President & CEO
Cheryl DeMars joined The Alliance in 1992, assuming several roles before becoming CEO in December 2006. Cheryl works with the Board of Directors and senior leadership team to establish the strategic direction of the cooperative.
Cheryl participates in a number of national and regional initiatives that align with The Alliance’s mission of controlling costs, improving quality and engaging individuals in their health. She serves on the Advisory Board of the Wisconsin Population Health Institute, the vice chair of the Wisconsin Health Information Organization (WHIO) and the board of the Wisconsin Collaborative for Healthcare Quality.
Prior to joining The Alliance, Cheryl was a program manager at Meriter Hospital in Madison. She earned a master’s degree in social work from the University of Wisconsin-Madison.
The Alliance believes it’s important for employers to stay up-to-date on health policy legislation – especially during an election year. And because health policy can be complicated, we invited experts from the American Benefits Council to give our members a high-level look at current (and future) health policy issues during our Oct. 8 webinar. The following article is a recap from that event. Click here to view the full recording.
Short-Term Legislative Look
Ilyse Schuman, Senior Vice President of Health Policy at American Benefits Council, began the presentation and explained that on Oct. 1, the House of Representatives passed a scaled-back COVID-19 stimulus bill, but that it won’t likely pass through the Senate. “The sides seem far apart on talks about COVID-19 stimulus relief and it is unlikely that there will be a bill passed that includes health policy provisions before the election.”
She then turned her attention to a hot-button item for employers: COBRA Subsidies. “Hopes for Congress passing legislation to shore up employer-sponsored health care and other health policy priorities before the election look unlikely.”
She explained that the original version of the House-passed HEROES Act in May would have provided a 100% subsidy of premiums for terminated workers enrolled in COBRA as well as assistance for furloughed workers remaining on their employer plans. However, the COBRA subsidies portion was stripped from the scaled-back stimulus bill the House passed on Oct. 1.
“In its place was a proposal that would make all workers receiving unemployment insurance automatically eligible for premium subsidies on the ACA exchanges. This could be seen as a troubling lack of broad support for employer-sponsored insurance.”
90% of voters support the federal government taking action to help those who have lost their job preserve their employer coverage. and the American Benefits Council will continue to fight for COBRA subsidies and also consider other policies to shore up employer-sponsored coverage during this public health crisis
Though supported by both sides of the aisle, a broader surprise billing clause was not included in either House-passed bills this year, and it’s clear there are still some disagreements on which approach to take in prohibiting surprise billing. However, it remains a high priority for the retiring Senate HELP Committee Chairman Lamar Alexander (R-TN) who helped create the Lower Health Care Costs Act which also included other measures like enhancing transparency and other provisions to improve quality and affordability.
“The Alliance provided testimony to the Senate which, along with that of many others, was used to develop the Lower Health Care Costs Act and we’re really pushing to get that across the finish line with Congress. This is a testament to employers and that your voice really matters,” said Schuman.
Additionally, there was a recent executive order by the White House to come up with a surprise billing legislative fix by the end of this year; they did not specify what action to take or when it would happen, so it is in the hands of Congress for now.
COVID-19 Testing and Vaccines
Schuman moved the discussion to focus on COVID-19 by stating frankly: “Even if there is a cure or vaccine for COVID-19 by the end of the year, it is unlikely to be administered on a widespread basis. Employers need to be planning for COVID-19 workplace strategies through 2021, effectively stepping into a public health role and widespread testing for public health surveillance.”
There are still many questions that remain unanswered, including the cost of vaccines and who pays for them. Schuman said it’s worth noting that the HEROES Act would have allowed $75 billion for testing and contact tracing.
Schuman also noted how the pandemic has fueled efforts to expand access to telehealth services. “A recent report by McKinsey estimates that up to $250 billion, or 20% of the current U.S. health care spend, could potentially be virtualized.”
Next, she expressed optimism that legislation geared toward telehealth will be passed soon. “Even if no telehealth legislation passes this Congress, it will certainly continue to be a focus in the next.”
The American Benefits Council will continue to urge Congress to increase employer access to telehealth and remove state barriers for those services.
Schuman then passed the presentation over to her colleague, Katy Johnson, Senior Counsel of Health Policy at American Benefits Council, to discuss items employers can expect to see in terms of regulatory health policy initiatives.
Johnson reminded viewers that the president issued an executive order focused on hospital price transparency in June of 2019, and explained the two main requirements for the provision:
- Plans and issuers would be required to provide an internet-based self-service tool for pre-service cost-sharing estimates. Those estimates need to be individual-specific and based on negotiated rates.
- Plans and issuers would make publicly available a machine-readable file of the negotiated rate of in-network providers for services under the plan, and also a list of the historical allowed amount covered under the plan.
She then explained that the proposed rules have garnered a lot of attention – both positive and negative. In fact, over 25,000 comments were filed on them. “Price transparency could be extremely valuable as a means to reduce health care costs, but at the same time there’s a number of rules that could be difficult to administer or potentially burdensome.” Johnson then noted that the proposed effective date for the rules will likely be one or two years for proper implementation.
She closed her remarks in regards to price transparency by stating that the rules were received for internal review by the White House of Office of Management and Budget on Sept. 11, which means that pending news is imminent.
Other Potential Guidance
Johnson said that employers are now allowed to send employees to the ACA exchange using tax-free money in an HRA – but there are a lot of stipulations attached to it. “Rules were proposed to help employers avoid an employer mandate penalty last fall, but we haven’t seen a final ruling yet.”
Another note she mentioned was that payments for Direct Primary Care arrangements are currently considered medical care, but in most cases “you are not eligible to receive HSA benefits in tandem with a Direct Primary Care arrangement.”
The Health Benefits Council is working hard on the congressional side to remove that barrier to Direct Primary Care for employers. They are also working to help individuals carry over their flexible-spending arrangements they were unable to use due to the pandemic into 2021 so people don’t forfeit the money they set aside.
The Affordable Care Act in the Supreme Court
Johnson closed her presentation by sharing news regarding the ACA and explained that a few weeks ago the Trump administration released the America-First Healthcare Plan, which supports coverage for pre-existing conditions, as the ACA – which currently covers pre-existing conditions – is being challenged in a case being heard by the Supreme Court on Nov. 10.
She then turned it back over to Schuman to explain the differences in each presidential candidate’s positions on major health care topics.
Cheryl DeMars, president and CEO of The Alliance, took the stage at Disrupt Madison to talk about how employers can join together to “disrupt” health care and create positive change. This speech was a prelude to the unveiling of The Alliance’s High-Value Health Care initiative at the cooperative’s annual meeting, and a call-to-action for employers to get involved to help change health care.
Have you watched the classic movie, The Wizard of Oz?
Then you probably remember Dorothy’s ruby slippers.
Do you remember what Glinda the Good Witch said to Dorothy about the slippers?
She said, “You’ve always had the power my dear. You just had to learn it for yourself.”
The Power Within Alliance Members
Dorothy trying to find her way home reminds me of employers trying to change health care. You have the power, you just have to learn it yourself.
The Alliance is a cooperative of 240 ruby-slipper wearing employers who are taking control of health care through self-funding.
In Baraboo, Wis., Flambeau opened its own health care clinic for employees. The clinic provides free care to employees many of whom were not getting routine preventive care. Over the course of the next five years, Flambeau’s health care costs rose less than one percent – not per year, but IN TOTAL – IN 5 YEARS.
In Westfield, Wis., Brakebush Brothers did even better. In 2014, they began self-funding their benefit plan, opened an on-site health care clinic and made other investments in employee well-being. Four years later, their health care costs are less than they were in 2014. Yes, that is correct - their health care costs went down.
The Alliance helps employers realize the power of their ruby slippers. And, together, we are making a difference in this market. Alliance members are moving their business to doctors and hospitals that provide good care and cost less. In the process, they are creating a market that recognizes and rewards better value – just like every other industry.
We invite you to join us – the more the merrier. Because after all, there’s no place like The Alliance . . . There’s no place like The Alliance . . . There’s no place like The Alliance.
The question of whether to expand Medicaid in Wisconsin has been the topic of a lot of discussion and debate. The debate often conflates issues of politics or philosophy with the economics of what expanding the Medicaid program would mean. We asked Donna Friedsam, Distinguished Researcher, with the University of Wisconsin Institute for Research on Poverty to provide us with an objective review of the data. The conclusion of the analysis is that Medicaid expansion will increase the number of insured people in Wisconsin and will bring additional funds to the state. What it won’t do is correct the market dynamic, which requires employers to band together and be willing to adopt more comprehensive actions to drive change. This is what we need to do in partnership together. Thanks, Donna, for providing this analysis!
How might Medicaid expansion affect private insurance premiums in Wisconsin?
A lot of confusion surrounds this debate about Medicaid expansion, and people argue variously about how it would affect insurance rates in the private commercial market. In recent months, Wisconsin-based studies seemed to show opposite results, which makes it hard to know what to think.
The weight of the evidence, however, is clear about two economic impacts:
Medicaid expansion in Wisconsin could lower premiums for those with private individual insurance in the Marketplace established under the Affordable Care Act.
A recent independent study published in the national journal Health Affairs summarizes the data. Another study, commissioned by the Wisconsin Office of the Commissioner of Insurance, also shows lower premiums in Medicaid expansion states. That report estimates that, under a Medicaid expansion, 25,000-30,000 Wisconsin residents currently enrolled in ACA Marketplace plans would become eligible for Medicaid. These lower income consumers tend to have higher health risk, and their transfer from the Marketplace to Medicaid improves the risk pool in the ACA Marketplace and may thereby reduce those premiums.
Those opposed to Medicaid expansion express concern about moving people from ACA Marketplace plans to Medicaid. Providers often argue that the commercial plans pay market rates to providers, while Medicaid’s low payment rates cause providers to “cost-shift” their underpayments to other private payers, thereby increasing premiums for others. Many economists and analysts, challenge the argument that provider prices reflect cost-shifting due to Medicaid underpayment expansion and that Medicaid expansion would increase insurance premiums. A study released in February by a Wisconsin-based group had argued that Medicaid cost-shifting would increase private insurance prices, but a review by two UW economists, population health experts and other economists and policy analysts, found that analysis had deviated from standard econometric practice, producing invalid results.
Medicaid expansion would reduce uncompensated care at hospitals.
Medicaid expansion would reduce the number of uninsured persons in Wisconsin by up to 40,000, reducing uncompensated care for health care providers. A study released by two UW economists in April 2019 shows that the Medicaid expansion could produce a net reduction in providers’ uncompensated care costs of as $100 million annually.
If provider prices are in fact driven by cost-shifting from payment shortfalls, a decrease in uncompensated care for providers should allow providers to reduce the prices they charge to payers and consumers. However it remains to be seen whether a reduction in uncompensated care burden for hospitals will actually translate to lower prices for the rest of the market.
In Wisconsin, and many other parts of the country, health care providers have market power such that they do not necessarily pass on cost reductions to payers. Indeed, even as providers voice concerns about underpayment by government payers, many Wisconsin hospitals and health systems report healthy and increasing margins, in aggregate posting about 10 percent margin for Wisconsin hospitals in 2017 and 5 percent margin for health systems. In the last two biennia, the Wisconsin state legislature allocated tens of millions of dollars to hospitals to help offset concerns about such cost-shifting from their reported Medicaid shortfalls. And hospitals and health systems experienced dramatic reductions in uncompensated care following implementation of the Affordable Care Act. The cost-shifting theory would hold that these developments should help relieve providers’ need to shift costs to private payers. Did payers experience those benefits?
Don’t people already have access to affordable coverage through the ACA?
Those opposed to Medicaid expansion have pointed out that federal subsidies on the ACA Marketplace make health plans available at very low premium prices for people with very low incomes. They cite plans available with 18-cent monthly premiums. It is true that ACA-subsidies available for low-income consumers may, in some cases, bring a resulting plan premium to near zero. But these near-zero premiums are not linked to Silver metal level plans through which low-income consumers qualify for cost-sharing reductions; By selecting a very low-cost Bronze plan, a consumer will remain exposed to substantial cost-sharing. As well, such low premium private Marketplace plans differ substantially from Medicaid coverage of behavioral health services, dental services, and services for working adults with disabilities, such that the low-income populations may not be able to afford such needed services.
Federal data for the 2019 open enrollment period show the following: Wisconsin consumers selecting Bronze plans pay, on average, a $67 monthly premium post-subsidy, and consumers selecting a Silver plan, for which they can qualify for cost-sharing reductions, pay an $88 monthly premium post-subsidy. Marketplace enrollment in the state has declined substantially over the past two years, particularly among those with incomes below 200 percent of the federal poverty level, raising concerns about affordability of coverage for this population.
The Bottom Line
Medicaid expansion can moderate health insurance premiums by improving the risk pool in the ACA individual market. Medicaid expansion would reduce the number of uninsured persons in Wisconsin by up to 40,000, reducing uncompensated care for health care providers. And it will bring in hundreds of millions in federal funds to pay for items in the state budget currently being supported by state tax revenue, as noted in Gov. Evers’ budget proposal and a memo from the Wisconsin Legislative Fiscal Bureau. But Medicaid expansion will not correct the market dynamics that result in high health care prices. The challenge of health care prices, and the broader challenge of high health insurance premiums for all purchasers, requires consideration of other, more comprehensive solutions.
On June 24, President Trump issued The Executive Order on Improving Price and Quality Transparency in American Healthcare to Put Patients First. This order includes sweeping provisions that could have a significant positive impact on one of the cornerstones of The Alliance: the availability of information to assess and compare the quality and price of health care services.
You might think that proposed state laws about insurance benefits won’t impact your self-funded benefit plan due to the federal ERISA law. Think again. State legislation is increasingly having an impact on self-funded benefit plans.
It’s time to tell Congress just how much employers care about repealing the Cadillac Tax. The Alliance recently joined a diverse group of organizations in signing a letter asking members of Congress to support legislation that will permanently repeal the Cadillac Tax. The bill is titled HR 748, the Middle Class Health Benefits Tax Repeal Act of 2019. Now, we’re asking Alliance members to write letters of their own supporting HR 748.