Subpoenas have been issued to a company that solicits memberships for a health insurance alternative that offers no guarantees for covering medical bills.
New York State officials are investigating a business representing a major Christian group offering an alternative to health insurance, joining several states scrutinizing these cost-sharing programs that provide limited coverage.
On Wednesday, New York state insurance regulators issued a subpoena to Aliera, which markets the Christian ministry run by Trinity Healthshare, according to people who have seen the subpoena.
More than one million Americans have joined such groups, attracted by prices that are far lower than the cost of traditional insurance policies that must meet strict requirements established by the Affordable Care Act, like guaranteed coverage for pre-existing conditions.
These Christian nonprofit groups offer low rates because they are not classified as insurance and are under no legal obligation to pay medical claims. But state regulators are questioning some of the ministries’ aggressive marketing tactics, saying some consumers were misled or did not grasp the lack of comprehensive coverage in the case of a catastrophic illness.
Some members have paid hundreds of dollars a month, and then have been left with hundreds of thousands in unpaid medical bills in several states where the ministries, which are not subject to regulation as insurers, failed to follow through on pooling members’ expenses.
Numerous states are taking action against Aliera Healthcare, the for-profit company based in Georgia that was been the subject of an investigation by The Houston Chronicle. The Texas attorney general sued Aliera last summer to stop it from offering “unregulated insurance products to the public,” while Connecticut, Washington and New Hampshire are trying to stop Trinity and Aliera from doing business in those states.
Regulators say they are concerned that the ministry is, in fact, operating as an insurer. In New York, which has not previously investigated any ministries, there have been 15 to 20 complaints, including accusations that Aliera misrepresented the coverage being offered. It’s not clear how many customers Aliera has in New York.
“It’s deeply disappointing to see state regulators working to deny their residents access to more affordable alternatives offered by health care sharing ministries,” said Aliera in an emailed statement.
“We’re proud of the work we do to help ministries provide a more flexible method for securing affordable high-quality health care, and we will continue to vigorously defend against the false claims about our company, just as we expect the health care sharing ministries we serve to vigorously defend their members’ right to exercise their religious convictions in making health care choices,” it said.
Trinity, which was not subject to the subpoena, has said its website makes clear that the ministry does not offer health insurance.
The insurance industry appears likely to have another big year in 2020, as growth in government and commercial markets is expected to continue.
But a presidential election and new transparency initiatives could throw some major curveballs to payers.
Here are the top five issues and trends to watch out for in the next year:
Enrollment growth in Medicare Advantage is likely to continue next year, as more than 22 million Medicare beneficiaries already have a plan. But what will be different is diversification into new populations, especially as insurers pursue dually eligible beneficiaries on both Medicare and Medicaid.
“This is being made possible because of strong support from government,” said Dan Mendelson, founder of consulting firm Avalere Health.
Support for Medicare Advantage “transcends partisanship and that has been true under Trump and Obama,” he added.
New benefit designs, such as paying for food or transportation to address social determinants of health, are also going to increase in popularity. The Centers for Medicare & Medicaid Services (CMS) has made it easier for plans to offer such supplemental benefits.
This past year saw CMS release a major rule on transparency that forces hospitals to post payer-negotiated rates starting in 2021 for more than 300 “shoppable” hospital services.
The rule, which is being contested in court, could fundamentally change how insurers negotiate with hospitals on how to cover those services. The rule brings up questions about revealing “private information for the sake of transparency,” said Monica Hon, vice president for consulting firm Advis.
But it remains unclear how the court battle over the rule, which has garnered opposition from not just hospitals but also insurers, will play out. Hospital groups behind the lawsuit challenging the rule have had success getting favorable rulings that struck down payment cuts.
“I think there is going to be a lot of back and forth,” Hon said. “Whatever the result is that will impact how payers and providers negotiate rates with this transparency rule.”
2020 is a presidential and congressional election year, and traditionally few major initiatives get going in Congress. But experts say the same goes for regulations as administrations tend not to issue major regulations in the run-up to the vote in November, said Ben Isgur, leader of PwC’s Health Research Institute.
“What we will end up with is much more change on regulations on the state side,” Isgur said.
But new regulations on proposals that have been floated could be released. Chief among them could be a final rule to halt information blocking at hospitals and a new regulation on tying Medicare Part B prices for certain drugs to the prices paid in certain countries.
Congressional lawmakers are still hoping to reach a compromise on surprise billing, but they don’t have much time before campaigning for reelection in November.
A lot of the healthcare direction will be set after the presidential election in November. If a Democrat defeats President Donald Trump, then waivers for items like Medicaid work requirements and block grants will likely go by the wayside.
“Depending on who takes the White House and Congress, are we going to further repeal the Affordable Care Act and replace it or will we have Medicare for All,” Isgur said.
Insurers certainly weren’t shy about engaging in mergers and acquisitions in 2019, and that trend doesn’t appear likely to dissipate next year.
But the types of mergers might be different. Insurers and providers are increasingly looking at deals that would offer a vertical integration, such as acquiring more pharmacy services or a technology company to enhance the patient experience. Plenty of big-ticket vertical deals, such as CVS’ acquisition of Aetna and Cigna’s purchase of Express Scripts, have changed the industry landscape significantly.
“Deals in 2020 are going to be much more around the identity,” Isgur said. “Five years ago we had a lot of horizontal deals where health systems got bigger and regional payers got bigger.”
Insurers are going to try to find new ways to push patients toward outpatient services to avoid higher costs from going to a hospital.
For instance, “we are seeing a lot of payers not going to honor hospital imaging,” said Hon. “A lot of payers are saying we want you to go outside the hospital and that is a lot cheaper for us,” she said.
Instead, payers will try to steer patients toward imaging centers or physicians’ offices.
“We are seeing that with imaging and free-standing surgical centers now being able to do a lot more,” she added.
Insurers are also starting to use primary care more proactively to “ensure that they understand the needs of the patient, their needs are being addressed,” Mendelson said.
For many employers, narrowing provider networks has been a bridge too far, despite unrelenting healthcare cost growth.
A recent Los Angeles Times profile of a Boston union that was able not only to lower costs but also nearly eliminate employee cost-sharing may make doubters reconsider. Unite Here Local 26, which represents 9,000 hotel workers and their families, implemented a narrow network health plan in 2013, when two-thirds of its members agreed to forego care at certain marquee academic hospitals, which charged two to three times more than others in the Boston area.
Today the union actually pays less in medical costs per member than it did six years ago, and premiums are ten percent lower than the national average, despite Boston being one of the highest-cost healthcare markets in the country. Employees pay no deductibles, and generic medications cost them only $1. Savings have translated into raises for many employees, with some low-income workers seeing a pay jump of up to 39 percent across six years.
As we’ve discussed in the past, employers are reaching a limit on how high they can push deductibles, especially in a tight labor market. Some are beginning to experiment with various network options that lower health care costs—but many have been reticent to change benefit design in any way that could be perceived as narrowing choice.
Local 26’s experience shows that well-designed narrow networks, implemented with employee education and buy-in, can provide cost relief for both businesses and individuals that can be sustained over time.