Smart Benefits: Healthcare Reform Delays Hit Consumers Hard

Monday, August 19, 2013

Amy Gallagher, GoLocalWorcester Business/Health Expert

Stakes remain high for consumers concerned about healthcare.

The most recent delay in healthcare reform gives insurers a grace period of one year to place limits on out-of-pocket expenses. Consumers who were looking forward to the protection of lower maximums on medical and pharmacy deductibles and copays will now have to wait until 2015.

Big Out-of-Pocket Expenses Continue for Consumers

Out-of-pocket expenses for consumers were supposed to be capped at $6,350 for individual plans and $12,700 for family plans starting January 1. How individuals and employees will be affected by the delay of this cap depends a lot on their own health insurance coverage.

That's because some plans have lower out-of-pocket maximums while others have higher ones–and some don't have limits, exposing consumers to unlimited out-of-pocket expenses.

Specialty Drug Costs a Concern

The cap delay is causing a big concern among consumers, particularly those with high deductible plans who use certain medications known as specialty drugs–the cost of which continues to skyrocket.

While consumers welcome access to new drugs covered by insurers that treat serious, chronic conditions like cancer and multiple sclerosis, these medications cost thousands per month–and co-pays are generally higher for these drugs.

More Expenses as Premiums Rise

It's not just the cap delay that consumers face this year. Health, standalone dental and vision insurance, and even pharmacy benefit managers (PBNs) who manage prescription plans for medical carriers, will face the first year of the new Health Industry Fee in 2014. The carriers will have to pay the fees, but they'll pass the costs on as rate increase.

Insurers and employers have already started paying other fees and taxes that will influence rate increases for 2014. In total, health care reform fees will add another 4.5-5% on average to health insurance premiums next year, and will continue to escalate in future years.

Healthcare reform promised lower costs for consumers. But the cap delay, along with other provisions of the law that are rolling out for January, only point to higher cost as insurers and employers are hit with new fees and taxes.

Amy Gallagher has over 19 years of healthcare industry experience. As Vice President at Cornerstone Group, she advises large employers on long-term cost-containment strategies, consumer-driven solutions and results-driven wellness programs. Amy speaks regularly on a variety of healthcare-related topics, is a member of local organizations like the Rhode Island Business Group on Health, HRM-RI, SHRM, WELCOA, and the Rhode Island Business Healthcare Advisory Council, and participates in the Lieutenant Governor’s Health Benefits Exchange work group of the Health Care Reform Commission.