Fix Health Care Policy

Side Effects: Obamacare Threatens the Future of Health Care Cost Containment

Employers’ health benefit cost growth had the smallest increase in 15 years—only 4.1 percent in 2012 compared to 6.1 percent in 2011—according to Mercer’s National Survey of Employer-Sponsored Health Plans.

The lower-than-usual increase in costs is attributed, in part, to increased usage of consumer-directed health plans (CDHP).

Despite this, many provisions in Obamacare threaten the viability of CDHPs, which have great cost-saving potential and have been growing in popularity.

One such regulation is the medical-loss ratio (MLR) requirement, which requires insurance companies to spend 80 percent of premium revenue on medical claims or other health care quality improvements. The remaining 20 percent is for fixed costs such as administrative and other non-medical expenses. If the minimum of 80 percent is not met, the insurer must issue a rebate to the consumer.

Read the rest on The Foundry…

Tags: cost containment, employer health benefit, health plans, increase, ObamaCare