Obamacare Premiums Lower Than Expected

September 25th, 2013 No comments »

The Department of Health and Human Services has released data on the premiums for health plans in the state marketplaces/exchanges which come online in two weeks. The plans go into effect January 1, 2014. Premiums nationwide are around 16% lower than expected. About 95% of eligible uninsured live in states with lower than expected premiums. Click here for the full report.

 

Obesity and Obamacare: A Practical Guide

September 15th, 2013 No comments »

 

By our estimates, some 65 million Americans with obesity will be impacted by Obamacare. Many provisions of the Affordable Care Act, known as ‘Obamacare’are already in place. But October 1, 2013 will be a milestone as millions of uninsured Americans can start enrolling in health marketplaces (formerly called ‘exchanges”) for coverage starting next year. The law is complex and it’s no wonder most Americans don’t understand it. We’ve tried here to distill the basic information for consumers, especially those with obesity, who had problems getting or keeping insurance or getting reimbursement for obesity treatments.

Here’s where Obamacare will make a major impact:

56 Million Americans with group or individual insurance now have new security against exclusions for pre-existing conditions, rescissions of their contracts, rights to independent review of denied claims and new protections for employer wellness program abuses. They will also be eligible for intensive counseling for adult obesity.

5 Million Americans with obesity would come into the Medicaid program under Obamacare if all the states adopted it.

3.7 Million Americans with obesity are likely to enroll in health marketplace (exchanges) where they will be entitled to intensive behavioral counseling of obesity, and at least one prescription drug for obesity treatment.2

Here some FAQs to help navigate Obamacare:

Q. Does Obamacare affect me?

A.  Effective January 1, 1014, everyone must have health insurance or else be subject to a tax. For specific information, see this IRS page.

Q. Are there exemptions?

A. Yes. See the IRS page above. In addition, if you live in a state which has not elected to expand their Medicaid program you will be exempted from the individual mandate. Federal regulations treat this situation as a ‘hardship exemption from the individual mandate.

Medicare

Q. Does Obamacare change Medicare?

No. No one on Medicare needs to buy anything or answer any questions from callers. Because of the confusion around the law, scammers are calling folks asking for personal financial information on the basis that they are asking if they are qualifying for health insurance. Don’t believe them.

If you have Medicare the only change Obamacare makes is to shrink the prescription drug ‘donut hole.’ Supplemental insurance programs will not change.

Group or Individual Plans

Q. I have health insurance at work through a group plan. I’ve been told there will be no changes. Is that right?

A. Not really.  In the private insurance market, both group and individual plans, exclusions for pre-existing conditions will be banned, as will annual and lifetime caps on reimbursement.  All private insurance plans starting in 2014 must cover intensive behavioral counseling for obesity in adults. (That’s about 56 million people with obesity.) There are new rules giving you the right to appeal denials of claims to independent outside reviews. New rules on employer wellness plans gives employees rights to alternative avenues to benefits and puts your individual physician in charge of what is right for you. Other changes, as with the tax deduction for medical expenses and a future ‘Cadillac’ tax on expensive health plans are less positive for affected persons.

Q. I have health insurance at work through a group plan and we have been told the rates we pay for it will go through the roof because of Obamacare. Is that true?

A.  Health insurance premiums are going to vary by age, your state and what kind of plan you purchase and whether you qualify for federal subsidies. And they will vary by what strategies your firm takes. For example, some employers are moving full time workers to part time status; others are reducing family or dependent coverage. Recently, premiums have been fairly flat. A RAND study predicts small firms with under 100 employees will see a 6% reduction in 2016 health insurance premiums.

The Kaiser Family Foundation published a study of premium changes in 17 states and the District of Columbia, with and without the tax subsidies. Check it out here.

Q. What about rates if you buy individual health insurance?

A. A RAND study found little likelihood of big increases in premiums in the individual market but there are government subsidies for almost half the polulation. Forbes has published this map and information on what they project.  The Forbes’s site also has a calculator to see if you might be eligible for federal subsidy. Kaiser Health News has estimated that about 48% of adults already purchasing coverage for themselves will be eligible for subsidies next year and those subsidies will average $5,548 per family.

Kaiser Health News has provided detailed information on how the subsidies will work.

Uninsured

Q. I’m uninsured because it costs too much. What does Obamacare do to help?

A. If you make 133% of the federal poverty level or less,  you may qualify for Medicaid. If your income is 4 times the federal poverty level or less, you qualify for federal subsidies to make purchasing a private plan affordable. When you apply on a health marketplace (exchange) the system will automatically determine if you qualify for Medicaid in your state.

Q. My state won’t expand Medicaid so I won’t be eligible? Can I still get insurance through ObamaCare?

A. There seems to be a way but it’s a little tricky.

Q. When can I enroll in ObamaCare?

We’ll assume by ‘Obamacare’ you mean the state health marketplaces. You can start the paperwork now. October 1, 2013 the open enrollment starts. Sign up here.

Q. Am I eligible?

A. Nearly everyone is eligible. Go to this site.

Q. I need health insurance but don’t make much money. I am very healthy and active. Can’t I just wait until I’m sick and then get insurance from a health exchange?

A. That’s a risk. You can only enroll during open enrollment periods. If you need health insurance after one period closes, you will have to wait until the next open enrollment period to enroll. Any costs you incur then will be your responsibility. In addition, there is a (modest) tax for not having health insurance.

Q. What kind of health plans will be available?

A. There will four types of plans: bronze, silver, gold and platinum. Basically, with bronze, the premiums will be the least expensive but your out-of-pocket costs will be the highest. With platinum, it’s reversed: they will be the most expensive but your out-of-pocket costs are the lowest. They all have to provide “essential health benefits” but who provides and where will vary. More information is available here.

Q. What will be the premiums in the health marketplaces (exchanges)?

A. The Kaiser Family Foundation published a study of premium changes in 17 states and the District of Columbia, with and without the tax subsidies. Check it out here.  A similar analysis is available from Avalere Health here.

This site compares premiums inside and outside the marketplaces (exchanges),

Q. What are ‘essential health benefits’?

A. ‘Essential Health Benefits’ are specific types of health care services. Preventive services are one of the ten types and include intensive behavioral counseling for adult obesity. Plans will also have to have at least one drug from every therapeutic category. So one of the current FDA approved drugs for obesity should be available. Bariatric surgery may vary. However, the law contains very strong language that plans cannot discriminate in “benefit design” Read the federal regulations. This language should provide the legal justification for coverage of bariatric surgery.

Q. I’m still confused. Is there anyone in my state to help me?

A. For information on consumer assistance, see Families USA http://www.familiesusa.org/resources/resources-for-consumers/consumer-assistance-programs-resource-center/;

A State-by-State Map of consumer assistance resources is also available.

Q. I have family member who is not just obese but has some mental and other physical problems as well. She finds it hard to find services in her area and needs care across her problems. Any help?

A. One change to Medicaid in the ACA may be especially useful to persons in her situation. It creates an optional Medicaid benefit (Social Security Act §1945) for states to establish “Health Homes” to coordinate care for people with Medicaid who have chronic conditions. Health Homes are for people on Medicaid who have 2 or more chronic conditions, have one chronic condition and are at risk for a second, have one serious and persistent mental health condition. Chronic conditions include mental health, substance abuse, asthma, diabetes, heart disease and being overweight (BMI >25). Health Homes are intended to integrate and coordinate all primary, acute, behavioral health and long-term services in support of the whole person. More.

There is more information on these two government sites Healthcare.gov and CMS.

Footnotes

1. Decker, SL, Kostova D, Kenney GM, Long SK, Health Status, Risk Factors, and Medical Conditions Among Persons Enrolled in Medicaid vs Uninsured Low-Income Adults Potentially Eligible for Medicaid under the Affordable Care Act. JAMA, 2013; 309(24):2579-2586. http://www.ncbi.nlm.nih.gov/pubmed/23793267, accessed Sept. 13, 2013.

2. The Urban Institute, Health Status of Exchange Enrolees: Putting Rate Shock in Perspective http://www.urban.org/UploadedPDF/412859-Health-Status-of-Exchange-Enrollees-Putting-Rate-Shock-in-Perspective.pdf

 

 

 

ObamaCare Starts Now

August 22nd, 2013 No comments »

While the ‘exchanges’ will not be operational until October 1, individuals in 34 can now start the enrollment process by going to this site.

 

Reflections on the AMA Disease Decision – Part 1

July 3rd, 2013 No comments »

I think I have been responding to questions about whether or not obesity should be defined as a disease since the American Obesity Association’s (AOA) first Obesity and Public Policy Forum in 1999. It came up again with the petition filed by AOA with the Social Security Administration to have persons with severe obesity continued eligibility (with other criteria) for Social Security Disability in 2000.

At AOA, we drew attention to the policy of the Centers for Medicare and Medicaid Services (then called the Health Care Financing Administration) stating that obesity was not a disease in testimony March, 2000.

But it was really AOA’s effort to have obesity treatments treated as eligible for the medical deduction on income taxes under the Internal Revenue Code which brought national attention to the issue, including an interview on the Today Show with Katie Couric on November 11, 2003. After that, there were a host of call-in radio shows and interviews. “Obesity as a Disease” was a kind of Rorschach Test of Americans’ views about obesity. So, let me give you my take on the most common objections to the AMA decision.

Calling obesity a disease will increase stigma.” I got this several times in the early 2000s and recently on the HuffPost Live interview. Not to be too glib, but how much worse can it get? The fact is stigma has been attached to obesity since ancient times. Today, we know it begins at very young ages. ( See Latner and Stunkard, 2003, “Getting Worse: The Stigmatization of Obese Children.)Those who stigmatize persons with obesity don’t need to read about the AMA’s decision to get their prejudice. Nor will calling it a disease be likely to change their attitude. Where stigmatization may change, and for the better, is inside the health care community where stigmatization is widespread and largely unrecognized. This decision by the AMA is, hopefully, going to spur the medical community to reconsider its prejudice and bias. See statement of ASMBS. AMA House of Delegates Member for the American Society of Bariatric Physicians Ethan Lazarus said, “Classifying obesity as a disease will reduce weight bias. It means that medical students and residents will receive training in what obesity is and in the best treatment approaches. It means that the medical community will have incentive to research and develop new and better prevention and treatment strategies. But most importantly, it communicates to individuals affected by obesity that this is a chronic disease, not a problem of personal responsibility.”

For an account of what a medical student with obesity goes through, read this short but painful essay from Dr. Madjan, Memoirs of an Obese Physician.

Abigail C. Saguy does caution in TIME that classifying children with obesity as diseased, may result in their parents being accused of neglect or abuse, a la David Ludwig’s argument but that was taking place before the AMA’s resolution.

Obese People will drop Personal Responsibility. They won’t try to lose weight, saying, ‘I have a disease.’” Well, this deserves some parsing. If persons with obesity give up trying to lose weight, it isn’t for lack of trying. Surveys indicate that about half of all adult Americans are trying to lose weight every year. Overweight and obese Americans try harder. Most are trying to eat less and exercise more. Most fail. This comes as no surprise to researchers and clinicians who see an abundance of poor advice to consumers. In my opinion, in discussions about obesity, “personal responsibility” is the end of the conversation. In other diseases (or conditions, if you like) it is part of the conversation. In obesity, it is the conversation stopper.

If your dentist tells you ‘you have periodontal disease’, do you stop brushing your teeth or flossing? If you are told ‘you have a sexually transmitted disease’, do you go out on the town without protection? If you have been told ‘you have dangerously high cholesterol’, do you rush to the steak house? Well, maybe some do. But by and large, we have to assume that most patients are reasonable people and when told that they have a serious condition, they respond, well, like a reasonable person. After a heart attack, Bill Clinton goes on the Dean Ornish diet. Concerned about his weight (and maybe his Presidential prospects) Chris Christie has lap-band surgery. So, why do many people assume persons with obesity will act irrationally? Well, the short answer is bias. They assume persons with obesity are irrational and out of control. In other words, most of the objections based on the loss of ‘personal responsibility’ disguise stigmatization. They assume that persons with obesity will act irrationally and selfishly, even if they are talking about 1/3 of the adult population.

The AMA and physicians are declaring obesity a disease for the money. There are these new drugs out there and they can’t wait to write the prescriptions.” The AMA has had their chance with fen-phen, Meridia, Xenical, Alli, etc. Fact is, as documented on this site, most primary care physicians have a woeful record in understanding and treating their patients with obesity. They are not trained in obesity, they don’t understand the basic human physiology of weight regulation and they do not know how to counsel their patients. They have sat on the sidelines of this epidemic and have been comfortable being there. (To be fair, a lot of their patients do not raise their weight issues with their physicians either.) As one young physician told me years ago, “I didn’t go to medical school to treat fat people.”

Further, they have seen many of their colleagues wrapped up in the fen-phen litigation and want no part of that. The current drugs (and, I believe, future obesity drugs approved by the FDA) are not allowed to be dispensed out of physician offices. So they can’t make money out of direct dispensing. This is what fueled the phen-fen mills of the late 1990s. Physician counseling of patients will probably be billed as under “E&M” or “Evaluation and Management” codes which typically are reimbursed a lesser amount than procedures.  If physicians make any money on it (and it won’t be much) they will have earned it. The Pay-for-Performance trend in health insurance reimbursement may also cool physician interest in getting involved in obesity counseling.

“The AMA decision is ok but it’s not about (fill in the blank)!” This usually comes from folks not in clinical care of actual patients, i.e. they are concerned about community prevention efforts, the built environment, blaming the food industry, Western culture, etc. They feel left out of the discussion. They begrudge the focus on treating individuals and try to shift the conversation to where the spotlight shines on their area of concern. Know what? It’s a big world. Don’t begrudge the people who are trying to help individuals with their personal issues.

“The AMA overruled the finding of their expert committee that obesity is not a disease.” The report of the Committee on Science and Public Health was deeply flawed. First, it found that it could not define “disease”.  (See report (scroll down to page 19). The TOS Obesity is a Disease Writing Group actually got into this discussion in our evidence paper. Can you imagine what kind of criticism the AMA would have received if they said they could define ‘disease’?  Second, CSPH said it could not define “obesity” because the most common measurement too, the Body Mass Index, is flawed. Readers of this site will know that argument.  But the definition of obesity is “excess adipose tissue.” The BMI is only one of several measurement tools. Others include DEXA, bioimpedance, skinfold thickness test, waist-hip ratio, etc. Unfortunately, the Food and Drug Administration has made it into a clinical tool, not an epidemiological tool, as it was intended. There is a great deal of research underway to improve the BMI or create a better clinical instrument, such as the Edmonton Obesity Staging System or the Body Adiposity Index.

But many diseases have weak measurements. What about autism spectrum disorders? Alzheimer’s disease can only be diagnosed on autopsy. Most neurological, mental or substance disorders are very subjective but that does not stop us from classifying them as diseases.

“Obesity can’t be a disease since it can easily be prevented.” What we have here is a very common leap from the question, “Is obesity a disease?” to prevention or treatment issues.   The fact is that, no matter how weak the definitions of “disease” are, obesity meets all of them. (See my article in American Heart Journal). While I respect the arguments about the ambiguity of the definition of “disease,” I have to observe that it seems that no one gets very concerned about it until the subject of obesity comes up. Only then, do the Defenders of the Purity of the Definition of Disease arise to declare obesity “INELIGIBLE!”  In any event, if one stays just with the extant, secular definitions of disease, as commonly used, I think one has to admit that obesity meets commonly used terminology.

To address this specific objection, there are a number of diseases which are preventable. Not all diseases are caused by infections or toxins.  Probably the most prominent are sexually transmitted diseases, including HIV/AIDs. Others include, for example, scurvy, beriberi, rickets, pellagra are diseases caused by vitamins deficiencies. Does this mean that they are not diseases? If polio, smallpox and tuberculosis are eradicated, do they lose the ‘disease’ designation? Melanoma (skin cancer) can be prevented by relatively simple measures, e.g. sun screen, wearing hats, long sleeve shirts, etc. But we don’t stop calling melanoma a disease.

If obesity is a major risk factor for type 2 diabetes and cardiovascular disease, and obesity is not a disease because it can be prevented, does it not follow that obesity-induced type 2 diabetes and cardiovascular disease are not diseases either?

Most the comments taking this approach assume that obesity is easily preventable. Is it? A recent review by AHRQ shows that current prevention strategies have little or no evidence of effectiveness. A 2011 AHRQ review found that behavioral intervention for weight loss averaged loss of about 3 kg or 6.6 pounds, far below the excess weight most adult Americans are carrying.

Insurance companies roll over and start paying for obesity treatments?” Well, maybe. Insurers still exclude certain diseases and treatments. They will certainly be looking for evidence of safety and effectiveness, particularly for the newer drugs, in broader distribution. There is certainly some momentum for greater coverage. However, obesity treatments are not considered “essential health benefits” under the Affordable Care Act. So greater insurance coverage here may be limited

Realistically, the AMA decision is not the parting of the Red Sea. For all the years that the evidence of the scope and virulence of the obesity epidemic has been developing, the AMA has largely sat on the sidelines. Don’t forget, they have not changed their policy that persons with severe obesity who cannot work should not be eligible for disability support. The AMA has mumbled about obesity as a lifestyle factor, condition, or risk factor. Now, it has put down a marker for the medical community: ‘Obesity is a disease. These are our patients. Get to work.’ With this decision, the House of Medicine, aka “the Mothership”, has moved obesity from the back door to the front window. Good for them. Good for us.

 

Final Rand Report on Employer Wellness Now Available

June 13th, 2013 No comments »

The final Rand Inc. report on Workplace Wellness Programs is now out. The report was mandated by Congress and provided to the Departments of Labor and Health and Human Services. It was leaked to Reuters shortly before finalization of the Administration’s regulations implementing the employer wellness provisions of the Affordable Care Act.

The report is just as negative on wellness programs as Reuters reported. The Rand Research Report is based on a review of the scientific and trade literature, a national survey of employers with at least 50 employees, statistical analysis of health plan claims and wellness program data from several employers. Five case studies round out the report.

The study found that nearly 80% of employers offer nutrition and weight activities, such as Weight Watchers group meetings, weight loss competitions and personalized phone support from health coaches. However, uptake is poor. Fewer than half of employees undergo clinical screening or complete a health risk assessment. Of those identified for an intervention, less than one-fifth choose to participate. For weight and obesity programs, the participation rate is 10%.

The researchers found that, “one year participation in a weight control program is significantly associated with a reduction in body mass index (BMI)(kg/m2) of about 0.15 in the same year, and the effect persists for two subsequent years. As illustrated in Figure S.4, this change in the first three years corresponds to a weight loss of about 0.9 pound in an average woman of 165 pounds and five feet four inches in height, or about one pound in an average man of 195 pounds and five feet nine inches in height.” The researchers note that an average non-participant would see an increase in BMI of approximately 0.5. (Of course, the fourth year data is much worse.)

The Rand report goes on to observe that employers overwhelming expressed confidence that workplace wellness programs reduce medical costs, absenteeism and health-related productivity losses. “But,” states the authors, “at the same time,” only about half stated that they have evaluated program impacts formally an only 2 percent reported actual savings estimates…Our statistical analyses suggest that participation in a wellness program over five years is associated with a trend toward lower health care costs and decreasing health care use. We estimated the average annual difference to be $157, but the change is not statistically significant.”

The authors conclude, “Consistent with prior research, we find the lifestyle management as part of workplace wellness programs can reduce risk factors, such as smoking, and increase healthy behaviors, such as exercise.” They calculate that, compared to non-participants, continuous participation in weight control program for five years would result in a relative weight loss of 10 pounds in an average woman or 13 pounds in an average man.”

This is a rather meaningless calculation. “Continuous participation” assumes continuous motivation, no plateaus and no rebound. Not likely. No where do the authors indicate a familiarity with the well-established physiological propensity for weight regain after weight loss. (See, Weiss, EC, Galuska, DA, Kettel Khan L, et al, Weight regain in U.S. adults who experienced substantial weight loss, 1999-2002, Am J Prev Med 2007;33(1):34-40)

The accompanying figures indicate that employers pay an average of $188 incentive for participation in a program and $ 144 in a results-based program.

One interesting finding used the database of the Care Continuum Alliance, an industry association, and looked at exercise. It found that in the initial year, participation in the exercise program is associated with a significant increase in exercise activities of 0.15 days of at least 20 minutes exercise per week. But it falls off to 0.11 in the second year and has no effect thereafter.

Cite: Mattke, Soeren, Hangsheng Liu, John Caloyeras, Christina Y. Huang, Kristin R. Van Busum, Dmitry Khodyakov and Victoria Shier. Workplace Wellness Programs Study: Final Report. Santa Monica, CA: RAND Corporation, 2013. http://www.rand.org/pubs/research_reports/RR254. Also available in print form.

 

Safeway: Going for 0 and 2?

June 4th, 2013 No comments »

The Administration’s employer wellness regulations were a big loss to the Safeway company and its former chairman, Steve Burd who retired recently. As a matter of common knowledge, the amendments in the Affordable Care Act expanding the size of the reward/penalty available to employers was known as the Safeway Amendment. The ‘success’ of the Safeway experience with incentives was never verified. Nevertheless, Senate Republicans adopted his idea during the debate on health care reform and the Obama Administration embraced it as a sign of bipartisanship.  (I had a brief comment on Steve Burd’s legacy in the San Jose Mercury News.)

Now, it seems, according to Bloomberg.com, that Safeway Inc. is one of the grocery chains pushing back on another provision of the Affordable Care Act, that would require display of the calorie content of the foods they sell. The FDA is still trying to get out a final rule this year, according to Bloomberg. Evidently, Safeway’s desire for healthier employees does not extend to customers.

 

 

Administration Issues Improved Employer Wellness Regulations; Bigger Role for MDs; Opening for Drugs and Surgery?

May 30th, 2013 No comments »

The Obama Administration has finally issued final regulations on employer wellness programs. Not only are they a significant improvement over the proposed regulations issued last November, they may provide a window for getting employers to pay for obesity drugs and surgery for appropriate employees.

The regulations are a big setback for big business. The Chamber of Commerce had lobbied for stacking, i.e. a process whereby failing a tobacco biometric, a 50% penalty, could be stacked with obesity, a 30% penalty, to equal an 80% penalty. They didn’t get it.

Instead, the Administration (consisting of three Departments, Labor, Health and Human Services and Treasury) cleaned up their earlier draft and made it much easier for persons with obesity and others with disabilities or medical problems to qualify for the reward in wellness programs.

The final regulations have re-structured employer wellness programs which may make them easier to understand. There are two broad categories. The first is “participatory wellness programs” with which most people are familiar. They involve gym membership, classes and modest ‘everyone-gets-a-tee-shirt-rewards’ for participating. The other type (now “types”) have gotten the lion’s share of attention. They are called “health-contingent wellness programs” and, although they do not always say so, everyone (all employees) or those who fail a certain health biometric (like Body Mass Index) must participate. Previously, this was just one group. Now, the feds have broken them into two groups but both are still mandatory “health-contingent wellness programs.” The first category is now called “activity-only wellness programs.” The second category is called “outcome-based wellness programs.”

Both activity-only wellness programs and outcome-based wellness programs must ensure that their plan: is reasonably designed to promote health or prevent disease; has a reasonable chance of improving the health of, or preventing disease in, participating individuals, is not overtly burdensome; is not a subterfuge for discriminating based on a health factor, and is not overtly suspect in the method chosen to promote health or prevent disease.

Activity-only wellness program is one where the individual is required to perform or complete an activity related to a health factor in order to obtain a reward. They do not require an individual to attain or maintain a specific health outcome. Examples include walking, diet or exercise programs. Since some individuals may have difficulty in participating to achieve the award, these individuals must be given a reasonable opportunity to qualify for the reward.

A health-contingent outcome-based wellness program requires an individual to attain or maintain a specific health outcome (such as not smoking) in order to attain a reward. “Generally, these programs have two tiers: (a) a measurement, test, or screening as part of the initial standard and (b) a larger program that then targets individuals who do not met the initial standard with wellness activities. For individuals who do not attain or maintain the specific health outcome, compliance with an educational program or an activity may be offered as an alternative to achieve the same reward…Examples of outcome-based wellness programs include a program that tests individuals for specified medical conditions or risk factors (such as high cholesterol, high blood pressure, abnormal BMI, or high glucose level) and provides a reward to employees identified as within normal or healthy range (or at low risk for certain medical conditions), while requiring employees who are identified as outside the normal or healthy rand (or at risk) to take additional steps (such as meeting with a health coach, taking a health or fitness course, adhering to a health improvement action plan, or complying with a health care provider’s plan of care) to obtain the same reward.”

To meet these standards, health-contingent outcome-based wellness programs must offer a “reasonable alternative standard (or waiver of the otherwise applicable standard) to a broader group of individuals than is required for activity-only wellness programs. Specifically, for activity-only wellness programs, a reasonable alternative standard for obtaining the reward must be provided for any individual for whom, for that period, it is either unreasonably difficult due to a medical condition to meet the otherwise applicable standard, or for whom it is medically inadvisable to attempt to satisfy the otherwise applicable standard. For outcome-based wellness programs, which generally provide rewards based on whether an individual has attained a certain health outcome (such as a particular body mass index (BMI), cholesterol level, or non-smoking status, determined through a biometric screening or health risk assessment), a reasonable alternative standard must be provided to all individuals who do not meet the initial standard, to ensure that the program is reasonably designed to improve health and is not a subterfuge for underwriting or reducing benefits based on health status.”

Significantly, the final regulations declare, “The intention of the Departments in these final regulations is that, regardless of the type of wellness program, every individual participating in the program should be able to receive the full amount of any reward or incentive, regardless of any health factor.”

For health-contingent outcome-based wellness programs, the individual must have the opportunity to qualify at least once a year and the size of the reward/penalty cannot exceed 30% of the cost of the health insurance premium (50% in the case of smoking cessation programs). In addition, the program must be “reasonably designed to promote health or prevent disease” whether activity-only or outcome-based. The 2006 regulations and the 2012 proposed regulations described these programs as “experiments” which need not have a scientific record. I protested in my comments to the November 2012 proposed regulations that this made them human experiments subject to federal regulation which required at its core informed consent. So, they took out the language that they need not have a scientific record and about experiments. Instead, the preamble states, “a wellness program is reasonably designed if it has a reasonable chance of improving the health of, or preventing disease in, participating individuals, and is not overly burdensome, is not a subterfuge for discrimination based on a health factor and is not highly suspect in the method chosen to promote health or prevent disease. The determination of whether a health-contingent wellness program is reasonably designed is based on all the relevant facts and circumstances.”

(Query: If, as it appears, an employer weight wellness program can achieve a one pound loss a year for three years, does anyone know of a study showing that is enough to prevent disease or promote health? In any event, I am not convinced these not still human experiments without the federal regulatory protections.)

Significantly, the final regulations require that the outcome-based wellness programs must require a full-scale, larger wellness program as a reasonable alternative. It states, “This approach is intended to ensure that outcome-based programs are more than mere rewards in return for results in biometric screenings or responses to a health risk assessment, and are instead part of a larger wellness program designed to promote health and prevent disease, ensuring the program is not a subterfuge for discrimination or underwriting based on a health factor.”

A lot of the comments dealt with what would be considered a “reasonable alternative” and who would decide. The final regulations make it very clear and the employee and his or her doctor won.

First, the regulations state that:

  1. If the reasonable alternative is completion of an educational program, the plan must find such a program and make it available and pay for it;

  2. The time commitment required must be reasonable;

  3. If the reasonable alternative is a diet program, the plan is not required to pay for food but must pay for the cost of membership or participation fee; and,

  4. If the individual’s personal physician states that a plan is not medically appropriate for that individual, the plan or issuer must provide a reasonable alternative that accommodates the recommendations of the individual’s personal physician with regard to medical appropriatness.

Expounding on time commitment, the regulations go on to say that “requiring attendance nightly at a one-hour class would be unreasonable.”

Perhaps more importantly for the future of coverage of drugs for the treatment of obesity and bariatric surgery, the regulations go on to say, “The final rules retain the clarification of the proposed regulations and add an additional clarification that an individual’s personal physician can make recommendations regarding medical appropriateness that must be accommodated with respect to any plan standard (and is not limited to a situation in which a personal physician disagrees with the specific recommendations of an agent of the plan with respect to an individual).”  The regulations go on to note that these decisions are subject to external Federal review under 76 FR 37216 an plans may impose standard cost-sharing for medical items and services furnished in accordance with the physicians recommendations.

Thus, to my reading, an employee’s physician could recommend that the employee receive an anti-obesity pharmaceutical agent or bariatric surgery, if eligible. Review would take place by reviewers external to the employer and plan and normal deductible and co-payments for drugs or surgery could be required. We’ll have to wait and see how this works out.

Finally, the regulations address the issue of “What happens in year 2?” They note that smoking cessation may take may attempts and maintenance may be a perfectly good outcome. A physician’s recommendation of nicotine replacement therapy would constitute a reasonable alternative standard.

What the Departments are looking for are reasonable alternative standards “in light of the individual’s actual circumstances, as determined to be medically appropriate in the judgment of the individual’s personal physician…For example, if the initial standard is to achieve a BMI less than 30, the reasonable alternative for the individual cannot be to achieve a BMI of less than 31 on that same date. However,if the if initial standard is to achieve a BMI of less than 30,  a reasonable alternative standard for the individual could be to reduce the individual’s BMI by a small amount or a small percentage over a realistic period of time, such as within a year. Second, an individual must be given the opportunity to comply with the recommendations of the individual’s personal physician as a second reasonable alternative standard to meeting the reasonable alternative standard defined by the plan or issurer, but only if the physician joins in the request.

There is more to these regulations which we will be covering in future posts.

Employer Wellness, EEOC, Data Warehousing, Predictive Analytics

May 23rd, 2013 No comments »

Download my comments to the EEOC filed today looking at employer wellness programs and the development of data warehousing and predictive analytics. How new technology can be used to discriminated against persons with obesity. Morgan Downey_EEOC_Employer Wellness Comments