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1 in 2 Employers Link PPACA to Cost Increases

Margaret Dick Tocknell, for HealthLeaders Media, August 14, 2013

The small employer is something of a poster child for PPACA opposition with pundits often predicting that the costs of healthcare reform will put small businesses out of business.

Employers identified the top three PPACA cost drivers in 2013 as: the Patient-Centered Outcomes Research Institute (PCORI) fee (38%), general administrative costs (35%), and costs associated with resources necessary to communicate with employees about the PPACA provisions (28%).

The PCORI fee will cover the costs of research into the quality and effectiveness of care. In 2013 the fee was $1 for each of the annual average number of covered lives in a self-insured plan. The fee will double to $2 in 2014. Large employers, which tend to be self-insured, will clearly feel the effect the most. More than 40% of employers with more than 500 employees named PCORI as the top cost driver of the ACA.

To counter the cost increases employers are turning to the tried and true. Among the top methods: cost shifts to employees (53%), reduce the level of health benefits coverage (29%) and shift to high-deductible health plans (28%).

Stitch noted that increasing preventive measures such as wellness, value-based healthcare, and disease management was selected by 36% of employers. That is a sign that employers "recognize the importance of healthier employees in the workplace and in their health plans. Encouraging healthier behaviors has a positive impact both on the bottom line and on healthcare costs."

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