Increasing Health Care Costs

One provision of the health care reform law extended health coverage to employees’ adult children up to age 26.  A recent survey reports that provision increased plan enrollment by an average of 2%.  Consequently the enrollment boost translated to higher costs for employers.  While they cannot charge extra premiums for expanded coverage, companies are allowed to add premium tiers if they choose to pass some of the additional costs to their employees.

Another provision of the health care reform begins next year.  Group health care plans will be required to provide full coverage for a wide range of women’s preventive services, with neither copayments nor deductibles.  This will take effect for all plan years starting on or after August 1, 2012.  These changes are expected to result in “very modest” cost increases for employers.  “Grandfathered” plans will be exempt. 

Employers are bracing for more cost increases in 2014, when most of the health care reform requirements take effect.  28% of survey respondents expect rate increases of at least 3%, 27% expect costs to rise 2% or less, and 29% said they could not predict the cost impact yet.

From Business Insurance, August 8, 2011 issue, pp. 1 and 21.  Also from www.businessinsurance.com article posted Aug. 1, 2011.