A term popularized during the buildup to the passage of the Affordable Care Act (ACA), it described the prescription drug coverage gap in Medicare Part D. Medicare beneficiaries faced a tiered co-insurance for prescription drugs: 100% for the first $310; 25% over this until $2,800; and then 100% of the cost over this amount until the yearly-cost exceeded $4,550 at which point the co-insurance percentage was nominal With the passage of the ACA, the donut hole was addressed by heavily discounting the costs of drugs in the coverage gap until 2020, when it will be gone.
Closure of the donut hole was one of several successes of the ACA; the major one being the reduction of the uninsured across the nation, including Michigan. Through a combination of Medicaid expansion and subsidized insurance products offered through the health exchange, Michigan’s uninsured rate has dropped according the U.S. Census with 249,000 more individuals gaining coverage in 2014 compared with 2013.
The assumption by many, including policy makers, was that the ACA would solve the problem of the uninsured. Unfortunately, there still remains a large percentage of the population which is not eligible for Medicaid (often making too much income) and find premiums on the health exchange unaffordable. This group is relegated to living without coverage and facing the penalty of not having coverage. This gap may be a new donut hole.
But an innovative community based coverage plan developed in Muskegon may provide a model to address this issue. Access Health began in 1999 as a community coverage plan and has transitioned to a hospital-community benefit program that also meets the minimum essential coverage requirements of the ACA.
In short, working at a community level, the coverage plan is funded by three key stakeholders: (1) program participants; (2) small businesses (often those with fewer than the 50 employees needed to require provision of health insurance); (3) hospitals, through their community-benefit obligation.
Some of the highlights of the plan include:
First-dollar coverage: Many of the plans offered through the health exchanges have significant deductibles often in the thousands before the insurance kicks in. Several studies have highlighted that patients often delay care as a result unless they believe their condition is truly “serious.” Access Health participants do not face such barriers to care.
Personal health coaches: Every participant in the plan is offered a personal health coach and their premium is discounted if they meet with one and develop personal health goals and plans. This augments the plan to address prevention and wellness rather than just providing access to a participant when they are ill. Jeff Fortenbacher, president and CEO of Access Health, says he has higher aims than just providing coverage for this vulnerable group: “Our real goal is to focus on population health,” improving the experience of patients while watching costs.
Leveraging Health IT: Despite it’s lean operation, Access Health uses a Health IT platform that includes following chronic conditions and risk analysis to monitor patients in a more timely fashion, rather than waiting until they are in crisis.
The benefit to individuals who obtain affordable, high-quality coverage is clear. For hospitals, the increasing number of high-deductible insurance plans has lead to an increase in their un-collectable bad debt.
Bad debt used to be attributed to the uninsured and the hope was that implementation of the ACA would significantly decrease it. As published by the Commonwealth Fund, 13 percent of privately insured adults have deductibles equal to 5 percent or more of their income.
In this environment, making an investment to provide coverage for a vulnerable portion of the community they serve makes absolute sense. Hospitals can assist in providing coverage that focuses on chronic conditions and prevention rather than taking care of uninsured patients in the emergency room where the care is fragmented, uncoordinated and, often, too late.
How about small businesses?
“There are plenty that cannot wait to get involved in this,” said Patti Kukula, principal advisor and founder of Macomb Health Plan informed me.
Ms. Kukula helped develop a similarly designed shared contribution plan in Detroit called Health Choice; she is hoping to develop a plan similar to Access Health in Macomb County. As an employer who has less than 50 employees is not required to offer health insurance, the cynic may wonder why a small business owner would want to make an investment in providing coverage.
The answer boils down to decreasing potential days lost to illness. An uninsured employee who becomes ill is still a strain on a small business owner who may not have the luxury of adequate staffing.
Beyond Macomb, six other counties in Michigan are eager to replicate a community plan similar to Access Health. A main barrier to achieving this is obtaining what is known as a Section 1332 Waiver (named for being in Section 1332 of the ACA) which is also called the State Innovation Waivers Program.
To move forward, the Michigan Legislature should work on a proposal to obtain the Section 1332 Waiver so local communities can work on obtaining coverage for this subset of the population by getting access to Federal ACA subsidies. For lawmakers, this should be an attractive option: local communities (employers, hospitals, and county health Departments) working together to develop high-quality health care coverage.