Has the Affordable Care Act Led to a Slowdown in Premiums?
By - Slow and steady appears to be the financial mantra echoing forth within the healthcare industry.
There has been a distinct deceleration in premium growth within the past three years following the implementation of Affordable Care Act (ACA), says a January report from the Commonwealth Fund, as compiled by Cathy Schoen, MA, David Radley, PhD, MPH, and Sara R. Collins, PhD (Schoen, et al).
According to Schoen, Executive Director of Commonwealth’s Council of Economic Advisors, “High deductibles are now the rule rather than the exception.”
Out-of-pocket deductibles and premium costs continue to increase. From 2003 to 2013, the total costs of insurance premiums rose faster than medium household income in every state, explain Schoen, et al.
Throughout the past decade, per-person deductibles have at least doubled in all but six states and the District of Columbia, as the annual cost of workers’ contributions increased by as much as 175 percent.
The primary reason for a decrease in premium growth is a decline in healthcare spending since 2009. Prices paid for hospital, physicians, and medications increased slowly from 2009 to 2013.
“This slowdown came during a time when some critics had warned that health insurance reforms might increase the costs of health insurance for people with private insurance,” say Schoen, et al.
The ACA may be actively contributing to this slow growth, say Schoen, et al, who confirm, “The slowdown in spending per Medicare beneficiary has been dramatic.”
Data suggests that over the past two years, Medicare spending per person has flattened considerably.
“In 2015 — the second year in a row — there will be no increase in Medicare premiums or deductibles,” Schoen, et al maintain.
Data via federal projections suggests throughout the course of the next decade, the per-enrollee medical spending among those who are privately insured will increase more rapidly than that of Medicare, at an average of 4.7 percent annually from 2014 to 2023.
“Concerns are mounting that the recent wave of hospital mergers and hospital acquisition of physician practices will result in higher prices paid to private insurers, regardless of the quality of care provided,” state Schoen, et al.
The ACA contains numerous provisions implemented to slow the rate at which healthcare costs increase.
“Although the Affordable Care Act offers a platform from which to build, securing a more affordable future will likely require action beyond those reforms, focusing on costs of care, particularly for the privately insured,” confirm, Schoen, et al.
Says Commonwealth President David Blumenthal, MD, the effect of high out-of-pocket costs may result in beneficiaries actively avoiding medical care. Within the long term, Blumenthal suggests the public and private sectors actively push to “[keep] premium growth in check without eroding benefits.”
Additional data, according to the Kaiser Family Foundation/Health Research & Educational Trust (HRET) survey, echoes similar findings.
There has been little change in forms of cost sharing involving copayments for in-network physician visits and prescription drugs, confirms the HRET survey.
“These findings are positive and reflect a general slowing in health care costs overall,” says Maulik S. Joshi, DrPH, HRET President and Senior Vice President of the American Hospital Association (AHA). “As we work to improve health care, making sure it remains affordable to Americans is critically important to ensure greatest access by all.”
The report confirms that continuing improvement in the economy will likely put new cost pressure on insurers. Costs are likely to rebound in growth within the economy as the slow and steady trend maintains its course.
