Community Health Plans Lowered Consumer Healthcare Spending in 2022

Alliance of Community Health Plan (ACHP) payers have secured lower healthcare spending for members in 2022 through premium adjustments, efforts related to prescription drug pricing, and more, according to an ACHP affordability report.

“Millions of people across the country are dealing with financial hardship, as inflation hovers at its highest level in more than 40 years and the nation attempts to move on from the greatest public health crisis of our time – the COVID-19 pandemic. Sadly, the high cost of medical care often compounds the problem for consumers,” the report began.

“ACHP and its member companies understand the stress health care costs can place on individuals and families, especially during a pandemic.”

In 2022, ACHP members focused on three primary strategies for lowering consumers’ healthcare spending: stabilizing prescription drug costs, lowering premiums, and empowering affordable decision-making.

The community health plan organization asserted that the Inflation Reduction Act of 2022 incorporated many of the drug pricing solutions for which ACHP has been advocating.

Apart from seeking federal interventions, ACHP payers incentivized the use of generics, promoted care coordination for members with chronic diseases and preventive care more broadly to reduce dependency on prescription drugs, and informed employers about how to achieve affordable pharmacy benefits.

These efforts bore fruit by reducing prescription drug spending. ACHP companies reported slightly less than a quarter of their premium dollar went toward prescription drugs. A separate AHIP report earlier in the year found that prescription drug spending accounted for 22.2 cents out of every premium dollar between 2018 and 2020.

Additionally, one ACHP company in Minnesota saw risk-adjusted pharmacy costs drop 20.3 percent below the average in the Midwest in 2022. The same company found that most of the drugs that the payer prescribed were generic treatments (93 percent).

In order to bring down the cost of prescription drugs, ACHP worked to reduce the Medicare Part B premium. The payer advocated against widespread use of Aduhelm and for CMS to reduce the Medicare Part B premium.

While prescription drug spending is certainly a major factor in high healthcare spending, it was not sufficient to lower prescription drug spending without addressing other factors. ACHP companies also worked toward lower premiums.

On the individual health insurance marketplace, the payers lowered their premiums or kept them stable from 2020 to 2022. In 2021, ACHP payers reduced silver plan premiums by, on average, 2.4 percent. This rate of reduction was 33 percent higher than the national rate of premium reduction.

Lastly, ACHP payers worked to retain their members in order to build trusting relationships with consumers that would blossom into better, more affordable healthcare decisions. Eleven ACHP plans retained nine out of ten of their Medicare Advantage members in 2022 and 16 ACHP plans retained eight out of ten Medicare Advantage members. This was a significant uptick from the 2013 to 2014 overall retention rate.

One ACHP health plan saved $13 million and paid out approximately $4.8 million in rewards to members because consumers used its price transparency tool. Non-ACHP health plans have also employed cost estimator tools to improve price transparency and reduce healthcare spending.

“High rates of retention mean plans and consumers can partner to improve health outcomes and reduce costs for both the individual and the system as a whole. The result is a virtuous cycle: retention means the plan has a deeper understanding of the patient’s needs. That leads to earlier, targeted interventions which foster better health and lower costs,” the report explained.

The payer organization emphasized that its consumer focus allowed its member health plans to improve healthcare costs during a time of economic strain.

“At a time when the dollar is being stretched thin for many Americans, affordability is a commitment our members take seriously,” Ceci Connolly, president and chief executive officer of ACHP, said in the press release. “We’ve seen the effects of the years-long pandemic on access to care – these ­­innovative, evidence-based solutions are indicative of ACHP members’ commitments to enhancing quality of care and improving health outcomes for consumers.”