Health insurance companies are now free to require cost-sharing for preventive services, but don't expect that to happen any time soon.
Since a federal judge struck down an Affordable Care Act requirement that patients have access to certain services at no cost, the health insurance sector made clear that nothing would change in the short term, even though the ruling took effect immediately. Industry organizations such as AHIP and insurers such as Elevance Health and Kaiser Permanente swiftly issued statements assuring their members that preventive care would continue to be covered without cost-sharing.
The Justice Department plans to appeal the judge's decision. And it may seek a stay in the meantime that would restore the preventive medicine rules, so the judiciary likely will be considering this case for months, at least. Whatever the final outcome, health insurance companies are not expected to reimpose cost-sharing for many, if not all, preventive care, said Paul Schuhmacher, a principal at the consulting firm Aarete.
Following the court ruling and eliminating no-cost access to preventive medicine would upset policyholders and attract unwanted attention, Schuhmacher said. “A bad PR move is something that would have huge negative effects to their company and their bottom line,” he said.
Plus, several major insurance companies belong to conglomerates that also offer patient care at clinics and pharmacies—such as CVS Health's Aetna and MinuteClinic—that benefit from providing more services. “Most payers have very good profits. They’re not looking for that type of disruption to their business,” Schuhmacher said.
The no-cost preventive care guarantee has proven popular and has little impact on insurance company finances because the expenses are factored into members' premiums. ACA-mandated preventive services account for just 3.5% of private health insurance companies' annual spending, the Health Care Cost Institute reported last year.
According to the Health and Human Services Department, 150 million people have insurance plans subject to the preventive care policy. The Kaiser Family Foundation reports that 60% of people with private health insurance receive preventive services such as cancer tests, depression screening and the HIV prevention medication known as PrEP each year.
In fact, it was common before the ACA for at least some preventive care to be covered without cost-sharing, said Sabrina Corlette, a professor and co-director of the Center on Health Insurance Reforms at Georgetown University's McCourt School of Public Policy.
“Insurers generally lobbied against the law writ large,” Corlette said. “But I think there were other provisions that worried them more than this one.”
Employers, who provide health benefits to the majority of Americans, likewise don't plan to cut back on preventive coverage regardless of the legal dispute.
According to an Employee Benefit Research Institute survey from October, 80% of businesses don't intend to scale back these benefits even if the courts decide they can. Employers cited retention and recruitment, negative health outcomes, health inequities and low costs as reason to maintain the benefit. Requiring out-of-pocket spending would save employers less than 0.5% on healthcare spending, according to a separate Employee Benefit Research Institute report.
If the court decision stands, health insurance companies can pick and choose what preventive services to cover without cost-sharing, rather than adhere to those recommended by the U.S. Preventive Services Task Force, said Lynn Blewett, a health policy and management professor at the University of Minnesota.
Insurers are less likely to indefinitely cover the costliest preventive services or treatments that are from single sources, such as Gilead’s PrEP drug Truvada (also knowns as emtricitabine-tenofovir), and more likely to cover those widely available, Schuhmacher said. Complicating the cost analysis is that Americans don't tend to remain with the same insurer long enough for the financial benefits of prevention to accrue to the companies that paid for early interventions, he said.
Insurance companies also would be swayed by patient advocacy groups, Blewett said. Organizations representing the interests of HIV/AIDS patients, for example, would emphasize importance of cost-free screenings and treatments and highlight research showing that any amount of cost-sharing discourages use, she said. “It’s one of the key ways we prevent transmission of HIV. It's a prevention strategy for the whole country," she said.
Health insurance companies will offer previews of their plans when they begin filing rate notices to state regulators next month. And some states have levers to pull to restore at least some of the no-cost services covered under the ACA. At least 15 have laws of their own, according to a report Corlette co-authored. States, however, generally don't have regulatory authority over large-group health plans governed by the federal Employee Retirement Income Security Act of 1974.