Author: Ideon

**Ideon is the company formerly known as Vericred. Vericred began operating as Ideon on May 18, 2022.**

We’ve made it our mission to enable technology companies to build innovative solutions that bring transparency, efficiency and decision support to the health insurance and employee benefits spaces. Earlier this week we launched our Medicare Advantage Rating API, which will now allow InsurTech and digital health platforms to deliver plan search, quoting and other features to seniors, employers and brokers in the flourishing over-65 market.

Using Vericred as their data foundation, technology companies including online brokers can use the new API to build Medicare Advantage solutions to better support the 22 million Americans now enrolled in Medicare Advantage plans. Let’s dive in to better understand Medicare Advantage basics and why these plans are increasingly popular.

Medicare Advantage — also known as Medicare Part C — is a privately administrated type of Medicare, which is the United States government’s federal health insurance program for Americans age 65 and older and younger people meeting certain criteria.

Traditional Medicare consists of two parts:

• Part A – Hospital Insurance: Most beneficiaries are eligible for Part A premium-free, which covers inpatient hospital stays, care in a nursing facility and hospice services.
• Part B – Medical Insurance: Part B covers outpatient medical care, such as preventive services, doctors’ visits, laboratory and diagnostic tests, vaccinations and outpatient procedures. The premium for Part B is $135.50 monthly for most people, but those in higher income brackets pay as much as $460.50 per month.

Enacted as part of the Medicare Modernization Act of 2003, Part D adds coverage for self-administered prescription drugs. Part D plans can be purchased to supplement Original Medicare (Parts A and B) or bundled into a Medicare Advantage Plan.

What is Medicare Advantage (Medicare Part C)?

Medicare Advantage is a program in which individuals who qualify for Medicare can enroll in alternative, certified health plans offered by private insurance companies instead of the government-run Original Medicare plan (Part A + Part B). These plans include Part A, Part B, and usually Part D.

What services do Medicare Advantage plans cover?

Medicare Advantage plans are regulated by the Centers for Medicare and Medicaid Services (CMS) and must cover all of the services — except hospice — that Medicare Parts A and B cover. In addition, many Medicare Advantage plans also cover benefits not included in Original Medicare, such as vision, hearing and dental coverage, in-home support, wellness programs, and other supplemental services.

How does Medicare Advantage work?

The U.S. government (Medicare) pays the private insurance carrier offering the Medicare Advantage plan a fixed monthly fee for each enrolled member. Members are then provided coverage through the private carrier rather than through the government. Unlike with Original Medicare, which permits members to visit any healthcare provider who accepts Medicare, Medicare Advantage enrollees may be limited only to doctors, specialists and hospitals within their private insurance carrier’s provider network.

How much do enrollees pay?

Most Medicare Advantage beneficiaries pay monthly premiums to their private insurance carrier that vary depending on the specific plan in which they’re enrolled. These premiums can range from just a few dollars to hundreds of dollars per month. Some “zero premium” plans do not require members to pay a separate Medicare Advantage premium at all, but nevertheless these plans are not free, as enrollees must continue to pay the $135.50 (or more) Part B premium. Some Medicare Advantage plans go even further and pay some or all of the Part B premium, reducing the amount the beneficiary pays to the government each month for Medicare coverage. According to CMS, the average monthly Medicare Advantage premium (not including Part B) is $28, a six percent decrease compared with 2018.

In addition to premiums, beneficiaries are also responsible for paying a portion of the healthcare costs they incur. Under Original Medicare, enrollees are responsible for paying 20% of the costs of most services and have no out-of-pocket limit. Medicare Advantage plans, however, often charge members a set dollar amount — instead of a fixed percent — for most services and have an annual out-of-pocket maximum, after which the insurance carrier will pay for all covered costs.

Why is Medicare Advantage becoming more popular?

By providing supplemental, flexible benefits, and low premiums, Medicare Advantage plans have proven attractive to Medicare enrollees. According to CMS, the number of Medicare Advantage enrollees nationwide has expanded this year to an all-time high of about 22 million, a 32 percent increase since 2015. This represents about 36 percent of all Medicare beneficiaries.

Up Next: VeriStat series on Medicare Advantage plans and benefits

As we’ve explored above, Medicare Advantage is an expanding, popular and diverse alternative to Original Medicare, albeit with a different cost-sharing structure and wide-ranging benefits. Next, our VeriStat series jumps into deeper analysis to further investigate the intricate Medicare Advantage market and its various plan designs.

Interested in building digital user experiences for the Medicare Advantage market? Check out Vericred’s digital toolkit, which includes use cases on developing solutions for this growing insurance market.

**Ideon is the company formerly known as Vericred. Vericred began operating as Ideon on May 18, 2022.**

This is the sixth year in which individual health insurance plans have been offered under the Affordable Care Act. The early years of the market were characterized by significant fluctuations in carrier participation and premiums as players adjusted their strategies in response to the new environment. In this Veristat post, we examine the national trend in premiums from 2018 to 2019 in the individual market and the way in which county-level premium changes relate to carrier entry and exit.

The data science team at Vericred analyzed the lowest premiums available in each county for an individual plan sold on the federal or state exchanges in 2018 and 2019 for a 40-year-old nonsmoker. We excluded catastrophic plans, as they are only available to those under age 30 or with a hardship exemption.

The results show that the median US county saw a decrease of 2% (-$7) for its lowest cost plan. This stands in stark contrast to previous years, when premiums rose sharply. Also in contrast to prior years, this year saw ample carrier entry. There were 16 carrier entrances to new states and 34 instances of carriers expanding their service areas within a state. Conversely, no carrier left a state entirely, and there were only 7 instances of existing carriers contracting their service areas within a state. As a result, almost one in four counties had more carriers providing plans in 2019 compared with 2018 and only 1% had fewer carrier options.

On balance, the counties with increased competition showed decreased premiums. The median county with more carriers in 2019 than 2018 had a 6% ($21) decrease in its lowest premium. Conversely, the much smaller number of counties with decreased competition tended to show increased premiums. The median county with fewer carriers had a 7% ($25) increase in its lowest premium. The counties with no change in competition showed very little change in premiums. The median county with the same number of carriers in 2018 and 2019 had less than a 1% increase ($1) in its lowest premium.

The individual ACA market appears to have stabilized in 2019, particularly in contrast to the carrier exits and large premium increases seen in previous years. This year saw substantially more carrier entry than exit, and premiums generally remained similar to their 2018 levels. Almost a quarter of counties had more competition in 2019 that 2018, and these counties tended to see decreased premiums. It remains to be seen if this stability will continue into 2020 as the market continues to react to changes in the ACA landscape including the zeroing of the individual mandate and the increased availability of short-term health insurance plans.

**Ideon is the company formerly known as Vericred. Vericred began operating as Ideon on May 18, 2022.**

A few weeks ago, I shared an analysis we developed at Vericred that explored the accuracy with which hospital websites disclose the health plans where they participate in-network. The results were very revealing, so we decided to extend that analysis to examine the quality of Machine Readable Directories (“MRDs”) mandated by CMS for plans sold through Healthcare.gov. MRDs are used on healthcare.gov to enable shopping for a health plan based on the doctor(s) or hospital(s) you want to keep.

We learned that MRDs are not much better than hospital websites as a source of whether or not a hospital is truly in-network.

We analyzed the MRDs from the four carriers offering Individual under 65 (ACA or “Obamacare”) plans around Columbus Ohio on healthcare.gov.  We examined the accuracy with which each carrier included, or excluded, the 29 hospitals in their respective MRDs. As the source of truth, we again used each carrier’s consumer facing provider directory.

As one of the carrier’s MRDs was noted as “Medicare” we excluded that carrier’s MRD from the analysis. Even after removing one of the four carriers, the overall results were as bad, if not worse, than the hospital websites.

In the aggregate, the three remaining MRDs were incorrect approximately 24% of the time, either including a hospital as in-network when it was not, or vice versa.  No MRD was perfect, with error rates ranging from 14% to 41%.

Just under 5% of the time, these MRDs incorrectly excluded in-network hospitals; a false negative that could result in an individual selecting an alternative plan with their hospital, at perhaps a higher premium.

More disconcerting was that nearly 20% of the time, the MRDs showed a hospital as accepting a plan when in fact they did not, creating a false positive. In this case someone shopping for a plan may enroll with the expectation that their local, or preferred, hospital will be in-network when in fact it is not.  Those anticipating a hospital stay, for the delivery of a baby for example, may not be able to use their chosen hospital despite doing their diligence.

The conclusion is the same as in my last analysis.  Before enrolling in a plan based on a particular provider choice, make sure you check with your prospective carrier.  And even then, there is no guarantee that your provider will remain in network throughout the year, so be sure to double-check again before going to the hospital.

**Ideon is the company formerly known as Vericred. Vericred began operating as Ideon on May 18, 2022.**

Nearly 70% of Hospital Websites analyzed missed the mark.

A rule issued with much fanfare by the Department of Health and Human Services now requires that hospitals make their “chargemaster” public via the internet effective January 1^st, 2019. The chargemaster is a list detailing the official rate or list prices charged by a hospital for individual procedures, services, and goods.  There are no hospitals operating within the U.S. that are exempt under the new rule.

Much has been written about this new rule, with most experts correctly pointing out that very few people actually pay the chargemaster price because they have health insurance.  Instead, health insurance carriers and hospitals negotiate, seeking to reach agreement on lower costs for procedures for each carrier’s members.  In an ideal world, it would be the negotiated or contract reimbursement rates that would be made available online to patients.  If a carrier does not reach agreement with any given hospital, then charges incurred by that carrier’s members at that hospital are treated as out-of-network and/or billed at the chargemaster rate.

With this policy in place, prospective patients are being encouraged to look to hospital websites to understand the cost of services. However, if patients with health insurance will ultimately pay less, then it would be reasonable to also look to those same websites to determine whether the hospital accepts the patient’s health insurance plan.

You would think so… however, the Vericred team investigated further and revealed surprising results.

We took a look at the websites for 29 hospitals in the Columbus, Ohio area to analyze the accuracy of the insurance information they posted. Specifically, we zeroed in on the section of their websites that outlined “insurance(s) accepted,” with a focus on Individual Under 65 (ACA or “Obamacare”) plans, available from the four health insurance carriers offering coverage on Healthcare.gov.

We compared our findings to each health insurance carrier’s consumer-facing provider directory as the “source of truth.”

The results were stunning:

• Of the 29 hospitals analyzed, nine (31%) hospitals did not include information on which insurance they accept on their website.
• Of the remaining 20 hospitals, more than half provided incorrect information
• Only nine (or 45% of the hospital websites displaying such information) correctly conveyed whether or not they accepted one or more carrier’s ACA plans

Further, as a patient looking at these websites, there was a 9% chance that the hospital whose website they viewed actually accepted their plan, but showed otherwise — an avoidable false negative that could result in the patient going to different, less convenient, hospital.

Even more disconcerting, we found a 15% chance that the hospital will indicate that they take a plan when they do not — a false positive that has the potential to spiral into disastrous financial consequences to the patient. In this situation, the patient could select a hospital with the mistaken belief that their services will be covered by their insurance as in-network. Not only will that prove not to be the case, but the patient may well be billed at that chargemaster price which so few are.

The chargemaster ruling encourages us to look to hospital websites for the cost of services.  But the true cost of service depends on whether or not the hospitals accept the patient’s insurance and if so, the negotiated rates.  Hospital websites are not a reliable source for neither cost nor coverage.  Patients will still need to call their insurance companies to determine this information.

Moral of the story: Until hospitals update their website information with complete, accurate and timely information, patient beware — take a good look at the chargemaster; you may end up paying those rates!

**Ideon is the company formerly known as Vericred. Vericred began operating as Ideon on May 18, 2022.**

This is the third of three posts on this subject

In this blog series for Diabetes Awareness month, we are exploring how the medications used to treat diabetes are covered by ACA health insurance plans. In our last two posts, we showed that many plans exclude entire classes of diabetes medication and explored the prevalence of prior authorization requirements for insulins. In this post, we will walk through a real-life example of how much drug coverage costs for a common diabetes medication.

Lantus is a popular, long-acting insulin used to control blood sugar in people with diabetes. The data science team at Vericred reviewed several silver plans on the 2019 individual market in the state of New York to see what the yearly cost of Lantus would be assuming one carton of Lantus injection pens per month; GoodRx estimates the cost for one carton to be $281.

An individual in New York covered by one of these silver plans will pay anywhere from $480 to $3,372 out-of-pocket for a year of Lantus. That’s up to seven times as much for the same medication. Real life is more complicated than this—most diabetes patients will see multiple doctors and fill a variety of prescriptions—but this simplified example illustrates the importance of carefully researching your health insurance options.

The out of pocket cost for Lantus depends on more than the premiums, deductibles, out of pocket maximums, and cost sharing for prescriptions. The widespread in the cost of Lantus is due to differences that may be harder to notice. Plan 1 does not apply the deductible to drug costs, meaning that from the first dollar the individual pays only the copay for Lantus. Plan 2 has a separate (and much lower) deductible specifically for drugs. Plan 3 requires the full deductible to be met before the copay applies. There are also differences in the plans’ formularies. Plans 1 and 3 cover Lantus as a preferred brand drug. Plan 2 covers Lantus as a non-preferred brand drug, meaning the cost sharing is higher than it would be for a preferred brand—in this case, a percentage of the drug’s cost rather than a flat copayment). The formulary for Plan 4 does not cover Lantus at all, meaning the plan will not pay for any portion of the drug’s cost. It is worth noting, however, that the total cost of healthcare (including premiums) for Plan 4 is actually the second lowest of the four example plans. Somewhat counterintuitively, a plan that does not cover the drugs you need might be less expensive, depending on the premium and other plan characteristics.

Formulary coverage and to which benefits the deductible does and does not apply are two easily overlooked aspects of health insurance design that shoppers need to be aware of when evaluating plans, but they need to be considered in combination premiums and other plan features to determine which will best meet your needs.

**Ideon is the company formerly known as Vericred. Vericred began operating as Ideon on May 18, 2022.**

 

This is the second of three posts on this subject

In this blog series for Diabetes Awareness month, we are exploring how the medications used to treat diabetes are covered by ACA health insurance plans. In our last post, we showed that many plans exclude entire classes of diabetes medication. In this post, we will explore the prevalence of prior authorization requirements with a focus on insulin.

Prior authorization is a tool that formularies can use to control access to certain medications. Although drugs with a prior authorization requirement are covered, providers are often hesitant to go through the approval process. From a patient perspective, this can be similar to the drug not being covered. The data science team at Vericred investigated the coverage for diabetes medications under ACA small group and individual plans to see how often they are subjected to prior authorization requirements.

The results show that prior authorization requirements are quite common. The majority of plans require it for at least one of the 53 diabetes medications studied. All nine medications in the insulin class require prior authorization from at least some plans. Individual plans are more likely to require it than are small group plans. The most striking example of this is Apidra – 37% of the individual plans that cover this drug require prior authorization compared to an 8% of small group plans.

Consumers with diabetes and employers shopping for insurance plans need to look carefully at the formulary information for the plans they are considering. Even if a drug is covered, some plans place additional requirements like prior authorization that can limit access to certain medications.

**Ideon is the company formerly known as Vericred. Vericred began operating as Ideon on May 18, 2022.**

 

This is the first of three posts on this subject

Diabetes is one of the most common diseases in the United States as well as a leading cause of death. It affects nearly 10% of Americans, and its prevalence has been steadily increasing over the past several decades. Treatment for diabetes is complicated, often requiring several medications. In this Diabetes Awareness month series, we will explore characteristics of how the medications used to treat it are covered by ACA health insurance plans.

Vericred’s data science team investigated how 53 diabetes medications broken into 17 different classes based on their mechanisms of action are covered by small group and individual health plans. The results show that insulin along with biguanides (e.g., metformin) and sulfonylureas (e.g., glipizide), two of the oldest drug classes used to treat diabetes, have at least one member drug covered by every small group and individual plan. The remaining 14 of 17 drug classes are excluded entirely by at least some plans.* About two thirds of small group and individual plans have at least one class for which they do not cover any drugs. Individual plans are more likely than small group plans to exclude medication classes; 45% of individual plans exclude three or more classes compared to 9% of small group plans.

Consumers with diabetes, and employers shopping for insurance plans, should consider their plan options carefully, as coverage options for diabetes drugs are can vary widely across plans. This is particularly important for those with diabetes already on medication—if a new plan does not cover any drug in the same class as their current medication, their costs will rise greatly or their treatment regimen will need to change.

**Ideon is the company formerly known as Vericred. Vericred began operating as Ideon on May 18, 2022.**

In our last series of blog posts, we showed that health insurance carriers are becoming increasingly more likely to offer generous benefits for urgent care compared to the emergency room. While urgent care was conceived as a more convenient and lower cost alternative to the emergency room, it is also being used as an alternative to primary care—particularly, as a recent survey shows, by millennials. In this Veristat post, we will investigate cost sharing for urgent care compared to primary care.

The data science team at Vericred analyzed the benefit designs for health insurance plans on the individual and small group ACA markets to study the difference in how the costs for primary care and urgent care are split between individuals and their health insurance companies. The results show that for both primary care and urgent care, most silver and gold plans share the cost before the deductible, while most bronze plans do not. For all three metal levels, primary care is somewhat more likely to be covered before the deductible than is urgent care. This difference is larger for bronze plans than for silver and gold and larger for the individual market than the small group market. Across all three metal levels, the most common type of cost sharing for both benefits is a copay regardless of whether the deductible has been met; on the individual market, the median copays are $30 for primary care and $75 for urgent care.

While cost sharing is somewhat more generous for primary care than urgent care, there is a much smaller difference between these benefits than we previously found for urgent care vs. the emergency room. The way health insurance carriers structure their benefits influences the way their beneficiaries use the healthcare system. It is worth asking whether the difference between cost sharing for primary care and urgent care is slight enough to reinforce the growing shift towards urgent care as an alternative to having a regular doctor. While urgent care has some advantages, including extended hours for patients who may be unable to take time off work, using it as an alternative to a regular doctor leads to a more fragmented pattern of care. Health insurance carriers should consider how their benefit structures incentivize beneficiaries’ behaviors and how these behaviors will affect health.

**Ideon is the company formerly known as Vericred. Vericred began operating as Ideon on May 18, 2022.**

This is the third of three posts on this subject

In our last post, we showed that the cost sharing for urgent care tends to be more generous than the cost sharing for emergency room visits. In this post, we investigate how that difference in cost sharing between emergency rooms and urgent care has changed over time.

The data science team at Vericred analyzed the benefit designs for health insurance plans on the individual and small group ACA markets from 2015 to 2018 to see the how the difference in the way the costs for emergency room and urgent care are split between individuals and their health insurance companies has changed over time. The results show that over the past few years, insurance companies have become increasingly more likely to share cost before the deductible for urgent care than for the emergency room. This difference in the cost sharing structure between emergency rooms and urgent care is increasing over time for both audiences and all metal levels.* Urgent care clinics have become increasingly common in the past few years, and insurance companies may be shifting increasing portions of the cost of emergency room visits onto consumers in order to restrain costs by encouraging a shift in usage away from emergency rooms and toward the lower cost urgent care clinics.

Consumers and policy makers should keep an eye out as the 2019 open enrollment period approaches to see how insurance companies continue to modify their benefits in this shifting dynamic between provider types.

* Platinum and catastrophic plans excluded. Catastrophic plans typically have a deductible equal to the out of pocket maximum, which removes cost-sharing variation. Platinum plans often have a $0 deductible, meaning there is no distinction between before and after the deductible.