Don’t become attached to your health benefit plan, PPACA is causing employers and insurers to rethink their strategy

The Sunday NYT July 18 includes a story about new health plans being developed that have small closed networks with no out of network benefits. The idea is simple, control costs through better discounts and tighter control over services provided – dare I say (again), just like the original HMOs attempted to do.

The premiums for such plans will be lower i.e. “affordable” but if you don’t use in network doctors you are on your own for all costs. For some people such plans are a good idea, but if an employer converts to such a limited benefit, the idea that ” if you like the plan you have, you can keep it” is out the window.

These limited benefit plans could also run up against the Administration’s ideas for expanding benefits, and limiting out of pocket costs – to zero in some cases.

Take note…this is just the first of many changes in health benefits that are in the way. Insurers and employers must react to PPACA and to not only ongoing higher health care costs, but the additional costs created by PPACA. Many employer plans, especially large employer plans have a long way to go before lower benefits bump against the 60% value level called for in PPACA.

If you think that health care reform will not adversely affect your current benefits, you are wrong.

Some of the choices you now have will go away, new options will provide lower benefits, benefits will gradually migrate to the lowest level permissible and your premiums and the portion of the premium you pay will accelerate.

All this is true because health reform does nothing to control health care costs and at the same times adds to the costs of existing plans through benefit mandates and cost shifting.

The Administration’s goals of expanding coverage, mandating coverage levels and limiting cost sharing are simply inconsistent with affordability for employers or employees.