Ways to Make Health Insurance Plans Better

Implement a “New Standard” for the Actuarial Value Calculator (AVC) – We should change the “basis” for the AVC from the “average per-capita (per-person) cost” of healthcare in the entire Country to either: 1) The “median per-person” cost of healthcare for Commercial-only plans, keeping Medicare, Medicaid and VA per-person costs out of the calculation.  Or, 2) A standard population as chosen by HHS, also excluding Medicare, Medicaid and VA per-person costs.

  • The result would be a 25%~30% “decrease” in AVC Health Plan Values from today.  It would mean that “all” deductibles and co-payments could decrease; and that very few plans would be subject to the Cadillac Plan Tax (currently delayed for 2 more years).  Basically, this does not change the “costs” of your health plan; however, it does mean that insurance companies would be able to offer you better health plans, with lower deductibles and lower co-payments on healthcare services.

“Separate” the Medical and Pharmacy Out-of-Pocket Maximum health plan expenses into two (2) separate categories, just like we do with Medicare today.  We could keep the same Out-of-Pocket maximums that are under PPACA; but instead of having them add together to one out-of-pocket maximum, we could have them add up separately.  For example, Medical expenses could add to no more than $3,000 per person; and Prescription drugs could add to no more than $3,000 per person, meaning the maximum would be $6,000 per person.  This would be similar to Medicare plans today!

  • There would be several results that could come out of this change, with the most important being that insurance companies would be able to sell people health plans that best fit their needs.  Basically, a person that has a lot of Medical expenses but very few Pharmacy expenses would be able to buy a health plan that keeps their out-of-pocket Medical expenses low while spending more on Prescriptions, and vice-versa.