Benefits

Impact of PPACA on Health Plan Costs

By Kevin McGuinness editors@plansponsor.com | October 04, 2013

October 4, 2013 (PLANSPONSOR.com) – A survey indicates the impact of the Patient Protection and Affordable Care Act (PPACA) on health benefit plan costs will be low.

The 2014 Segal Health Plan Cost Trend Survey, Segal Consulting’s 17th annual survey of managed care organizations, health insurers, pharmacy benefit managers and third-party administrators (TPAs), found that, when asked about the impact of the PPACA on costs, two-thirds of respondents projected a cost increase of 1% or less due to the loss of grandfathered status (i.e., group health plans in existence as of March 2010, when the PPACA became law, which remain largely unchanged), with another one-quarter of respondents predicting that the loss of grandfathered status will be cost neutral.

Only 6% of respondents anticipate that implementing preventive care coverage for plans that lost their grandfathered status under the PPACA will result in a cost trend increase of more than 3%.

According to the survey, plan sponsors must be ready to implement new requirements introduced by the act and determine their impact on plan costs. Plan sponsors will also need to play an active role to continue to get the most for their benefit dollars.

The survey also found that 2014 is expected to show the slowest growth for health benefit plan costs in 14 years.

The survey was conducted during May and June. More information about it can be downloaded from here.