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 identify is Sabrina Corlette and I’m a Analysis Professor at Georgetown College’s McCourt Faculty of Public Coverage.
It’s an honor for me to be a part of this dialogue of insurance policies to assist cut 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 larger influence than the Affected person Safety and Inexpensive Care Act (ACA).
Right now, People with ESI take as a right most of the protections they take pleasure in underneath the ACA, together with protections for folks with pre-existing circumstances, protection for younger adults, cost-free preventive providers, 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 shoppers 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 good points underneath 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 purpose 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 greater reimbursement charges.
Second, a scarcity of worth transparency has left many employers at the hours of darkness about what’s driving value development.
Third, most 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 not resolve the affordability disaster in well being care alone – they want help from policymakers.
Sadly, three of the 4 ideas into consideration at this time don’t deal with the price drivers in our system. They merely shift the burden of value development to employers with older, much less wholesome workforces.
First, Affiliation Well being Plans: The first method AHPs can supply low premium charges is thru the exemption from ACA ranking rules. This permits them to cherry decide 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 main dangers. First, many small employers could also be uncovered to surprising monetary legal responsibility after they self-fund their plan.
Second, if small employers with youthful, more healthy workers shift to level-funded merchandise in vital numbers, it’s going to depart employers with older, sicker staff behind. This causes hostile choice, the place premium charges rise for employers whose teams can not cross the stop-loss issuers’ underwriting.
Simply as with AHPs, this laws does nothing to deal with the underlying purpose why there may be an affordability disaster for ESI: the costs that business insurers pay for supplier providers and pharmaceuticals.
Third, the “Telehealth Profit Enlargement for Employees Act”:
Let’s be clear: there may be nothing in federal legislation that forestalls employer group well being plans from protecting telehealth providers. Certainly, 96% of huge companies already accomplish that.
Employers are struggling to afford the rising value of medical insurance – that is indeniable. However encouraging the proliferation of stripped-down telehealth advantages that discourage care coordination, don’t cowl staple items like hospitalization, pharmaceuticals, and labs, and don’t have to adjust to shopper protections or psychological well being parity, just 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 proper route.
Thanks to 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.