Insurance Coverage of Vaccines

Matthew M. Davis, MD, MAPPAssistant Professor

Pediatrics and Communicable Diseases,

Internal Medicine, and Public Policy;

Child Health Evaluation and Research (CHEAR) Unit,

University of Michigan

Divisions of General Pediatrics and General Internal Medicine, & Gerald R. Ford School of Public Policy, University of Michigan

                                                                                            

                  

Challenges for Insurance Coverage of Vaccines

• Scope– Who and how many children are potentially

affected?

• Why insurance coverage ≠ vaccine coverage– Public programs– Private insurance plans

• Opportunities to address the challenges– What more do we need to know?

When Insurance and Vaccines Weren’t Linked …

Polio vaccination drive in a school gym, Kansas, 1950s (courtesy of Bentley Historical Library)

When Insurance and Vaccines Weren’t Linked …

Polio vaccination drive in a school gym, Kansas, 1950s (courtesy of Bentley Historical Library)

Single vaccine efforts

Infancy of private health insurance plans

Little or no public insurance coverage

… To Linking Insurance and Vaccine Receipt

… To Linking Insurance and Vaccine Receipt

Multiple vaccines

Employer-sponsored plans as dominant source of health

insurance for children

National public insurance programs for children

(Medicaid and SCHIP)

What insurance coverage do children have?

Kaiser Family Foundation, 2004

# children

(millions)

% with private

insurance

% with public

insurance

% uninsured

Overall 77.6 61 27 12

Age

<1 yr

1-5 yrs

6-18 yrs

3.5

20.3

53.8

52

58

63

36

32

25

12

10

12

Public-Sector Vaccine Financing

• Federal funds– Vaccines for Children Program

• Covers vaccine purchase for:– Uninsured– Medicaid– Native American / Alaska Native– Underinsured, in federally qualified or rural

health centers

– Section 317• Vaccine purchase and system infrastructure

• State funds• Vaccine purchase and system infrastructure

Challenges to Public Insurance and Vaccines

• Patient access to Medicaid/VFC providers– Worse with states’ frozen and/or decreasing

reimbursement to providers

• Funding for public-sector vaccine purchase in face of rising vaccine costs– Increasing numbers of vaccines– Comparatively higher costs of newer vaccines– Timing of new recommendations vis-à-vis

government budget cycles

Underinsurance in Private Health Plans

• Definition: Child has insurance coverage, but benefits do not include coverage for all recommended vaccines

• Estimated to affect >10% of child enrollees in private plans (Institute of Medicine, 2004)

– Approximately 5 million children

• Known to promote fragmentation of care (Davis et al, Pediatrics 2003)

Etiologies of Underinsurance in Private Plans

• Trends in benefits and plan design

• Regulatory factors

• Employers’ benefit decision-making– Role of employees (proxies for children)

Trends in Therapeutic versus Preventive Benefits

• Traditional emphasis on coverage of therapeutic benefits

• Role of managed care – Initially higher likelihood of coverage for preventive services– With managed care backlash return to plans with fewer

restrictions and more emphasis on catastrophic coverage

• Failure to control rises in health care costs– Implementation of preventive care caps that limit coverage

for vaccines

New Trend: “Consumer-Driven” Health Plans

• High-deductible (≥$1000) health plans– “Give people the chance to say ‘no’ to themselves”

• Health savings accounts (HSAs)

• Increasing enrollment– Unclear implications for vaccinations

Regulatory Factors

• Legislative mandates for children’s vaccines

• VFC provision for underinsured children

Limits of State Vaccine Coverage Mandates

• “Self-insured” health plans– Employer (typically >500 employees) bears

financial risk– >50% of US employees enrolled in such plans

• Number of children enrolled not known

– Catastrophic > preventive coverage

• Employee Retirement Income Security Act (ERISA, 1974)– Federal statute– Self-insured plans exempt from state insurance

mandates

Provisions for the Underinsured under VFC

• VFC– Must receive vaccines at rural or federally qualified health

centers– Fragmentation of care– Challenging to verify underinsurance

• State-specific extensions of VFC– Depend on private provider participation– Challenging to verify underinsurance

• Employer awareness of VFC provisions– Employers not encouraged to cover more recent vaccines if

employees don’t complain about fragmented care

Benefit Decisions of Self-Insuring Employers

• Inadequate information about short-term return on investment for newly recommended vaccines– Costs more evident than benefits

• New vaccine recommendations contrast with other benefit considerations that are more expensive– Vaccines may be crowded off employers’ agenda

• Essential to benefits design: employees’ preferences– What are employees’ demands about children’s vaccines?

Addressing Challenges: Insurance and Vaccines

• Parents’ demand for childhood vaccine coverage

• Employers’ “buy-in” for newly recommended vaccines

• Effects of current trends in health plan benefit design

Parents’ Demand for Childhood Vaccines

• “Carrots”– Information campaigns about the benefits of new

vaccines, targeting parents• Will parents communicate demands for broader

coverage in private plans to employers and insurers?• If coverage not available, will parents seek public-sector

vaccines or pay out-of-pocket?

• “Sticks”– Daycare and school entry requirements

• Could requirements be implemented more broadly and more rapidly after new recommendations?

• Potentially hindered by vaccine shortages

Employers’ “Buy-in” for Childhood Vaccines

• Acknowledge and target employers’ economic interests– What are empiric data about productivity and absenteeism

related to childhood vaccine coverage?– What are employers’ incentives to design benefit plans that

prioritize prevention for children?

• Communicate with employers as a unique and influential constituency– Distinct from parents and providers– Influenced by consultants– Can the case be made for the importance and urgency of

coverage for newly recommended vaccines?

Effects of Current Health Plan Design Trends

• Consumer-directed health plans– What are immunization rates for children enrolled in high-

deductible health plans?– Do parents with high-deductible plans seek public-sector

vaccines rather than pay out of pocket, or forgo newer vaccines altogether?

– What are opportunities to encourage preventive care utilization in high-deductible plans?

• Preventive care caps– Within a family, whose preventive care gets priority – the

parent who needs a mammogram or the adolescent who is eligible for newly recommended vaccines (meningococcal conjugate, Tdap, HPV)?

Conclusions

• Insurance coverage likely an influential factor in undervaccination for US children– Uninsured and publicly insured – limited access to care and

to VFC providers in context of constrained public funds– Privately underinsured – benefit coverage not in step with

latest recommendations

• Opportunities to address underinsurance– Parents – employees– Employers’ decision-making– Effects of plan benefits and payment designs

Employees’ Preferences for Vaccine Coverage

• National sample of adults (potential employees)• Offered hypothetical scenario of plans that

differed only in vaccine coverage– $3 more per month to assure coverage of any newly

recommended vaccine(s) in the next year

Davis and Fant, 2005

Employees’ Preferences for Vaccine Coverage

• National sample of adults (potential employees)• Offered hypothetical scenario of plans that

differed only in vaccine coverage– $3 more per month to assure coverage of any newly

recommended vaccine(s) in the next year

• 79% of parents with children in household said they were willing to bear higher premiums to assure coverage of new vaccines

Davis and Fant, 2005

Employees’ Preferences for Vaccine Coverage

• National sample of adults (potential employees)• Offered hypothetical scenario of plans that

differed only in vaccine coverage– $3 more per month to assure coverage of any newly

recommended vaccine(s) in the next year

• 79% of parents with children in household said they were willing to bear higher premiums to assure coverage of new vaccines– Are such plans feasible?– Will employees indicate they want coverage like this?

Davis and Fant, 2005