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Why Broad Preventive Care Coverage Is Here to Stay

Even without a mandate, employers are unlikely to impose cost-sharing for preventive services

A doctor is examining a woman's neck.

​A September decision by Judge Reed O'Connor, a federal district judge in Texas, struck down part of the Affordable Care Act's (ACA's) preventive coverage mandate. But this ruling isn't likely to lead employers to impose co-insurance payments for certain preventive goods and services they are now bound to cover in full, health policy analysts say.

O'Connor ruled in Braidwood Management Inc. v. Becerra that it was unconstitutional under the ACA for the U.S. Preventive Services Task Force to require the vast majority of the country's health plans to provide no-cost preventive services. As of publication of this article, O'Connor had not issued a formal remedy or decided the scope of the ruling, which he could apply only to the plaintiffs who sued (a management services firm in Katy, Texas), or nationwide to most health plans. Either way, an appeal by the Biden administration is certain.

However, "I just don't see employers backing off [paying for preventive care coverage] even if they are allowed to," said Paul Fronstin, director of health benefits research at the nonprofit Employee Benefit Research Institute (EBRI) in Washington, D.C. "Most employers recognize the value of covering high-value services, and we are not talking big bucks here."

Although O'Connor's decision opens, at least theoretically, the opportunity for employers and insurers to shave some of their costs, Tim Jost, professor emeritus at Washington and Lee University School of Law in Lexington, Va., and a frequent contributor to the Commonwealth Fund's commentary on health policy, doesn't see Congress being eager to make people start paying for things that are now covered.

"I think it will be hard for any politician to run against preventive services," Jost said.

A representative of at least one insurer said they hadn't heard any of its employer customers discuss cutbacks on funding preventive services.

"It's not a trend we're seeing or even hearing about," said Debra J. Williams, chief sales and marketing officer at Blue Cross Blue Shield of Massachusetts. "Preventive care is crucial in our employer customers' strategy, and they want to make that path affordable and accessible. For example, the vast majority of our self-funded customers adopted our $0 co-pay strategy on virtual [telehealth] primary care."

Fronstin said the likely long appeals process around O'Connor's decision probably means very little, if anything, will change in the way preventive services are covered.

"Things are obviously in flux until we get more information from the court as to how far this goes," he said. "But just because employers are allowed to charge cost-sharing doesn't mean they will."

Endorsement for Status Quo

In October, shortly after O'Connor's decision, Fronstin and his EBRI colleagues conducted a pulse survey among 25 large employers that together represent 600,000 employees and 1.2 million covered lives. Among the results:

  • 80 percent of HR decision-makers who responded said they would continue to cover preventive services in full. This was true even if they were allowed to impose cost-sharing.
  • Only 8 percent would impose cost-sharing for at least some preventive services.
  • 12 percent responded, "It depends."

When EBRI asked respondents for reasons why they would continue to provide preventive services at no cost to members, a number said covering preventive services in full "incentivizes their use, promotes better health, prevents more serious conditions, is insignificant in costs and saves money in the long term."

Focusing on PrEP Costs

O'Connor's ruling also held that the plaintiff's religious beliefs had been violated under the Religious Freedom Restoration Act, given the plaintiff's religious objection to covering an HIV prevention medication known as pre-exposure prophylaxis (PrEP) for employees.

In a subsequent EBRI research brief, Fronstin and his colleagues found the cost on a per-patient basis of these drugs is relatively high at $13,814 per year, but that this is still a small part of a typical employer's overall health care spending.

"Because so few enrollees utilize PrEP medications (about 0.17 percent of all members), the total cost of these drugs accounts for only 0.41 percent of total spending" by employers on health care, the researchers found. "If, for example, employers imposed 20 percent cost-sharing on patients for PrEP drugs, employer spending would fall by less than one-tenth of 1 percent."

For other commonly used preventive screenings, savings that might be realized from introducing 20 percent cost-sharing—typical for nonpreventive care—were even smaller: Employers would save 0.11 percent from co-payments on breast cancer screenings and 0.15 percent from colorectal screenings.

Certain recommended services do not impose any incremental costs at all, the EBRI researchers said, as they are often provided as part of a routine office visit, such as screening for hypertension, tobacco use and unhealthy weight.

Preventive Care Incentives

Joe Vitale, chief HR officer at Oberlin College in Oberlin, Ohio, said the college has provided additional incentives to receive preventive care for its approximately 1,700 employees, all of whom are covered by a high-deductible health plan linked to health savings accounts (HSAs). For instance, the amount of the employer's HSA contribution has been linked to participants seeing their physicians for annual physicals or getting biometric screenings, although those requirements were suspended due to COVID-19.

"In addition, we moved to front-loading all employer-contributed HSA funding to a one-time January lump sum," to encourage preventive care such as annual physicals, Vitale said.

Employee Demographics

Jost expressed concern that smaller employers may choose to charge for preventive services, even if larger employers don't.

"If you're talking about insured employers, and in particular small employers, it might look rather different," he said.

The profile of employees might make a difference, too. At a small employer, "if you have [many] employees who are all over 55 getting colonoscopies and whatever else, it might look rather different than if you're in the tech industry and have a lot of young employees who don't get many preventive services," Jost noted.

However, he added, given the possibility of a long appeals process for this case through the federal courts, nothing is likely to happen to benefits mandates until 2024 or beyond. And, given that a significant foundation of O'Connor's decision was a narrow ruling that the way the U.S. Preventive Services Task Force is appointed is unconstitutional, insurers and employers that still wanted to provide preventive services and encourage their use could use guidelines from other sources—medical specialty societies, for example—should Congress not address the decision with subsequent legislation.

Another option for employers that decide to add additional cost-sharing to lower their costs might be to provide some preventive services and medications cost-free while adding co-payments for others.

"There are many different ways to control costs," Fronstin said. "Shifting costs onto employees is one way. Trying to get better deals with your providers is another, like contracting with centers of excellence for surgery and giving your employees incentives to go there."

Taking the centers of excellence strategy further, employers could begin contracting with providers for colonoscopies and giving employees incentive to go to that provider, as another way to control costs.

Greg Goth is a freelance health and technology writer based in Oakville, Conn.


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