While health care insurers wrestle with a host of emerging Patient Protection and Affordable Care Act (PPACA) requirements set to take effect in 2013 and 2014, they are buoyed by the relative stability of health care costs in recent years.
After a stall in the lead-up to last November’s elections, implementation of PPACA is again advancing. In late November, three proposed rules were issued for comment due within 30 days. Each of these will soon take effect.
The proposed rule relating to health insurance market rules will prevent insurance companies from discriminating against people with pre-existing conditions. The proposed rule relating to essential benefits, actuarial value and accreditation standards is designed to promote consistency across plans, in part, by defining a core coverage package. The proposed rules on wellness programs set standards to ensure that required wellness programs are well-designed and consumer-protective. In addition, a proposed rule on benefit and payment parameters was issued in early December.
Most of PPACA’s important provisions are designed to take effect in 2014. That means that most insurers and multi-employer plans will use all of 2013 in preparation.
According to insurance industry sources, many insurers are sticking with current benefit plans in 2013, rather than make changes that would have to be reconfigured in 2014 after all rules are clear. Helping them hold their present position is the slower rate of recent increases in the benefit cost of health care.
An annual study by Mercer, a global accounting firm, shows that the average total health care benefit cost increased by only 4.1 percent in 2012, considerably less than the double-digit rates common earlier in the decade. For 2013, the Segal Health Plan Cost Trend Survey projects the lowest rate of increase in the past 11 years. The average cost of coverage for each worker is $11,003 at large companies and $9,913 at smaller ones.
A key reason for the leveling of coverage cost is a shift by employers to higher deductible plans. For instance, a spokesman for a benefits management company in Florida said that the average high-deductible plan is now $2,500, up from $1,500 a few years ago, and 70 percent of his clients have migrated to these plans. A Kaiser Foundation study found that 34 percent of participants in employer-sponsored plans have deductibles of $1,000 or more, and 14 percent top $2,000.
Another reason for the leveling, say insurers, is better collaboration between their industry and health care providers (doctors and hospitals) to improve the quality of care and reduce waste, duplication and mistreatment in the system.
The LHSFNA Health Promotion Division continues to monitor PPACA rulemaking on its Health Care Reform Updates page. Status updates on state decisions with regard to the establishment of state exchanges are maintained by the Kaiser Family Foundation.