What Effect Do ICHRAs Have on Health Equity and Access?

ICHRAs offer a special opportunity for certain underserved populations to enhance their health.

Health equity. Access.

These terms are driving medical insurance markets today as carriers seek to identify new ways to provide care to underserved populations with different medical needs. Ethnicity, location, immigration status, language, family structure, and income all influence individuals' health, attitude toward medical care, ability to access services, and likelihood to understand and comply with a treatment plan.

Employers who sponsor group medical plans, particularly those with diverse employee base, often don't begin to account for these differences. And even when they are conscious, they'll typically find that each insurer has a strength in one or two areas, but no single insurer offers strong, accommodating programs for all employee subpopulations.

How do ICHRAs help? They empower each employee to choose the optimal insurer and plan, rather than leaving it to the employer to find the plan that delivers the best overall experience. The result: Better coverage and better health outcomes for each employee who takes the time to find the right plan.

As a refresher, an ICHRA is an employer-funded account from which employees can withdraw funds to pay for medical coverage that they purchase in their local nongroup market. It's an alternative to the more traditional employer-sponsored model in which the company selects several options, usually pays a percentage of each plan's premium, and actively manages the enrollment process.

Benefits

All insured plans offer Essential Health Benefits as prescribed by federal law. In addition, they incorporate state mandated-benefits (like coverage for infertility and autism-spectrum services) and may reflect emerging benefits (like acupuncture) in a competitive marketplace. These state mandates don't apply to self-insured group plans.

Employees shopping in the nongroup market can compare plans' benefit packages to find an insurer or specific plan that offers a benefit that they value. They may not have access to a mandated benefit if their group plan is self-insured (this funding arrangement preempts state mandates) or their group plan is written in their company's headquarters state (mandates are typically applied by the state in which the plan is sold, not where the employee lives).

Insurers who offer insured products typically don't vary their benefits too much beyond mandated services and market conditions. Auto manufacturers, landscapers, and auto-repair shops compete on innovation and additional services to attract more customers who'll pay more for the company's product. In contrast, an insurer that creates a better program to manage diabetes or ovarian cancer attracts high-claim patients who, by law, pay no more in premiums than their healthy neighbors.

That said, there are differences in benefits offered and benefits limits. For example, a patient recovering from a serious accident or musculoskeletal surgery may receive more of her preferred therapy if her plan offers a combined 40 visits for physical and occupational therapy, versus a limit of 20 per discipline. For a patient who today either pays out-of-pocket for services not covered by the plan or forgoes additional care due to plan limits, mining for benefit differences may make a difference in her physical and financial situation.

This information is readily available in plan documents, making it easy for patients to compare benefits.

Formularies

Each insurer offers a different pharmacy formulary (the drugs that it covers within each therapeutic class) and imposes different cost sharing on each plan. This information is available in plan documents. Information that's less available includes restrictions on access to covered prescription drugs. For example, it's common for insurers to deny authorization for expensive drugs until patients have tried less-expensive similar drugs within the therapeutic class (a process known as step therapy).

Employees with a specific condition aren't restricted to one insurer or two or three plans chosen by their insurer. They can shop for the plan that offers the best coverage for their (or a covered family member's) condition. And if they develop a condition during the year, they can factor in prescription-drug coverage when they choose their coverage for the following year.

Networks

Networks vary by insurer. In some markets (like my home area of Eastern Massachusetts), the largest regional insurers have nearly 100% overlap in their medical (but not behavioral-health) provider markets. But national insurers, who represent a small but growing market share, typically contract with a smaller network of providers. Typically, the difference has been the absence of small physician practices and comprehensive clinics/health centers that serve largely minority populations in urban areas.

Proximity to providers is one consideration. But others - like the ethnicity or language spoken by the provider - can influence whether patients access care and the degree to which they understand and follow a treatment regimen. This issue is acute in inner cities, where many patients prefer to receive care at their neighborhood clinic, not only because it's convenient, but also because the practice welcomes neighbors and accommodates cultural, language, and socio-economic characteristics.

Whether the competition is among local, regional, or national insurers, behavioral-health networks vary. Although insurers are making strides in this area (often prompted by tighter state access standards or employer demands) in building more comprehensive behavioral-health networks, there remains more variation than among medical networks.

Employees have much more control over the depth of their network and the availability of specific or local providers when they receive an ICHRA stipend and can choose from among local plans. They can easily determine whether a provider is in that plan’s network. These networks are dynamic, so workers with an ICHRA can shop the market each year to find their optimal plan. They don't possess this power when their employer offers one insurer's plans.

Special Programs

Each insurance market is distinct. Insurers constantly look for an edge in attracting healthy enrollees and minimizing the claims costs of existing members with complex conditions. Buyers with ICHRAs can shop for plans that offer more health incentives (a $150 annual fitness-club fee reimbursement versus a $300 benefit that covers fees for fitness clubs, youth sports, and entry fees for road races and triathlons).

Similarly, a patient with kidney disease may choose the plan that offers a better disease-management program with regular reminders to schedule care and 24/7 access to a clinician. [Yes, this benefit seems contradictory with a point above. Insurers must balance not attracting additional patients with an expensive condition with managing the conditions of members already enrolled. It's not a perfect science.]

Telemedicine

With the end of the pandemic, many insurers have pulled back on coverage for virtual care. That may be appropriate for acute conditions like sore throats, severe headaches, and severe abdominal and joint pain. But some plans differentiate by offering a robust telemedicine program for monitoring chronic conditions (like diabetes and sleep disorders) and behavioral-health counseling. These conditions require regular intervention, and many patients find it difficult to fit in-person visits and related travel into their personal schedules. A well-defined virtual-care program that allows patients to interact with doctors and other clinicians located anywhere - including far away if the patient lives in a "clinician desert" - holds the promise of better outcomes as defined by quality of life and claims costs.

Employees with an ICHRA can easily compare plans' telemedicine benefit for their specific conditions. Workers whose companies make plan decisions for them don't have this opportunity.

The Bottom Line

Employees must do more work to select medical coverage when their company doesn't sponsor a plan. They don't simply glance at open-enrollment materials and choose a plan from the company's limited menu. Instead, they must review dozens of plans typically offered by between three and six insurers to find the plan that works best for them. Along with this extra work comes the opportunity to choose a plan that best meets their - and their covered family members' - unique medical needs.

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The content of this column is informational only. It is not intended, nor should the reader construe the content, as legal advice. Please consult your personal legal, tax, or financial counsel for information about how this information applies to you or your entity.

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