Six (6) months after the implementation of the Patient Protections and Affordable Care Act costs for healthcare are shifting:
What is causing healthcare costs to decrease?
• High deductible health plans. This is shifting more of the cost of healthcare onto the employee/patient.
• Coinsurance in increasingly replacing copays. This is shifting more of the cost of healthcare onto the employee/patient. Studies indicate that 40% of employers intend to shift more of the costs to the employee/patient.
• Generic drugs are replacing name brand medications.
What is causing healthcare costs to increase?
• The requirement to keep children on their parent’s health plans up to age 26 is resulting in a 1% premium increase for employers.
• Physician practices are merging with health systems. This is providing increased bargaining power with private insurers.
• Hospitals are shifting costs to private insurers as Medicare reimbursement rates are lowered.
• Providers are now being forced to incorporate electronic medical records. While it is anticipated that this will decrease costs over time, currently it translates into an expense driver for providers.
• The abolishment a lifetime maximum on coverage and pre-existing conditions clauses is predicted to increase insurers’ costs. Because of this insurers have instituted large premium increases in an effort to safeguard against future losses as a result of the new legislation. Estimates are that insures will increase premiums 9% for HMOs and 11% for PPO plans.