Preventive services required under PPACA-great expectations, higher premiums, less personal responsibility

The Department of Health and Human Services has released regulations regarding required preventive services under PPACA, beginning next year a large number of such services will be covered without any cost to plan participants on the assumption that cost is a main barrier to obtaining such services.  These requirements do not apply to grandfathered plans, but such plans already cover many preventive services with (in most cases) a deductible and/or coinsurance.  According to HHS.  In addition, because of the onerous requirements and resulting  inability to manage costs going forward, it is unlikely that grandfathered plans will hold that status for very long – another bate and switch contained in PPACA.

Here are some quotes from healthcare.gov

Next year, an estimated 31 million people in new employer plans and 10 million people in new individual plans will benefit from the new prevention provisions under the Affordable Care Act. The number of individuals in employer plans who will benefit from the prevention provisions is expected to rise to 78 million by 2013, for a total potential of 88 million Americans whose prevention coverage will improve due to the new policy.  Many of the 98 million people in group health plans that are expected to be “grandfathered” and thus not subject to these regulations already have preventive services coverage.

One must wonder why or how employers will set up new plans covering 31 million Americans given that the total uninsured in America is around 45 million. 

“Free” Covered Services

Depending on your age and health plan type, you may gain easier access to such services as:

• Blood pressure, diabetes, and cholesterol tests;
• Many cancer screenings;
• Counseling from your health care provider on such topics as quitting smoking, losing weight, eating better, treating depression, and reducing alcohol use;
• Routine vaccines for diseases such as measles, polio, or meningitis;
• Flu and pneumonia shots;
• Counseling, screening and vaccines for healthy pregnancies; and
• Regular well-baby and well-child visits, from birth to age 21.

 

Nationally, Americans use preventive services at about half the recommended rate.[3]  An estimated 11 million children and 59 million adults have private insurance that does not cover adequately cover immunization, for instance.[4]  Cost-sharing (including deductibles, co-insurance, or co-payments) reduces the likelihood that preventive services will be used.  One study found that the rate of women getting a mammogram went up as much as 9 % when cost-sharing was removed.

Coverage of these services at 100% of the cost will add 1.5% to premiums according to HHS.  That is in addition to the 1% that will be added as a result of coverage for adult children. On the other hand, as noted above the rate of utilization in the example goes up by only 9% which seems to indicate that the lack of utilization of such services is not solely or even primarily because of out of pocket cost.

While the estimated effect on premiums of this policy is roughly 1.5 % on average, there are significant out-of-pocket savings for Americans who currently have no or limited coverage of preventive services.  The new rules could provide significant savings for Americans in greatest need of important, potentially life-saving preventive services.  For example, guidelines suggest that a 58-year old woman who is at risk for heart disease should receive a mammogram, a colon cancer screening, a Pap test, a diabetes test, a cholesterol test, and an annual flu shot; under a typical insurance plan, these tests could cost more than $300 out of her own pocket. (This assumes 25% co-insurance for a $1,000 colonoscopy, $80 for a mammogram, and $50 for the Pap smear.  In addition, it assumes $10 each for the cholesterol test, diabetes test, and flu shot.)

 As noted in the example above, an array of preventive tests (a bit of a misnomer, but no matter) will cost this person $300 a year (or less given some test are not annual).  That’s barely one trip to McDonald’s  a week (Americans get one quarter of all their meals at restaurants) or four cartons of cigarettes in many states and considerably less than a couple going to the movies twice a month or one trip to the ball game for a family of four.  So, can Americans afford preventive services with a reasonable co-payment or coinsurance?  Of course they can, it is simply they choose not to spend their money that way. 

One of the most dangerous aspects of the current version of health care reform is promotion of the myth that all health care is unaffordable and that Americans cannot afford reasonable cost sharing for that care.  It is not only the wealthy who spend their money on other than the necessities of life.  We are again setting the stage for growing costs because of the lack of personal involvement or concern, we undermine the very concept and purpose of insurance and we are embedding an entitlement mentality that we cannot afford and best serves no one.

Here are all the recommended preventive services to be covered in full.