Small Business Benefit Solutions Blog

Next year your health insurance carrier will be taxed to find out which drugs, medical procedures, tests and treatments work best, but those costs are going to be passed onto you.

This little-known provision of the present administration’s health care reform law, was created to answer basic medical questions such as whether a new prescription drug advertised on TV really works better than an old generic costing much less.

But in the politically charged environment surrounding health care, medical effectiveness research is eyed with suspicion. Even former Vice Presidential candidate Sarah Palin labeled this effort “death panels”, expecting the findings to result in rationing of medical care for sick people.

Beginning in 2012, every health insurance policy will be taxed $1 to fund the agency, that fee doubles in 2013, then increases will be tied to inflation in subsequent years.

The federal government will change these fees directly to the insurance carriers who need little reason to increase policy premiums and will use this as more fuel for that fire.

The research is to be compiled by a new quasi-governmental agency created by Congress called the Patient-Centered Outcomes Research Institute.

However, concerns abound, and Kathryn Nix, a policy analyst for the conservative Heritage Foundation is just one of the voices speaking out.

“The more concerning thing is not the institute itself, but how the findings will be used in other areas,” Nix said. “Will they be used to make coverage determinations?”

But Dr. Joe Selby, a primary care doctor, medical researcher and director of the PCORI expects patients and doctors to make the decisions, not his organization,
“We are not a policy-making body. Our role is to make the evidence available.”

To whom, how and under what privacy protections are questions yet to be answered, but there is hope that some good will come of the data they compile.

Much of the medical research that doctors and consumers rely on now is financed by pharmaceutical companies and device manufacturers, who have a large stake in the outcome. Presently, a drug maker only has to show that their new medicine is more effective than a placebo, usually a sugar pill, and not a competitors product, to win government approval for marketing.

And Insurance companies say they expect to use the research and work with employers to fine-tune workplace health plans. But will this be a good thing or a bad thing for employees and their families, especially ones seeking regular care.

Health Plan Members could be steered to hospitals and doctors who follow the most effective treatment methods, but if they decide to use another facility or provider, they could face higher co-payments, similar to added charges they now pay for “non-preferred” drugs on their insurance plans.

And you though Health Care reform was supposed to make medical care cheaper and more readily available.

With this one of many taxes to come, is that eve really possible?

As you pour over your medical coverage options, call us at Small Business Benefit Solutions, LLC.  Let us examine what you have, what your using and how you’re using it to see if you have the right plan or if a better plan exists for you.