Eighteen months after passage of the Patient Protection and Affordable Care Act, group medical benefits costs are on the rise once again, according to The November Employee Benefits Market Survey conducted by The Council of Insurance Agents & Brokers.
“Our latest survey indicated that premium increases have ebbed somewhat after initial shock and uncertainty following enactment of PPACA in 2010,” says Ken A. Crerar, president and CEO of CIAB. “The market has begun to adjust to initial new requirements in health care reform, but some uncertainty may persist as additional aspects are phased in over the next several years.”
Small, medium and large groups face significant price hikes for group health care coverage during the past six months. The largest hikes were felt by small groups with 39% receiving increases of 11-20%, compared with 62% reporting increases in that range in The Council’s May 2011 survey.
More than 35% of small groups received smaller increases ranging from 1-10%, compared to 13% in an earlier survey while medium-size groups — 69% — experienced hikes in the range of 6-15%, compared with 75% in the May survey. Fourteen percent of large-size groups experienced no change or price decreases compared to 5% in the May survey.
Brokers sound off on group medical plan pricing which paints a nuanced picture consistent with adjustments underway to the Affordable Care Act.
“As a whole, recent renewals have been lower than any other time I can remember,” says one broker.
“The trend is lower, renewals more reasonable,” comments another.
“We have seen more competitive new business rates coupled with lower renewals,” says a third broker.
Other brokers saw prices rise due to the impact of PPACA, but noted that increases were moderated by movement and continued interest toward wellness and consumer-driven health plans, and these plans typically have higher deductibles. “Interest in high deductible (plans) is taking off,” says one broker. “Deductibles and co-insurance continue to rise to keep the rates down,” comments another broker.
In terms of pricing, “all the normal stuff, up, up up,” a respondent wrote.
“(Renewals) adding 2-3% for PPACA,” comments another broker.
In previous surveys another development that has emerged is that carriers and employers are offering fewer options since enactment. “In the small to medium account range, we have noticed a tightening of the amount of plan options offered to groups,” one respondent wrote.
Although the November survey indicates some moderation in the intensity of concern, CIAB members remain uneasy about the upcoming implications of PPACA.
More than 95% of respondents express some level of concerns regarding the impact of health care reform. Meanwhile, in the May survey, 100% of responding group benefit consultants expressed some level of concern about the impact of PPACA on their business.
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