If your doctor wants to prescribe an extremely expensive drug, expect your insurer to look hard first at whether it works before agreeing to pay.
Health insurers are hunting for more ways to tame rising costs. Aside from looking at prescription drugs, they're also covering meal deliveries and even some housing costs to keep people healthy and out of expensive emergency rooms.
But those measures won't help with a bill that's just starting to come due: claims from the rapidly spreading coronavirus.
Matt Eyles, CEO of the trade association America’s Health Insurance Plans, spoke recently with The Associated Press about these challenges and other issues. The conversation has been edited for clarity and length.
Q: Will the coronavirus affect premiums down the road, or do insurers generally keep enough reserves to cover unexpected occurrences like this?
A: Insurers always keep reserves for unexpected circumstances. Usually that's one of the requirements under insurance laws. We will look at whether this is a short-term phenomenon or a longer-term impact. That will really determine what kind of impact it has on premiums.
Q: Insurers are expanding coverage of things like meals and some are experimenting with rent payments for homeless customers. How does this tie into medical care and costs?
A: There's a growing recognition that much of health outcomes are determined not by the direct medical care that people receive, but actually by other factors such as housing, access to transportation, food and nutrition. Providing someone with healthy food or making sure that they have a safe place to live can help improve their outcomes, reduce their costs and keep them out of the emergency room.
Q: The Affordable Care Act has expanded coverage to millions, but individual insurance has become unaffordable for many who don't qualify for government help with premiums. How can this be addressed?
A: We think there are a couple of straightforward policy solutions to reduce premiums. Being able to deduct health insurance premiums from your income would be helpful. Implementing a new government reinsurance program would push down subsidy costs and premium costs for individuals. And looking at other options, for example, to reduce the cost of prescription drugs would also help.
Q: Would a reinsurance program cover more higher-end costs, allowing insurers to lower coverage costs?
A: Right, lower premiums for everyone.
Q: What might insurers try next to control prescription drug costs, especially now that some medications can reach six figures in cost or top $1 million?
A: Many insurers are looking at how you only pay for those treatments that work, especially for those extraordinarily expensive, six-and-seven-figure priced medicines. It's not a cure-all for the high cost of prescription drugs. But for those products that are innovative and that potentially are cures, it's important that we look at how we pay for what works and not pay for what doesn't work.
Follow Tom Murphy on Twitter: @thpmurphy