Preexisting Conditions & Wellness Incentives: A Horse of a Different Color?

Vincent van Gogh (1899)

The Washington Post has an interesting article which covers an aspect of pending health reform legislation that hasn’t received much attention as of late: wellness incentives tied to premium rates. As I have noted on this blog before, Senators Harkin and Baucus were both as of late said to have been considering legislative provisions which would enable employers to both reward and punish employees who fail to meet certain health goals. In pending legislation (and its practical application) it would seem the line between reward and punish has begun to blur.

The WaPo article relates how provisions passed by the Senate finance and health committees could more than double the allowable insurance premium increases tied to various conditions–or more precisely, to employee medical evaluations which fail to meet proscribed guidelines regarding weight, glucose and cholesterol levels, and other biometrics in addition to smoking cessation. Read more

Employees, Fearing Increased Cost-Sharing and Loss of Benefits, Utilize Current Employer-Based Health Plans More

Photo by Interplast via Flickr

The Kaiser Family Foundation reports that a recent survey reveals that employees are utilizing employer-based health plans more in fear that their plans will increase cost-sharing or dissolve altogether.

KFF reports:

U.S. workers are making more use of their employer-sponsored health insurance benefits because of concerns that employers could cut benefits or increase costs during the economic recession, according to a survey released Friday by the International Foundation of Employee Benefit Plans, the Milwaukee Journal Sentinel’s “Dollars & Sense” blog reports. IFEBP surveyed its members between March 30 and April 6 and found that one-third reported an increase in their workers filling prescription medications or undergoing costly medical procedures before their insurance runs out, the study found. Sally Natchek, senior director of research for IFEBP, said, “Plan participants are feeling anxious about the possibility of increased cost-sharing and a reduction in benefits due to the financial crisis.”

The International Foundation reports that:

[W]hile few plan sponsors (3.6%) are cutting or considering cutting health care benefits altogether, many are ramping up their cost-sharing approaches.  Thirty-five percent of plan sponsors are increasing employee deductibles, coinsurance or copays due to the financial crisis.  Nearly the same proportion are also increasing employee premiums.  Other cost-sharing actions that plan sponsors are taking include adding consumer-driven health plans as an option (12.8%), replacing a current plan with a consumer-driven plan (9.6%) and instituting spousal charges (10.8%).

The Foundation report confirms that more employers are using consumer-directed health plans in an attempt to rein in the cost of health benefits.

Perhaps the silver lining of this survey, though, is that there was also found to be “a heightened focus on wellness programs.  Eighteen percent of the respondents have introduced or are considering introducing wellness initiatives due to the economy (Foundation).” In a recent post, we noted that Kaiser had reported that

Eighty percent of large U.S. companies this year are offering chronic disease management programs for workers in an effort to reduce health care costs, up from 51% last year, according to a new survey by Hewitt Associates, the Houston Chronicle reports.

At the confluence of unfavorable economic conditions, rising health care and insurance costs and an administration which has vowed reform, these burgeoning trends may be only the forward guard in changes to employer-based plans. Driven by economic concerns, there seems to have been generated among employers an understanding that one way of avoiding the high costs associated with acute and/or catastrophic health care, is simply to help employees to avoid becoming sick (it may be only a matter of time before employers begin handing out “an apple a day.”) Unfortunately, with increasing frequency employers also seem to be learning that another means of avoiding the costs of  health care is to simply discontinue,  decrease, or “shift” the costs of health benefits. The numbers seem to suggest that employees have read the writing on the wall, and are visiting their doctors while they still can.