'It'll Raise Premiums' Tends to Kill Fruitful Conversations About Benefit Design. We Can Do Better.

It’s still all mostly politics out there, with heat but no light when it comes to the topics that we’re focused on here. So most of the newsletter is deep thoughts on premiums and benefit design (exciting!). 

The plan is to take tomorrow off to mentally prepare myself for what is arguably the best rivalry in college hockey. Things that could disrupt that plan include the timely release of Minnesota’s 340B report or the announcement of an HHS secretary nomination. 

Otherwise, see you Monday.

One thing that I have learned in watching health care debates over the past many years is that one of the quickest ways to kill an idea is by suggesting that it will raise premiums. No one wants to be held responsible for premiums going up. No one. 

And that’s wholly understandable. The cost of health insurance has become more and more extreme, even as it has become less and less generous. According to KFF, it will cost almost $26,000 to insure the average family this year. 

Most of that cost falls on employers, though patients face their own issues with rising deductibles and other cost-sharing. It’s devastating, all around. 

And that’s made everyone really skittish every time payers warn that a given policy or intervention will raise premiums. If things are unacceptably bad right now, there is almost nothing that would justify making premiums worse, or so the logic goes. 

But to use “it’ll raise premiums” as a cudgel avoids a painful reality: the issue with health insurance is not entirely that it’s expensive. It’s that no one thinks they’re getting their money’s worth. 

I suspect that people would be happy to pay (or, if not “happy” then, perhaps, “accepting of”) higher premiums if they felt like they were getting more. The IRA’s $2,000 out-of-pocket cap, which would help limit the worst-case scenario for many Americans? That’s worth higher premiums. Payers are offering to ensure gene therapy coverage for a small, clear premium add-on, banking on the idea that a little extra protection will be worth it. 

That’s the headspace I was in when I read the results of a new poll from the Alliance for Aging Research, UsAgainstAlzheimer’s, and the Partnership to Fight Chronic Disease. 

The topline result was that nearly all Americans -- 89% -- thought that Medicare should immediately cover the cost of new Alzheimer’s medicines. (Right now, Alzheimer’s meds are covered under a clunky set of CMS requirements known as “coverage with evidence development.”)

But what was notable is that almost three-fourths of those surveyed said that they supported full coverage even if they had to pay $5 more to guarantee that benefit. 

In other words, people are OK with higher premiums if that means getting access to what they really want and need. It’s not premium increases that people hate. It’s the feeling that they’re paying more and getting less. 

I suspect that this applies in other areas, too. There are plenty of employers and states that are loudly complaining about obesity meds because they don’t want to raise premiums. But it’s possible that the beneficiaries are OK with that. They’d be getting something valuable in return. 

I get that there is a clear counterargument here: if you broke down and polled each individual component of the premium dollar, there’s probably public support for it, and the problem with premiums is in the aggregate. 

Still, that’s an argument worth having. There’s evidence that there are benefit design tweaks that Americans find an acceptable tradeoff with higher premiums, and we ought to elevate those discussions, not use “but it’ll raise premiums” as a debate-ending coup de grace.

• The best (but not the only!) answer to the question, “Why does the United States pay more for drugs?”, is that Americans get better, quicker access to more new medicines, which is both transformative if you’re a patient who needs that breakthrough and a source of added value. AEI’s Kirsten Axelsen spotlights that argument in a great BioSpace piece this week. 

• I get that it’s not particularly newsworthy to point out that hospitals buying physician practices raises prices without improving care. (Also: The sky is blue. Bears shit in the woods.) On the flip side, it’s still a common practice, so research like this new piece in the journal Health Economics is still worth shouting about. 

• I wrote on Tuesday about a new study showing how anti-nausea meds for cancer patients were facing all kinds of utilization management hurdles. Today comes an even bigger look at the topic from Medscape, which examined a spectrum of supportive care for cancer patients and found plenty of “nonsensical limits” on access.

Header image via Flickr user Pictures of Money.

Thanks for reading this far. I’m always flattered when folks share all or part of Cost Curve. All I ask is for a mention or tag. Bonus points if you can direct someone to the subscription page.