# Presentation: 297942

## Insurance Coverage of Vaccines

- Matthew M. Davis, MD, MAPP
- Assistant 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

## Slide 23

## 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