VBID Center Examines Choosing the Right Health Plan

As Americans continue to struggle to afford their medical bills, and some newly insured under the Affordable Care Act find they can’t afford to use the coverage they purchased, finding the “right” health insurance plan is important.

The University of Michigan Center for Value-Based Insurance Design, led by A. Mark Fendrick, MD, director of the center and co-editor-in-chief of The American Journal of Managed Care, has released a new whiteboard video highlighting the benefits of a value-based insurance design (VBID) plan.

In the video, Goldilocks Choose a Health Plan, the titular character tries out a health plan that is “too soft,” which may cover many services, have a broad provider network, and include low cost-sharing, but also encourages wasteful spending and will be subject to the Cadillac tax. She also looks at a plan that is “too hard,” with high deductibles, narrow networks, and few covered services before the deductible and which could worsen health disparities and lead to adverse health outcomes.

The VBID plan ends up being “just right” by lowering cost-sharing for high-value services, discouraging use of services with no proven value, and an affordable price. Watch the full video from the VBID Center.

Recently, CMS announced that it would be holding a 5-year demonstration in 7 states of VBID in Medicare Advantage.

“The 5-year model will look, at the end, to see if lowering cost-sharing for high-value services and providers will meet the triple aim of better quality of care, better patient experience, and lower healthcare costs,” explained Dr Fendrick.

He also outlined that some of the hurdles that need to be overcome with the demonstration are concerns about who will enroll and if people understand and take advantage of the lower cost-sharing.