Healthcare tradeoffs

With open enrollment season quickly approaching, many employees are wondering how the healthcare reform bill (the first of its previsions taking effect in late September) might affect their existing healthcare plans. A more prominent concern, however, revolves around cost. In a series of articles, MarketWatch contributor Kristen Gerencher tackles the issue of America’s evolving healthcare landscape, and explains what employees should expect over the next year. Though employees on employer-provided healthcare plans should (or may) look forward to some of the coming changes, no cause is without effect.

Some changes have already taken effect—for example, parents are now allowed to cover their children through their healthcare plan until they turn 26. In addition to this, other changes and reforms include, says Gerencher:

• A new appeals process (denied claims, once passed the first level of the appeals process, will be adjudicated by a third party); more preventative care-related incentives;
• The abolishment of lifetime dollar limits; new rules preventing insurers from denying coverage to children, under the age of 19, with preexisting conditions;
• New restrictions on insurers, barring them from retroactively canceling the coverage of sick policy holders. With regard to this change, Gerencher observes that the practice of canceling coverage has become widespread during the recession. Though, Gerencher concludes her exposition, however, with the question of what such reforms will have on the overall cost of healthcare.

Gerencher’s answer to this question spread across three separate articles (links to which can be found below); Gerencher’s reports conclude, however, that the reforms will account for “1% of next year’s additional cost increase, while higher prices from health-care providers account for the other 1%.” Employers, says Gerencher, are “budgeting for an average 9% jump in health-care costs” in 2011, a 2% increase from the prior year. In light of this, more employers will be both passing on a greater share of the cost of healthcare premiums to their employees and switching to plans which require employees to pay high deductibles. Though there is a silver lining—the reform bills equip policy holders with a host of new rights preventing insurers from unduly cancelling converge in the case of a catastrophic medical event. This silver lining, for some time and for some employees, will be difficult to see through the looming cloud of uncertainty to which reform has given rise.

Gerencher’s trilogy on the emerging healthcare landscape includes: Large employers recast health plans for 2011; Workers pay bigger share of health costs; and, her most recent, Answers to 7 pressing health-care questions.