Testimony of Sabrina Corlette, J.D. earlier than the U.S. House of Representatives Education & Workforce Health Subcommittee, April 26, 2023
Good morning Chairman Good, Ranking Member DeSaulnier. My identify is Sabrina Corlette and I’m a Research Professor at Georgetown University’s McCourt School of Public Policy.
It is 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 current years 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 Patient Protection and Affordable Care Act (ACA).
Today, Americans 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 companies, and caps on our annual out-of-pocket prices.
More just lately, 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 yr, the Inflation Reduction Act (IRA) has helped advance the protection and affordability positive aspects underneath the ACA and is reducing prescription drug prices for Medicare enrollees.
However, 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 main 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 midnight about what’s driving price 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’t remedy the affordability disaster in well being care alone – they want assist from policymakers.
Unfortunately, three of the 4 ideas into consideration immediately don’t deal with the price drivers in our system. They merely shift the burden of price development to employers with older, much less wholesome workforces.
First, Association Health Plans: The main means AHPs can supply 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 Protection 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 once they self-fund their plan.
Second, if small employers with youthful, more healthy staff shift to level-funded merchandise in vital numbers, it’ll go away employers with older, sicker employees behind. This causes antagonistic choice, the place premium charges rise for employers whose teams can’t move the stop-loss issuers’ underwriting.
Just as with AHPs, this laws does nothing to handle the underlying purpose why there’s an affordability disaster for ESI: the costs that business insurers pay for supplier companies and pharmaceuticals.
Third, the “Telehealth Benefit Expansion for Workers Act”:
Let’s be clear: there’s nothing in federal legislation that forestalls employer group well being plans from protecting telehealth companies. Indeed, 96% of enormous companies already achieve this.
Employers are struggling to afford the rising price of medical insurance – that is indeniable. But encouraging the proliferation of stripped-down telehealth advantages that discourage care coordination, don’t cowl basic items like hospitalization, pharmaceuticals, and labs, and wouldn’t have to adjust to shopper protections or psychological well being parity, is just not 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 best course.
Thank you 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.