Health insurance

Unequal treatment: How health plans are confronting racial and ethnic disparities

A new report encourages large employers to support equity-focused programs — such as varying premium contributions based on salary — to potentially help reduce economic barriers to access among lower-wage workers.

A new report focused on ways health insurance plans can improve health equity in New York also includes ideas that can be applied in other states. “Leveling Up: A Role for Health Plans in Improving Health Equity in New York,” released by the New York City-based independent and nonprofit United Hospital Fund, provides numerous examples of interventions insurers are already taking (or can take) to improve health equity in New York and other states.

Among the areas in which companies might incorporate equity principles are procurement, benefit design, provider networks, utilization review, internal diversity programs, public reporting, data collection, and investments to meet capital and social needs of communities and enrollees.

“It’s been 20 years since the publication of the landmark Institute of Medicine report, ‘Unequal Treatment: Confronting Ethnic and Racial Disparities in Health Care,’ laid out the shameful inequities in our health care system,” UHF President and CEO Oxiris Barbot said in a statement. “The COVID pandemic made it painfully clear that scant progress has been made. It will take an all-hands-on-deck approach by all parties to bring about the structural change necessary to address social drivers of health. This report presents some important opportunities for health plans — which have a unique and vital role to play — as well as policymakers, regulators, and employers.”

As “Leveling Up” notes, “since 2000, according to the 2021 National Healthcare Quality and Disparities Report, disparities have narrowed for only about 8% of measures for American Indian and Alaska Native populations, 2% of measures for Asian populations, 3% for Black populations, 4% for Hispanic populations, and 10% for Native Hawaiian/Pacific Islander populations. More than 43% of quality measures were worse for Black groups in 2021, when compared to white groups, since 2000.”

Many—but not all—of the examples cited in the report grow out of Medicaid and Medicare rules, but employer-sponsored insurance plans can also address pressing needs. The most common public insurance initiatives identified in the report seek to address food insecurity and other social needs, most often through partnerships with community-based organizations.

Those examples include the following:

  • When BlueCross BlueShield insurers in western New York and Pennsylvania announced plans to affiliate in June 2020, state regulators made the agreement contingent on the combined companies committing $10 million toward improving racial and health inequities, the first time such an equity-based requirement was included.
  • A Massachusetts plan reports annually on its 20-year-old effort to improve supplier diversity and create a level playing field for potential vendors.
  • New York City- and Buffalo (N.Y.)-based plans support programs to train local residents in the skills they need to join the companies’ workforces.
  • California insurance regulators facilitate socially responsive investments by insurers.

The report encourages large employers to support equity-focused programs — such as varying premium contributions based on salary — to potentially help reduce economic barriers to access among lower-wage workers. It also argues that the collection of race and ethnicity data “still lags way behind what is needed to measure disparities or develop new value-based payment programs targeting equity,” adding that “without adequate data, inequities will remain unseen and unaddressed.

“In many ways, the task at hand is best described as ‘leveling up,” Peter Newell, UHF’s Patricia S. Levinson Fellow and author of the report, said in a statement. “It means encouraging plans to put their resources to work helping communities improve economic opportunity and address social needs, and working to transplant effective, equity-focused programs from one market segment to another, and from one health plan to others.”

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