As summer temperatures soar, we at CHIR are seeking refuge from the heat indoors with some health policy reading. This month, we reviewed studies on ground ambulance rides and surprise medical bills, the ways health plan pricing mechanisms affect health disparities, and the impact of using auto-enrollment to achieve universal coverage.

Amin, K. et al. Ground Ambulance Rides and Potential for Surprise Billing, KFF. June 24, 2021

This brief outlines ambulance use and the share of ground ambulance rides with a potential for surprise bills following the passage of the No Surprises Act. 

What it Finds 

• Using data from the National Hospital Ambulatory Medical Care Survey to track ambulance use, researchers found that:
  • Ambulances transport ten percent (three million) of all privately insured people who visit emergency rooms; 
  • Local fire departments and other government agencies provided 62 percent of emergency ground ambulance rides in 2020;
  • Fifty-one percent of emergency and 39 percent of non-emergency ground ambulance rides contained an out-of-network charge for ambulatory services that could put privately insured patients at risk of receiving a surprise bill; and, 
  • In seven states (Washington, California, Florida, Colorado, Texas, Illinois, and Wisconsin), over two-thirds of emergency ambulance rides included an out-of-network charge for ambulatory services that could result in a surprise bill.
• Researchers assessed existing state laws aimed at regulating ground ambulance billing in Maryland, Colorado, Connecticut, Delaware, New York, and Texas. They argue that each of these state and local regulations do not adequately cover all types of ground ambulance rides, and require additional consideration, particularly regarding the billing practices of various ambulance providers and insurers, in order to fully protect patients.

Why it Matters

Although the No Surprises Act prohibits most surprise bills for emergency and non-emergency services where patients are treated by out-of-network providers, Congress did not include ground ambulances in the Act, in part because many are owned by, and provide a major revenue source for, local governments. However, this report demonstrates that state and local regulations are likely insufficient to protect patients from surprise bills stemming from ground ambulance rides. The data provided in this report should encourage members of Congress to extend the No Surprises Act to include ground ambulances if or when it revisits these issues.

Health Equity From an Actuarial Perspective: A Deeper Dive Into Health Plan Pricing Questions, American Academy of Actuaries. June 2021

This discussion brief reflects recent work from The American Academy of Actuaries Health Practice Council’s Health Equity Work Group, whose goal is to contribute to efforts to reduce health disparities and improve health equity. This brief is part of the first phase of the Work Group’s efforts. It raises questions of whether health plan pricing methodologies contribute to health disparities.

What it Finds 

• In this discussion brief, the Work Group explores whether actuarial methods of pricing plan benefits, developing premiums, and paying health plans contribute to health disparities among disadvantaged or underserved populations, or whether they may be helping to mitigate disparities. They find that:
  • Current methods of using experience data and methods for trending data forward to project future spending may not accurately reflect the health care needs of underserved populations. Because systemic barriers in accessing health care may depress utilization among these populations, that underutilization can be embedded in experience data and premiums.
  • The premium development process may not reflect the value of benefits for different populations, and may inadvertently foster inequity. By setting premiums based on the average value of benefits, consumers who have the most variation from the average may experience richer or leaner benefits relative to the premiums they pay.
    • When new health benefits are added to plans, they may not be tailored to better meet the needs of underserved populations to reduce health disparities.
  • Actuarial rating factors, such as geographic or industry factors, may affect health disparities. If marginalized populations are more likely to be clustered within the cohort used to develop rating factors, then these groups may be rated differently from other groups.
  • Risk adjustment models, which are often created using data that includes demographic characteristics, medical conditions, and other drivers of utilization, can reflect inequities in access to health care and may inadvertently perpetuate those inequities. Their findings can influence incentives to enroll various populations and to set plan payments in ways that may reinforce inequities in access to coverage.
  • Broad risk pooling may cause disadvantaged populations that have disparate access to high quality health care to subsidize premiums for enrollees who generally use higher-priced providers and services. 

Why it Matters

Health equity has become an increased area of focus for many stakeholders in the health policy community, particularly because the COVID-19 pandemic has emphasized the disparities in health outcomes between advantaged and disadvantaged populations. Looking at the issue from all angles is important, and this brief provides some valuable perspective for considering the impact of health insurance pricing on health disparities. It offers insurers and purchasers insight into the ways plan design can be reworked to benefit historically underserved communities. Hopefully the concerns posed here will spark further discussion and innovation on their behalf.

Blumberg, J. et al. How Auto-Enrollment Can Achieve Near-Universal Coverage: Policy and Implementation Issues, The Commonwealth Fund. June 10, 2021

In this report, researchers explore two auto-enrollment strategies and use the Urban Institute’s Health Insurance Policy Simulation Model to estimate their impact on coverage and on federal government spending in 2022.                                                  

What it Finds 

• Researchers present two approaches to implementing auto-enrollment measures. The first comprehensive approach auto-enrolls all legal U.S. residents, and the second more limited approach auto-enrolls only low-income earners who are eligible for fully subsidized coverage.
• Researchers argue that both strategies should be accompanied by a number of policies in order to work best, generally including:
  • Filling the Medicaid eligibility gap in the states that have not expanded eligibility to all those with incomes up to 138 percent of the federal poverty level;
  • Expanding income-related marketplace subsidies for premiums and out-of-pocket costs;
  • Eliminating the employer-sponsored insurance firewall; and,
  • Implementing a nationwide public insurance option.
• When implementing each auto-enrollment option in tandem with these complementary policy reforms, researchers found that:
  • Implementing the comprehensive strategy would reduce the uninsured by 24.6 million people at a cost of $139.5 billion to the federal government in 2022.
  • Implementing the limited auto-enrollment strategy would reduce the uninsured by 12.5 million people at a cost of $113.4 billion to the federal government in 2022.

Why it Matters

This report provides two models for achieving near-universal coverage using auto-enrollment, a strategy that has gained increased attention among stakeholders. The findings outlined here can inform arguments for or against this type of approach in future policy discussions.