Today’s Managing Health Care Costs Indicator is
1.5%
1.5%
The Obama Administration has announced regulations clarifying the new requirement that health plans cover preventive care without copayments. The regulations were announced less than four months after the passage of the Patient Protection and Affordable Care Act (PPACA), and apply to health plans that are not “grandfathered.” Last week, the administration announced regulations around grandfathering, clarifying which changes in benefit design will mean a plan will no longer be grandfathered.
There are three categories of required covered services
- 1. Those rated “A” or “B” by the US Preventive Services Task Force. This list ranges from screening for cancer to providing folic acid supplements to women considering pregnancy to giving aspirin to prevent heart attacks.
- 2. Immunizations recommended by the Centers for Disease Control and Prevention. This includes pediatric and adult vaccines.
- 3. Recommendations from the Health Resources and Services Administration (HRSA) regarding preventive care for children . Recommendations for women’s health are expected in early 2011.
Here’s a link to the complete list of required covered services.
This is good news for health care. Preventive services are among the most cost-effective services available in health care. Further, they are terribly underused. For instance, less than 7% (!) of adults get the Zoster vaccine to prevent shingles, a painful complication from childhood chickenpox that often affects adults over 50.
This is good news for patients, since eliminating financial barriers will increase the use of these services than can help patients live better lives.
The regulations will cause some angst at health plans, where new systems will have to be developed to arrange for payment for a number of nonprescription drugs which have previously not been covered.
Some intuitively believe that covering more preventive services will save money. Some of these services (pediatric immunizations) are indeed cost saving. However, most are cost-effective – so that there will be incremental cost, but it will be modest compared to the benefits.
The Obama Administration is being honest here, and says that these new regulations will increase health care costs by 1.5%. To put this in perspective, employer-sponsored health care costs about $700 billion per year, so this type of an increase would cost $10.5 billion. This isn’t a small amount, but it’s an investment well worth making.
