Advocates' Guide to Implementing Value-Based Insurance Design
Value-based insurance design (VBID) is a health insurance model that holds promise for improving patients’ access to high-value care. High-value care is care that provides the best health results for a particular patient at the right price. Around the country, advocates working to improve the health outcomes and value that our health care system delivers are exploring ways to implement VBID.
This guide explains the federal and state policy options for expanding the adoption of value-based insurance in private health insurance. It also offers tips to advocates to help them ensure that VBID models are truly promoting patients’ access to high-value care, and are targeting the health care conditions of highest need within their state
Numerous studies have now documented how cost-sharing in health insurance leads individuals to reduce their use of care, including both clinically important and unnecessary care. This can have negative implications for patients and our health care system.
When consumers delay or avoid obtaining clinically important, high-value care it can lead to more serious and expensive health problems down the line. Improving patients’ access to and utilization of high-value care is a critical part of improving the overall value of our health care system.
VBID may be especially helpful for patients with chronic health conditions
VBID must be implemented carefully and include key consumer protections in order to be successful. Done well, value-based insurance design could improve timely access to high-value care for people with chronic conditions.
For example, under a VBID model, a health plan could eliminate cost-sharing for medications and doctor visits necessary to effectively manage chronic conditions, like diabetes, hypertension, asthma and high cholesterol. This investment in helping patients get this valuable care early and at no cost can help improve health outcomes for patients with these conditions and prevent more serious and costly complications in the future.
About half of all people in this country have at least one chronic condition. In order to successfully improve the health outcomes our health system produces for the dollars spent, it is paramount that health coverage promote access to the evidence-based care that these patients need to achieve optimal health.
How can you implement value-based insurance design through state or federal policy?
There are multiple state and federal policy options that advocates interested in seeing more health insurers offer VBID should consider. These include both legislative and administrative policies that could expand the adoption of VBID to more private health plans. VBID has garnered bipartisan support in the past and could attract diverse stakeholder allies in helping advance policies.
Federal legislation: Congress could pass legislation requiring that all health plans (including all private health plans, Medicaid, and Medicare) eliminate cost-sharing for a set of high-value services and medications to manage chronic conditions. This would build on the Affordable Care Act’s requirement that all health plans cover certain preventive services with no cost-sharing.
Federal regulation: Through regulation, the Department of Health and Human Services (HHS) could require that insurers participating in federally facilitated marketplaces offer a plan at every metal level that has low or no cost-sharing for high-value services and medications to manage chronic conditions.
State legislation: A state could pass legislation that requires Medicaid and private health plans in the state to eliminate cost-sharing for a set of services and medications to manage chronic conditions that are deemed high value.
Key Consideration: This requires that a state designate an entity responsible for making recommendations about what services should be available to patients without any cost-sharing on the patient’s part. This could be a state agency or a newly established state advisory body.
It is important that the entity responsible for developing such recommendations include clinical experts and consumer advocates, or seek robust input from these stakeholders through formal forums. This could include entities similar to the Institute for Clinical Economic Review, which is a nonprofit tasked with assessing the value of different medical treatments.
State-based marketplace policy options for implementing VBID
In many states that operate and govern their health insurance marketplace, the state-based marketplace can set requirements for qualified health plans (QHP) that go above and beyond the requirements under federal law. Advocates in these states could consider working directly with the governing body of their marketplace to pursue policies that encourage or require insurers to sell some qualified health plans (QHPs) that include VBID.
Qualified Health Plan (QHP) Requirements: A state-based marketplace could require insurers to offer at least one qualified health plan at every metal level that includes VBID. The marketplace could approach this policy in a number of ways, including:
Option 1: The marketplace could broadly require that health plans include VBID that reduces cost-sharing for high-value services, without specifying what clinical conditions or specific services insurers should target.
Option 2: The marketplace could specify the clinical conditions that plans are expected to target, but not the specific services that should qualify for reduced cost-sharing.
Option 3: The marketplace could specify the services and medications that should have low or no cost-sharing.
Key Considerations: Marketplaces could tailor VBID to target specific conditions that are highly prevalent or for which there are significant disparities in the state. Regardless of which option a marketplace chooses, it should set clear expectations that a health plan’s VBID should reduce cost-sharing for high-value services and should not require enrollees to complete certain activities in order to qualify for this reduced cost-sharing.
Standardized plans: A state-based marketplace could create standardized plans that have VBID elements, such as no or low cost-sharing for select services and medications to manage chronic conditions.
What are standardized plans? Qualified health plans at each metal level that a marketplace has designed by defining cost-sharing for different services and that insurers are required to sell on the marketplace. Because the marketplace has influence in designing cost-sharing in standardized plans, they can be leveraged as vehicle for ensuring all health insurers in a state offer a VBID product.
What states already have standardized plans? California, Connecticut, DC, Massachusetts, Oregon, New York, and Vermont have standardized plans that insurers are required to sell. The federal government has also created standardized plans for federally facilitated marketplaces, but insurers in these states are not required to offer these plans.
Do any standardized plans currently have VBID? No standardized plans currently have value-based insurance design.
Key Considerations: Marketplaces could design a standardized VBID plan that targets services and medications related to conditions that are highly prevalent or for which there are significant disparities in the state. One strength of incorporating VBID into standardized plans is that it ensures that all plans implement VBID in the same way. This could make it easier to develop educational tools to inform marketplace enrollees about how value-based insurance design works. It can also help ensure that VBID is being applied to benefits it in a consumer-friendly way based on clinical evidence.
Advocating for VBID
There are a number of strategies advocates could consider to advance policies that expand VBID:
Build coalition of supporters: Disease groups, health equity organizations, and public health groups could all be strong allies in helping advance policies to expand VBID. Health care providers, particularly primary care providers and specialist providers, could also be powerful additions to a coalition. They have firsthand insight into how cost-sharing prevents patients from getting needed care and limits their own ability to successfully improve patient health outcomes.
Connect insurance design and delivery reform: Many states are engaged in serious efforts to transform the way that care is delivered and the way that health care providers are paid. They’re doing this to give providers incentives to better coordinate care and improve health care outcomes, particularly for patients with chronic conditions.
In order for these efforts to be successful, patients need coverage that ensures that they can afford to visit their doctors and follow treatment recommendations to manage their condition. Connecting VBID to these larger aims could attract additional allies and garner more support from broader state officials.
Lift up consumer stories: Stories about how high cost-sharing has prevented real patients from getting the care they need to manage a chronic condition can bring to life the health consequences that poorly designed insurance can have.