“In an effort to keep health care costs down and encourage better usage, the Affordable Care Act includes a provision that requires preventive care to be offered free of charge. While that may sound good in theory, some benefits experts do not buy into this “free” health care.
“Very simply, nothing is free,” says Gary Bernabe, RHU, CHC, vice president of Strategic Employee Benefit Services. “Somebody’s paying for it. There’s no free lunch.”
Before this provision was passed, preventive care was generally well covered, says Joanne Denise, employee benefits specialist of Strategic Employee Benefit Services. With a small copay, an insured participant could get the necessary preventive care services. However, the perception that preventive care was not well covered took over, and there was a prevailing thought that plan participants would become more engaged in their own health if these services were free, prompting the Obama administration to introduce this provision.
“They might have had a $20 or $30 copay, but that’s really not unreasonable for a pap smear, mammogram, cholesterol checks or immunizations for the kids,” Denise says. “In some areas, there are even community health clinics, where people can get their preventive shots for next to nothing. A lot of people just don’t know those health clinics are there for the average person.”
Premiums, in particular, are facing rate hikes to counterbalance not only the new preventive services provision but also other aspects of health care reform, Bernabe says. As more services are added to required coverage, the expense of health care just gets that much bigger.
“Most people want to blame insurance companies, but all insurance companies are doing is increasing their costs to keep pace with the increased cost of the care,” Bernabe says. “You have to account for the fact that, all of a sudden, you have to cover adult children for another three years. You just throw them in there, and if they have issues, they’re all paid for. Now contraception will be covered. All these things are great, but everything costs money.”
Deductible costs are also being affected because of the free preventive care provision, Denise says. Previously, plan participants could receive their preventive services by simply paying a copay. A routine checkup often includes blood work that is processed at a lab, which was typically covered by the copay; however, now preventive services are defined by the U.S. Preventive Taskforce, and lab work is no longer eligible under the new guidelines. Instead, the lab work cost is being applied to the deductible – much to the surprise of the plan participant.
“We are seeing patients who once paid a $20 or $35 copayment for an annual checkup now faced with $300-$700 charges or higher applied to the deductible,” Denise says. “They are asking, ‘What happened to the free preventive care?’ and ‘Why does my checkup cost so much this year?’ So how many will go get their free annual checkup next year? Some will still be paying for last year’s expense.””
While Denise believes it is the insurance carrier’s responsibility to communicate these changes to plan participants, brokers and employers should also play a role. Many plan participants go in assuming their checkup is covered, as free preventive care implies. They don’t know what services are included or what questions to ask.
“It’s a great idea to make sure you get this information in the hands of all your employees, one way or another,” Denise says. “Maybe it is an email. Maybe it is a text message, but you can’t just say, ‘Oh, well, we put this on the carrier’s website. There is drastic confusion among consumers about what’s covered with my free preventive physical, so you need to be proactive in communication.”