Mark Hall: Serendipitous Paths
Mark Hall, J.D., is a Professor of Law and Public Health at Wake Forest University. Mark is the author or editor of fifteen books and his work is often cited and used in anthologies and casebooks. His recent research interests include consumer-driven health care, doctor/patient trust, insurance regulation, and genetics. Mark’s SHARE project examines how Section 125 plans are used to reduce costs of health insurance in three states: Indiana, Massachusetts, and Missouri.
We talked to Mark about the potential for Section 125 plans, SHARE serendipity, and the addictive quality of Krispy Kreme donuts.
Your project is evaluating state approaches of using Section 125 plans to reduce health care costs. How did you become interested in these types of plans?
About ten years ago, health insurance agents told me about this nifty little gimmick called Section 125 plans. They said it would allow employees that didn’t have employer-sponsored coverage to buy their individual coverage pre-tax and the only requirement was some help from employers to set it up. This caught my interest, so I started down the path of learning more about Section 125 plans as part of studying small group market reforms.
Section 125 plans were an option ten years ago? I’ve only recently begun to hear about them.
Unfortunately, employers didn’t want to offer them and regulators discouraged it. They saw it as a way of getting out of providing employer paid premiums, or engaging in the phenomenon called list-billing. However, health insurance agents were eager to try to sell insurance through Section 125 plans. It’s a convenient way to sign people up with payroll deduction and get a 30-40% discount on out-of-pocket costs.
And are state legislatures now getting on board?
Yes. I pushed the idea with a North Carolina legislative committee. They liked the plan, but it was never enacted. Then, my co-author David Orentlicher was elected to the state house in Indiana, and he sent out an inquiry to all of his colleagues that basically said, “I am now in the legislature. Does anyone have any good ideas?” I pitched the idea of Section 125 plans to him and he liked it. He helped get it enacted in the form of a tax credit for adopting employers, as opposed to an employer mandate. Meanwhile, great minds think alike – the folks in Massachusetts came upon the same idea and included it as part of their comprehensive reforms.
There seems to be a lot of activity around Section 125 plans in a short period of time. You must have asked yourself about the impact?
Yes. After these initiatives were passed I had lunch with Orentlicher and a colleague from Massachusetts, and we discussed how someone needs to study the effects of Section 125 Plans. The SHARE Call for Proposals came out 6 weeks later.
Timing is everything.
Yes, that is how it all came together; it was sort of a serendipitous exposure to an idea, the development of the idea, presenting it in the right place, and finally, a coalescing of interests. Of course, now it is quite a hot idea and is being considered in a lot of pending state initiatives. It is an idea that has found its time, though it has been long in the making.
When so many health reforms die in state legislatures, how did Section 125 plans pass in Indiana and Missouri?
There is a certain logic by which you start with a fuller slate of proposals and things get whittled away because of cost or because of opposition groups. There are no real losers in Section 125 plans other than the federal treasury department. It seems like a reform idea that could quickly populate itself across the states if it has as few downsides as it initially appears to have.
Small employers seem hesitant to adopt Section 125 plans, but don’t they stand to benefit the most?
Yes, that is correct, and the purpose of the SHARE study is to find out more about the nature of their reluctance and how best to overcome it. The hope is that the reluctance is due to their focus on running their business. Without a dedicated employee benefits department, they may not have the resources to set up the plan. If it can be explained simply and implemented at low or no cost, perhaps they would be more willing. Or, as Missouri and Massachusetts have done, legislators could mandate that employers adopt these plans. Then, if the bar to compliance is low, maybe small employers will simply comply without a lot of fuss or pushback.
You are a professor of law and public health. How did you get into health services research?
I started out as a traditional law professor at Arizona State and then Wake Forest offered me an appointment split between the law school and the medical school. My RWJF health finance fellowship exposed me to the world of health services research, so I was primed to get involved in that world, but I didn’t know how to do empirical research. Fortunately, I landed in a medical school department with lots of excellent social science colleagues, who showed me the ropes.
Your move to Wake Forest brought you closer to Tennessee, where you grew up.
I grew up in Nashville, the epicenter of for-profit medicine. The trees and forest behind the park where I used to play as a youngster have all been torn down and replaced by the corporate headquarters of the Hospital Corporation of America. Now I live in Winston-Salem, N.C. It’s the corporate headquarters for the two leading causes of death: R.J. Reynolds and Krispy Kreme donuts – smoking and obesity.
Are you a fan of Krispy Kreme donuts?
I try to avoid them. The hot glaze donuts, when they come right out of the oven, are like your first taste of an addictive drug.
So what is your vice food, then?
I like potato chips. The more exotic the better - Chinese mustard, jalapeno and lime, you name it - anything. I mail order my Poore Brothers chips from this place in Arizona because they don’t distribute them here.
You are talking to a fellow potato chip lover. Fried potatoes in any form, actually. A while back the New York Times reviewed potato chips like they would review wine.
That is great, I need to get that, I am of that ilk. You found me out, I have never admitted this to anyone outside of my close circle of friends.