Filed Under:Markets, Employee Benefits

Segal sees little to no cost increase under PPACA

So much for the federal health system change causing all heck to break loose.

Benefits analysts at Segal Consulting say they failed to find evidence that the Patient Protection and Affordable Care Act (PPACA) has done much to increase the underlying cost of insured health care.

The 2014 medical trend, or increase in actual medical care costs, for preferred provider organization (PPO) plans could fall to 8 percent in 2014, down from 8.8 percent this year.

The 2014 trend for high-deductible health plans might fall to 7.9 percent, from 8.6 percent.

"Health benefit plan cost trend rates show the slowest growth in 14 years," the analysts report.

Segal came up with its latest annual health plan cost trend projections by polling 99 insurers and benefit plan administrators.

Segal asked the participants about the expected effects of PPACA on plan costs.

PPACA exempts plans with "grandfathered status" from many new PPACA requirements, such as a requirement that plans cover a package of basic preventive services without imposing co-payments or deductibles on the insureds getting the services.

Segal found that two-thirds of the survey participants said complying with the preventive services package rules would lead to an increase in medical costs of 1 percent or less, and about 25 percent of the participants said a loss of grandfathered status would have no noticeable effect on medical costs.

About 6 percent of the participants said having to comply with the preventive services package rules would increase their medical costs by 3 percent or more.

Some PPACA provisions that have already taken effect, such as programs that encourage doctors and hospitals to do a better job of coordinating care, and programs that encourage insurers to move away from fee-for-service payment arrangements, may be helping to hold down costs, the analysts say.

Segal has estimated that PPACA-related mandates, fees and taxes could account for a total of about 4 percent of plan costs in 2014.

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