Wednesday, December 19, 2018

Interesting: HIT vs Medicare

The other day, we received an email about HealthMarkets' recently published Medicare Advantage Costs Index. The Index seeks to "determine the average annual 2019 Medicare costs in each state." It was compiled from a number of pretty reliable sources (including government data), and its purpose is to compare different states' costs year-over-year.

For example:

"Nevada has the lowest costs, while Kansas has the largest decrease in costs from last year."

Score one for flyover country!

Anyway, this is outside my particular wheelhouse, so I asked co-blogger Mike for his take. He wondered "what changes in HIT apply for 2019, and what effect those changes have in their study."

Which seems a most cromulent point, no? After all, things change.

So I replied to Caroline Liller (who had sent us the original email) and asked her about this.

She graciously replied:

"Thanks for your interest! I can get more information from the HealthMarkets team regarding health information technology changes."

And so she did.

HealthMarkets CMO Michael Stahl replied:

The one year suspension of the HIT for 2019 is one of the direct causes of the results we’re seeing in our Medicare Advantage Costs Index. The suspension of the HIT is driving costs down overall, but especially premiums.

Without carriers having to pay the tax, they are instantly more profitable. With this new general competitive environment, carriers can deploy lower rates to gain market share, offer better benefits, lower deductibles and lower out of pocket expenses. Since there are many factors involved--not just the one year suspension of the tax--it’s too early to tell how rates will be affected in 2020

Imagine that: lower taxes = more profitability.

One wonders if that concept might be applied to other areas of the economy....

Mike adds:

"Notice your correspondent says (1) the HIT reduction instantly makes plans "more profitable" and at the same time (2) enables plans to lower rates. Not likely for both to happen at same time. Also, Aetna was able to continue its 2018 Medicare Advantage rates into 2019 - but did not lower them.

Interesting eh?


Thanks Caroline and Michael!
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