The Department of Labor has finalized a rule allowing more options outside of the failing and exorbitantly priced “Affordable Care Act” plans for some 15 million Americans who are self-employed, their 25 million employees, and millions more family members.
The ruling would allow these individuals greater flexibility to band together in Association Health Plans (AHPs). “AHPs are about more choice, more access, and more coverage,” explained Department of Labor Secretary Alexander Acosta following the release of the rule.
It is estimated that by 2022 AHP-run plans would cost $8,700 to $10,800 less per person per year than individual market plans, according to an Avalere study.
Reducing premium cost isn’t the only potential advantage for participants in AHPs. “To maximize the impact AHPs can have on lowering costs, the plans should shun arrangements with big insurance, and self-fund instead,” stated the Association of American Physicians and Surgeons (AAPS).
Cutting out the middlemen from the patient-doctor relationship means dollars are more likely to be spent on actual care instead of, for example, preauthorizations, utilization review, appealing claims denials, and other administrative tasks imposed by third-party payers.
Self-funded arrangements would also increase the market demand for transparent pricing, as pioneered at the Surgery Center of Oklahoma, where posted prices are often one-tenth the list price of procedures at hospital facilities. Transparency not only pushes down prices, but increases overall patient and physician satisfaction, as shown in a recent study from Johns Hopkins University. Patients benefit when allowed options for medical care without first being forced to pay an entity such as UnitedHealth Group, which surpassed $200 billion in revenue for the first time in 2017. Direct Primary Care is another innovative model demonstrating the power of excising third parties, resulting in lower costs for both routine and chronic care, and related services like imaging, labs, and prescriptions.
Transparent pricing would also reveal the $200 billion per year leak that goes into the pockets of helpful-sounding entities like group purchasing organizations (GPOs) and pharmacy benefits managers (PBMs).
AAPS is calling for additional action to amplify the ability of participants in AHPs and other consumer-directed options to contract directly with the doctors of their choice.
One especially simple and effective change would be to allow Health Savings Accounts to be used in conjunction with transparent Direct Primary Care arrangements. Earlier this week AAPS wrote Secretary of Treasury Steve Mnuchin requesting that he reverse a misguided opinion issued by former IRS Commissioner Koskinen blocking the use of HSAs for DPC. Congress can also permanently correct this error through pending legislation like HR 365, widely supported by patients and doctors.
“We applaud this increased freedom from swamp-care, and look forward to further steps that will empower patients to control their own spending and care,” concludes AAPS.
The Association of American Physicians and Surgeons (AAPS) is a national organization representing physicians in all specialties, founded in 1943.