New Health Benefit Designs Aim to Offer ‘Softer Landing’

Written by Leslie Small for aishealth.com.

With the COVID-19 pandemic ushering in significant economic uncertainty and consumer frustration mounting over rising health insurance deductibles, benefit designs that aim to give consumers more upfront value appear to be coming back into fashion.

Dave Fortosis, a senior vice president and health care consultant at Aon Hewitt, puts it this way: “There is interest in moving to something more affordable to the average American who is not sitting on a boatload of money.” To that end, companies competing for employers’ business are already rolling out options that seek to address such a need.

One notable example comes from a company called Gravie, which aims to disrupt the employer plan market with its “defined contribution model that allows employers to set a fixed budget each year and build a competitive benefits strategy around that budget.” For 2021, the firm is launching a product line called Gravie Comfort that “offers 100% coverage on most common healthcare services, including preventive care, primary care, specialist visits, labs and imaging, generic prescriptions, online care, and more — all at a cost comparable to most traditional group health plans,” according to a July 8 press release.

The tradeoff is that because consumers aren’t whittling away at a deductible throughout the year, when they need a less-common service or procedure — such as a knee surgery — they will likely face a higher upfront cost than they otherwise would, Gravie CEO and co-founder Marek Ciolko tells AIS Health. However, Gravie Comfort plans still have an out-of-pocket expense limit, he says, so they end up offering similar coverage as traditional plans when consumers face big-ticket expenses like a cancer diagnosis or a high-cost, unexpected surgery.

“We’ve got you covered for your daily stuff, we’ve got you covered for the major, major things that happen once in a while,” Ciolko says. “Maybe what we are saying is, as you get into these electives, that cost sharing is different, but at the same time that allows you to plan ahead for it.”

One thing that Gravie is not attempting to change, though, is the structure of health insurance networks. “We rent big national networks from existing players, so that gives us a very broad network of providers throughout the country,” Ciolko explains.

In Ciolko’s view, plans like Gravie’s help solve the problem of consumers feeling like they derive little value from their employer plans, as they pay higher and higher premiums but still face down a sky-high deductible when they try to access care. “This gives them [employers] an option where they say, ‘OK, premiums are expensive, but at least you get value from day one out of this plan,’” he says.

Rather than changing cost-sharing levels, Massachusetts-based health plan AllWays Health Partners and Newton-Wellesley Hospital (NWH) — both affiliated with the health system Mass General Brigham — are offering a new product that stands out because of its network. Beginning Oct. 1, 2020, the organizations are making a “high-performance network” plan called Allies available to employers in 65 select communities that are close to NWH. The idea is that Allies “will keep primary and specialty care in the community” by covering only NWH’s affiliated practices, and “members with more complex medical needs will have access to Mass General Brigham Hospitals, including Mass General Hospital and Brigham and Women’s Hospital,” stated a July 23 press release.

While typical narrow-network plans often cover the same service area as their broader-network counterparts and cut out some of the higher-cost hospitals in a bid to offer lower premiums, Allies takes a different approach, Steve Tringale, interim president of AllWays Health Partners, tells AIS Health.

“This product was built from the bottom up, and we built it with a focus on providing the highest quality care, and providing a significant level of access — and in fact improving access in terms of scheduling primary care visits and having affiliated specialists respond to the members of the Allies product as quickly and as smoothly as possible,” he says. “This network, while it’s not as big as our full-network product, is covering a limited service area, so when we look at the smaller service area, I would argue that what we have is a real high-performing network for a select group of employers.”

AllWays is careful to make it clear to employers that Allies isn’t a good option for their remote employees, as they won’t be able to easily access the plan’s in-network providers, Tringale notes. For that reason, the organization sells Allies products side-by-side with its broader-network offerings. Premiums for the narrower-network plans, however, will be significantly cheaper.

Aside from the different network, Allies is designed to mirror AllWays’ most popular plan designs, which have deductibles ranging from $1,000 to $3,000. But they also offer perks such as $0 cost sharing for minor members’ first three sick visits to a primary care provider and first three behavioral health visits, and “Care Complement” benefits that waive cost sharing for “alternatives to opioid painkillers and new treatments for managing chronic conditions.”

Meanwhile, a bigger player in the health insurance ecosystem — CVS Health Corp.-owned Aetna — is offering two new plan designs in 2021 that aim to ease cost concerns that may keep consumers from accessing needed care.

“Knowing our plan sponsors are under incredible stress with the ongoing global pandemic, we want to offer them and their employees an affordable plan — which makes it easy to access the services members need to get well and stay well,” an Aetna spokesperson tells AIS Health via email.

The Aetna Flexible Five Plan gives each plan member up to five no-cost in-network selected services, going beyond the $0 copay preventive care mandated by the Affordable Care Act. The other new plan design, Aetna Upfront Advantage, also offers selected services for no cost before members meet their deductible, “but it does so in terms of a customizable dollar amount,” the spokesperson explains. “These plans include multiple avenues for members to access care — including both in-person and virtual for both medical and behavioral health care.”

Deductibles for such plans range from $1,000 to $7,000, but consumers who choose them won’t qualify for a health savings account, as federal rules dictate that HSA-eligible plans can’t offer first-dollar coverage. For the same reason, Gravie Comfort plans also don’t qualify to be paired with an HSA, according to Ciolko. Recent research indicates that many high-deductible health plan enrollees either can’t access or choose not to contribute to HSAs, casting further doubts about whether HDHPs are very effective at encouraging consumers to be savvy health care consumers (HPW 7/27/20, p. 1).

Fortosis says he’s observed more employer interest in plans that have lower deductibles and set copays for certain types of office visits, such as $25 for a non-preventive primary care visit or $60 for a specialist. And to keep those plans from becoming unaffordable, employers are putting certain restrictions in place.

“For example, to keep the price reasonable, that plan might require you to identify your own primary care doctor at open enrollment, or it might have a much tighter prescription formulary, or it might require mandatory second opinions, or it might be going to a narrower network, which gives deeper discounts to the employer and yet less choice to the employee,” Fortosis says. AllWays’ new offering, he adds, harkens back to the HMOs that won and then lost favor among employers before HDHPs became widely popular.

Another idea that employers are increasingly considering is pay-based premiums that require smaller contributions from employees who earn less, he observes. In general, as Aon Hewitt’s large-employer clients look ahead to 2022 benefit changes — assuming that many furloughed and laid-off employees will return to the workforce — putting less burden on workers is a central theme, Fortosis says. “There is a very strong sense that our clients are trying to create a softer landing on plan design.”

Learn more about Gravie Comfort.