. The agenda and registration information are available online here. For those not able to attend in person, a free live webcast of the policy forum will be provided by the International Foundation of Employee Benefit Plans, online here.

Nevin E. Adams, JD

¹ A summary of EBRI Research on PPACA and its Potential Impact on Private-Sector Health Benefits is available online here. Of specific topical interest are:

• “Employment-Based Health Benefits: Trends in Access and Coverage, 1997–2010.”
• “Sources of Health Insurance and Characteristics of the Uninsured: Analysis of the March 2012 Current Population Survey.”
• “Employment-Based Retiree Health Benefits: Trends in Access and Coverage, 1997-2010.”
• “Health Savings Accounts and Health Reimbursement Arrangements: Assets, Account Balances, and Rollovers, 2006–2011.”

² For insights on the topic of health insurance exchanges, see “Private Health Insurance Exchanges and Defined Contribution Health Plans: Is It Déjà Vu All Over Again?” online here.

³ See “Employment-Based Health Benefits and Taxation: Implications of Efforts to Reduce the Deficit and National Debt,” online here.

“Wishful” Thinking?

Last week the Wall Street Journal reported that Sears and Darden Restaurants were planning a “radical change in the way they provide health benefits to their workers,” giving employees a fixed sum of money and allowing them to choose their medical coverage and insurer from an online marketplace, or exchange1. “It’s a fundamental change,” EBRI’s director of health research, Paul Fronstin, noted in the WSJ article.

Indeed, this is the time of year when many American workers – and, by extension, most Americans – will find out the particulars of their health insurance coverage for the following year. For most, the changes are likely to be modest. And, based on the 2012 Health Confidence Survey (HCS), not only do most Americans seem to be confident in those future prospects, they would seem to be satisfied with that outcome.

More than half of those with health insurance are extremely or very satisfied with their current plans, and a third are somewhat satisfied. Nearly three-quarters say they are satisfied with the health benefits they receive now, compared with just 56 percent in 2004.

Dissatisfaction, such as there is to be found, appears to be focused primarily on cost; just 22 percent are extremely or very satisfied with the cost of their health insurance plans, and even fewer are satisfied with the costs of health care services not covered by insurance. Perhaps not surprisingly, about one-half (52 percent) of Americans with health insurance coverage report having experienced an increase in health care costs3 in the past year, though that was the lowest rate since this question was added to the survey in 2006.

The HCS found that confidence about various aspects of today’s health care system has remained fairly stable2 – and undiminished either by the passage of, or the recent Supreme Court decision on, the Patient Protection and Affordable Care Act (PPACA); more than one-half (56 percent) of respondents report being extremely or very confident that they are able to get the treatments they need, and another quarter (27 percent) report being somewhat confident. Only 16 percent of 2012 HCS respondents said they were “not too” or “not at all” confident that their employer/union would continue to offer health insurance for workers – though that was more than twice as many as expressed that level of concern in 2000.

While respondents were generally supportive of the measures broadening access and/or choice in the PPACA, nearly two-thirds said they hadn’t yet noticed any changes to their health insurance – and among the 31 percent that had, 70 percent said the changes were negative, including impacts such as higher premiums, higher copays, and reduced coverage of services.

Despite a falloff from previous surveys, more than two-thirds (69 percent) of employed workers said that benefits were “very important” in their employment decision, with health insurance topping the list of those important benefits by an enormous margin. Nearly six out of 10 said that health insurance was the most important employee benefit, as has been the case for some time now.

All of which reinforces that, while many see room for improvement in the current system, those that have employment-based health insurance now like it, and want to keep it.

It will be interesting to see if, in the months and years ahead, they get that wish.

- Nevin E. Adams, JD

More information from the 2012 Health Confidence Survey (HCS) is online here. The HCS is sponsored by EBRI and Mathew Greenwald & Associates, Inc., a Washington, DC-based market research firm, and made possible by the generous support of the HCS underwriters, listed here.

1 More information about private health insurance exchanges is available in the July 2012 EBRI Issue Brief “Private Health Insurance Exchanges and Defined Contribution Health Plans: Is It Déjà Vu All Over Again?”

2Asked to rate the health care system, survey respondents offered a diverse perspective: 17 percent rated it either “very good” or “excellent,” 28 percent consider it to be “good,” 28 percent say “fair,” and 26 percent rate it “poor.” However, the percentage of Americans rating the health care system as poor doubled between 1998 and 2004 (rising from 15 percent to 30 percent).

3Of more than passing concern is the finding that among those experiencing cost increases in their plans in the past year, nearly a third had decreased their contributions to retirement plans, while more than half have decreased their contributions to other savings as a result.

Confidence Intervals

Last week, House Ways and Means Committee Chairman Dave Camp (R-MI) released a report that included responses from more than 70 percent of America’s Fortune 100 companies—a report that indicated that those employers could “save hundreds of millions of dollars a year under the new health care law by simply terminating health insurance for their workers and dumping these employees into taxpayer-funded health care exchanges.”

This, of course, follows recent arguments challenging the constitutionality of the Patient Protection and Affordable Care Act (PPACA) before the United States Supreme Court—with a ruling anticipated by the end of June. At which point, regardless of the outcome, healthcare reform seems likely to remain an issue for the 2012 political campaign.

What remains to be known is what that will mean for employment-based health coverage⁽¹⁾—and American’s confidence in their health care system.

Last year, EBRI’s Health Confidence Survey⁽²⁾ noted that, in 2011, 57 percent of individuals with employment-based coverage were extremely or very confident that their employer or union would continue to offer health coverage. That was down from 68 percent in 2000, but most of that erosion occurred between 2000 and 2002.

Indeed, other than a one-year dip in 2010 (to 52 percent), the percentage who were extremely or very confident has remained just below 60 percent. And, for the very most part, individuals who had such coverage were satisfied with it (60 percent of those with health insurance coverage are extremely or very satisfied with their current plan, and 29 percent were somewhat satisfied—see this EBRI analysis, online here.

The 2011 HCS⁽³⁾ did highlight some areas of concern. While more than half (56 percent) said they were extremely or very satisfied with the quality of the medical care they have received in the past two years, just 18 percent were extremely or very satisfied with the cost of their health insurance, and only 15 percent were satisfied with the cost of health care services not covered by insurance. Moreover, the 2011 HCS also found that individuals have a low level of confidence that they can afford to purchase health coverage on their own—even if their employer or union gave them the money to do so.

This year’s Health Confidence Survey (HCS) will be fielded in July, allowing time for the Supreme Court’s ruling to come to light, so that survey respondents can better assess and reflect on its impact on their circumstances. In this, the 15^th annual HCS, the issues of health care cost, coverage, quality, and confidence in the future of the employment-based system are, if anything, more important than ever—and the need for a clear understanding of the American public’s attitudes on health care never greater.

- Nevin E. Adams, JD

Endnotes

(1) The Congressional Budget Office recently revised its estimates of the number of people projected to have employment-based coverage in the future. In a recent blogpost, Paul Fronstin, director of EBRI’s Health Education and Research Program, said: “As the CBO notes in a footnote for its 2019 estimates, as a result of PPACA, about 14 million fewer people are expected to have employment-based coverage (about 11 million individuals will lose access to employment-based coverage, and another 3 million will decline employment-based coverage and enroll in health insurance from a different source), while about 9 million will newly enroll in employment-based coverage under PPACA.”

(2) The HCS is co-sponsored by the Employee Benefit Research Institute (EBRI), a private, nonprofit, nonpartisan public policy research organization, and Mathew Greenwald & Associates, Inc., a Washington, DC-based market research firm. The 2011 HCS data collection was funded by grants from 12 private organizations. Staffing was donated by EBRI and Greenwald & Associates. HCS materials and a list of underwriters may be accessed at the EBRI website: www.ebri.org/hcs If your organization would like to help underwrite the 2012 HCS, please contact Ken McDonnell, at (202) 775-6367, or e-mail: mcdonnell@ebri.org or Paul Fronstin at (202) 659-0670, or e-mail: fronstin@ebri.org

(3) Additional information from the 2011 HCS is online here.

“Essential” Information

About a month ago, the Department of Health and Human Services (HHS) released a bulletin outlining proposed policies that it said would “give states more flexibility and freedom to implement the Affordable Care Act.”

It did that by proposing to allow individual states to select a single benchmark to serve as the standard for qualified health plans inside the Exchange operating in their state – and for the plans offered in the individual and small group markets in their state. The Patient Protection and Affordable Care Act requires that health insurance plans offered in the individual and small group markets, both inside and outside the ”Affordable Insurance Exchanges” (Exchanges), offer a comprehensive package of items and services, known as “essential health benefits(1).” This benchmark would set the standard of the items and services included in the essential health benefits package called for in PPACA(2).

Acknowledging that “[t]There is not yet a national standard for plan reporting of benefits,” HHS also noted that PPACA does not provide a definition of “typical,” and it therefore gathered benefit information on large employer plans (which account for the majority of employer plan enrollees), small employer products (which account for the majority of employer plans), and plans offered to public employees (3).

In releasing its proposal, HHS noted that “[n]ot every benchmark plan includes coverage of all 10 categories of benefits identified in the Affordable Care Act” and that “the most commonly non-covered categories of benefits among typical employer plans are habilitative services, pediatric oral services, and pediatric vision services.”

However, HHS did at least suggest some boundaries, noting that states “would choose one of the following health insurance plans as a benchmark”:

•One of the three largest small group plans in the state (4);
•One of the three largest state employee health plans;
•One of the three largest federal employee health plan options;
•The largest HMO plan offered in the state’s commercial market.

HHS is soliciting public input on this proposal – though comments are due by January 31, 2012. You can send comments to EssentialHealthBenefits@cms.hhs.gov.


Nevin E. Adams, JD


The essential health benefits bulletin is online at http://cciio.cms.gov/resources/files/Files2/12162011/essential_health_benefits_bulletin.pdf

A fact sheet on the essential health benefits bulletin is online at: http://www.healthcare.gov/news/factsheets/2011/12/essential-health-benefits12162011a.html

The Institute of Medicine’s report on Essential Health Benefits is online at http://www.iom.edu/Reports/2011/Essential-Health-Benefits-Balancing-Coverage-and-Cost.aspx

Note: The HHS bulletin addressed only the services and items covered by a health plan, not the cost sharing, such as deductibles, copayments, and coinsurance. HHS noted that the cost-sharing features will be addressed in future bulletins and cost-sharing rules will determine the actuarial value of the plan.

See also Paul Fronstin and Murray N. Ross, “Addressing Health Care Market Reform Through an Insurance Exchange: Essential Policy Components, the Public Plan Option, and Other Issues to Consider,” EBRI Issue Brief, no. 330, June 2009.

(1)Beginning January 1, 2014, qualified health plans sold in health insurance exchanges must cover all essential benefits. In addition, new plans sold in the individual and small group markets must cover essential benefits, regardless of whether plans are sold inside or outside of state health insurance exchanges.

(2) The following benefit classes are identified as essential benefit classes
◦Ambulatory patient services
◦Emergency services
◦Hospitalization
◦Maternity and newborn care
◦Mental health and substance use disorder services, including behavioral health treatment
◦Prescription drugs
◦Rehabilitative and habilitative services and devices
◦Laboratory services
◦Preventive and wellness services and chronic disease management
◦Pediatric services, including oral and vision care

(3) HHS noted that it has considered a report on employer plans submitted by the Department of Labor (DOL), recommendations on the process for defining and updating EHB from the Institute of Medicine (IOM), and input from the public and other interested stakeholders during a series of public listening sessions. In 2010, Paul Fronstin, Ph.D, Director, Health Research & Education Program at the Employee Benefit Research Institute (EBRI) was appointed to the Institute of Medicine (IOM) Committee on Determination of Essential Health Benefits. For more information on the essential benefits proposal, you can contact him at Fronstin@ebri.org.

(4) an Illustrative List of the Largest Three Small Group Products by State was just published by HHS at http://cciio.cms.gov/resources/files/Files2/01272012/top_three_plans_by_enrollment_508_20120125.pdf.