While financial uncertainties drove many Americans to rein in their consumption of health care services during the recession, the Patient Protection and Affordable Care Act will remove patient out-of-pocket costs for preventive care services under many plans beginning in 2011 and will drive an increase in the use of these services, according to consultancy Towers Watson.
“In this economic climate, many Americans have delayed or avoided visits to the doctor because they were concerned about the costs they might have to incur,” said Randall Abbott, a senior health care consultant with Towers Watson. “Now, covered individuals and their families will not face even nominal financial barriers to preventive care services.”
Many employer-provided health plans have promoted low-cost or no-cost preventive care for years, but the new law broadens the range of services covered and establishes a uniform standard for services grounded in the recommendations of the U.S. Preventive Services Task Force and other similar bodies.
Under the provision, insurers and self-funded health plans must cover regular wellness visits based on the patient’s age and gender as well as a range of recommended screenings. Additions to coverage for most employees and their families will include depression, supplemental pregnancy and screenings for HIV and other sexually transmitted diseases as well as HPV tests for females. It includes recommendations to take aspirin to prevent heart disease and fluorides for children.
“Historically, America’s health care system has been focused on the treatment of illness, and this provision is an essential first step to reframe the industry, proactively focusing on the preservation of health,” noted Harlan Levine, a physician and senior health care consultant with Towers Watson. “The legislation promotes free preventive care and emphasizes the importance of early detection and regular doctor visits in helping both adults and children stay healthy.”
Plans that are not considered grandfathered under the law must provide these benefits at 100 percent beginning in plan years starting on or after Sept. 23, 2010. For employer plans, this is commonly Jan. 1. Towers Watson expects that less than half of large employer health plans will retain grandfathered status because most will be making plan design and contribution changes that will exceed the limits permitted by the grandfathered plan rules.
Implementing the new preventive care benefits will, Towers Watson estimates, increase costs faced by insurers and employers by 1 to 2 percent. With an annual 2010 average per covered employee health cost of just over $10,000, this means that employers will see an increase of $100 to $200, which will be in addition to expected average annual cost increases of 8 to 10 percent.
Insurers and administrators will face the additional challenge of modifying their claim payment systems by Jan. 1, 2010, or establishing processing guidelines for their examiners. “Because there has not been a single standard for the administration of preventive benefits, many employers have taken it upon themselves to define these benefits,” said Greg Mansur, senior health care consultant with Towers Watson. “This adds to the complexity of implementation for many regional and national claim payers, and employers should really take the time not only to understand the impact on their plans but also to test their administrator’s capabilities before January 1.”
Stephen Miller is an online editor/manager for SHRM.
Increased Health Care Cost Shifting Expected in 2011, SHRM Online Benefits Discipline, June 2010
Brokers Say Group Health Rates Rising for 2011, SHRM Online Benefits Discipline, June 2010
SHRM Online Benefits Discipline
SHRM Online Health Care Reform web page