Delta (my favorite airline) isn’t forcing employees to get vaccinated.  It is charging the unvaxxed more for health insurance.

Ochsner Health system in Louisiana is following suit, adding the same surcharge for spouses or partners that are not vaxxed in an effort to help cover the $9 million in costs the system spent on caring for workers infected with COVID – and pay for future expenses. The unvaxxed will have to pay $200 more per month and comply with strict testing requirements.

Financial giant JPMorgan will charge unvaxxed employees more for health insurance as of January 1 2022.

Those who come down with COVID are also going to see higher out-of-pocket costs as more insurers pull back on the first-dollar coverage they were providing for COVID care. Average out-of-pocket costs around $3,800 are expected for unvaxxed patients hospitalized for COVID treatment.

While a lawsuit has been filed by some Ochsner employees seeking to overturn the surcharge, legal experts dismiss any chance of success. CMS has told self-insured employers they cannot refuse to provide coverage for unvaxxed patients’ COVID care, but they can charge those members more. This is consistent with regulations regarding tobacco use, which can result in insurance surcharges.

Meanwhile, many of Delta’s competitors are mandating vaccines, perhaps in part because unvaxxed workers mostly comply with mandates. And all the data to date indicates the vast majority of workers are getting the shot rather than the heave-ho.

One expert noted the surcharges are a powerful emotional tool, stating:

“There is this idea of loss aversion, that losses are weighed more heavily than gains, so a $200 incentive will not have as much influence as a $200 fine.”

What does this mean for you?

Unfortunately, sticks seem to be more effective than carrots, at least for the most committed of the vaccine holdouts.

Prior authorizations – aka 1-800 NURSE MAY I – are either an absolute necessity if you are a healthplan or a complete waste of time and money and affront to the medical profession if you’re a provider.

Of course, reality is somewhere in the middle.  Regardless, in what I will argue is due mostly to payers being dumb, a new law will strip most Texas payers of the ability to unilaterally set and enforce prior auth requirements.

As of September 1, Texas healthplans won’t be able to require prior authorization for certain treatments if 90 percent of the treating doc’s medical orders for those services over the last 6 months were deemed medically necessary by the insurer. The details are yet to be released; how this gets implemented, how insurers are supposed to track compliance, how the inevitable disagreements will be dealt with and all the other devilish details are TBD.

We do know that the “gold carding” of docs (the term used to describe docs who meet the 90% threshold for a healthplan or insurer) “only applies to payers that fall under the state’s jurisdiction and are not state funded.” It appears the law – HB 3549 – applies only to:

• HMOs,
• Medicaid plans, and
• PPOs and EPOs offered by health insurers.

Self-insured employers are exempt as they are regulaterd under ERISA and thus outside state jurisdiction.

I’ve long argued – and strongly suggested to consulting clients – that they stop requiring good docs to submit to prior auth requirements, instead monitoring them on the back end via smart data analysis.  The vast majority of procedures that do go thru the PA process are approved – and the process can delay treatment, costs treaters and healthplans money, and add to the general frustration with healthcare and insurers.

Docs argue that PAs are unnecessarily burdensome…but I give little credence to their arguments; if they weren’t prescribing too many opioids, doing unnecessary surgeries, requesting unneeded tests and MRIs, PAs would not be necessary.

Similarly, healthplans’ argument that “The use of prior authorization is relatively small — typically, less than 15%”[of medical care] is ludicrous – the cast majority of healthcare is routine, and 15% of all “healthcare” is a gigantic number of services/drugs/procedures/treatments.

Canaries were an early warning sign of bad air in coal mines; when they stopped singing and died, miners knew to get the heck out fast.

What does this mean for you?

This is the first of what we will see in many states, and should be a wake-up call to all payers – health, auto, workers’s comp alike.

There are two selfish reasons the US should send as many vaccines as possible to other countries.

Variants.  The more the virus reproduces, the greater the chance it produces a much deadlier and more transmissible version. Each person vaccinated lessens the chances this thing becomes more destructive and dangerous.  Reducing the virus’ ability to adapt and become more deadly is a very good thing.

Leadership. Increasing out country’s influence and “soft power” around the world makes it more likely other countries will support our goals and policies – and protect our interests. For the foreseeable future our main rival will be China; if developing countries see the US as an active partner, committed to helping them battle COVID, we will be in a stronger position than we are today.

Of course there are moral arguments as well; saving lives is always a compelling argument.

Then there’s the reality here – we have way more vaccine than we need, so the “cost” of sharing what we have is minimal.

What does this mean for you?

Risk management 101 – reducing risk is always better than dealing with the consequences.  

This is one of those times where doing the right thing has lots of benefits.