THE COST (AND BENEFITS) OF PREVENTION

One of the less controversial provisions of PPACA is the requirement that preventive services be covered by most health plans, generally with no patient cost sharing, for new and renewed enrollment after September 23, 2010 (the six month anniversary of the signing into law of the new act).

All plans other those grandfathered under PPACA must offer coverage of a list of preventive services based on recommendations from the United States Preventive Services Task Force, the CDC’s Advisory Committee on Immunization Practices, and HHS’ Health Resources and Services Administration.

Although grandfathered plans are excluded from the prevention requirement, many large group plans already cover some preventive services at no cost. As large groups modify their coverage and lose grandfathered status, they will become subject to the prevention provisions.

The interim final regulations just published jointly by HHS and the Departments of Labor and the Treasury are accompanied by a list of expected benefits including improved health from prevention or delayed onset or earlier treatment of disease, lower absenteeism and increased productivity, and lower health care costs due to avoidance of later more expensive treatment.

Also included is an estimate of the impact that the prevention coverage provisions will have on premiums. Not too surprisingly, adding coverage of preventive services with no patient cost sharing is going to result in premium increases. These are likely to be highest for those with individual coverage since these plans typically offer fewer preventive services today, and lowest for large groups which typically already include preventive care.

The average premium increases (due to a combination of increased demand for “free” services and transfer of some coverage costs from patients to insurers) is estimated to be about 1.5 percent, or around $200 a year for family coverage, an amount that reform advocates will likely claim is miniscule and opponents will trumpet as outrageously expensive in the middle of a recession.