recommendations for the Tennessee Health Insurance Exchange encourage
health plans and employers to establish expectations about personal
responsibility and engagement through benefit designs in the Exchange.
wellness program could provide some sort of "good driver discount" in
the form of a lower premium or other incentives to those enrollees who
satisfy these standards. Having the exchange plans offer these
incentives will make it easier for larger employers too!
Here is an excerpt from the "Best Alternatives to a Federal Insurance Exchange in Tennessee" published by the Tennessee Insurance Exchange Planning Initiative on October 21, 2011.
" Overview Stakeholders have emphasized that wellness is a
significant concern and the “on-boarding” of newly-insured enrollees offers an
opportunity to set expectations in this regard. The PPACA requires plans to
implement wellness programs and provide services that will encourage and enable
enrollees to improve their health status. PPACA also removes the ability of
issuers to consider the health status of people enrolling in health plans when
establishing premium rates. The law requires issuers to accept all eligible
applicants regardless of an individual’s health status. Wellness incentives and
rewards must comply with other federal rules related to nondiscrimination.
Options Available to Tennessee
If Tennessee operates the
exchange, the state would have the opportunity to emphasize the importance of
prevention and wellness by harnessing the power of market-based solutions.
Accordingly, the exchange may create incentives designed to support and coach
enrollees to maintain healthy lifestyles and take responsibility for their
The State of Tennessee recently
implemented a large, program-wide wellness incentive for the 200,000+ adults in
its public employee health plans. Beginning in 2011, the State offers a
"Partnership PPO" with a lower premium and low member cost-sharing --
but eligibility is predicated on the member's completion of a health
questionnaire, biometric screening, etc. Members who do not agree to the terms
of this "Partnership Promise" must enroll in the Standard PPO, which
has a higher premium and higher member cost-sharing.
In developing in the
Partnership Promise, the State conducted an exhaustive review of the scientific
literature, government reports, available unpublished manuscripts, and
materials from the National Business Group on Health and others. Though this
process, we were able to tailor an approach that we felt would be most likely
to succeed in our market.
Tennessee’s approach was
inspired in part by approaches akin to that described by Ian Ayres of Yale Law
School in his book, "Carrots and Sticks." He cites on example of
BeniComp, an Arkansas-based company, that has achieved renown for its wellness
BeniComp Advantage has caused a
stir in the group insurance industry by providing companies with plans that
lower an employee's deductible by hundreds of dollars each year if the employee
meets certain National Institutes of Health wellness goals. 'It's like a
good-driver discount for health insurance,' [BeniComp President Doug] Short
said. For example, in Benton County, Arkansas, the BeniComp plan came in and
raised health-care deductibles for county employees from $750 in 2004 to a
whopping $2,750 in 2005. But the employees can reduce their deductibles to as
low as $500 if they don't smoke, are not overweight (with a BMI of less than
24.9), and have low cholesterol (LDL under 160), low blood pressure (lower than
140/90), and low glucose (under 126).
In essence, the wellness
program could provide some sort of "good driver discount" in the form
of a lower premium or other incentives to reward enrollees who meet specific
health measurement criteria that are within their control. To comply with federal
non-discrimination requirements, though, there would need to be reasonable
alternatives to qualify for incentives for those enrollees for whom it is
unreasonably difficult or medically inadvisable to achieve the standards.
Specific options available to
the state to increase the utilization of wellness programs in exchange plans
- Provide incentives for health
plan issuers who develop innovative wellness programs; and/or
- Require QHPs to include in
their consumer publications and on-line plan materials detailed information
describing wellness program services and how the company protects the privacy
and personal health information of all program participants.
With respect to risk assessment
or questionnaires, stakeholders noted that consumers could confuse these with
medical underwriting practices (which the PPACA prohibits beginning in October 21, 2011
suggest that any health risk assessment process occur only after an individual
has enrolled in a plan. As a practical matter, such questionnaires should be at
least 30 days following the completion of enrollment in order to reduce
confusion among new members about enrollment, coverage and the new incentives.
Ensuring a Stable and
Wellness programs provide a
valuable opportunity for health plans to identify enrollees at risk for health
problems and work with enrollees to develop a patient-specific program for
achieving maximum health care results. A successful, market-based program will
not only improve the health of enrollees and prevent future complications among
those with chronic conditions, but will also encourage personal responsibility
and provide enrollees with the information they need to take control of their
personal health care.
The state will continue to work
with health care experts and behavioral economists to identify additional
program options that are compliant with federal requirements, and invites
stakeholder input to on wellness incentives in exchange plans."
Read the full white paper.