As Republicans argue about which health care benefits to cut, there comes a report that adds insult to injury. Not only would essential health benefits likely become completely unaffordable to many if they’re dropped from health insurance plans, but it’s revealed the amount they add to the cost of monthly health care premiums is actually pretty small.
An analysis from the Urban Institute and the Robert Wood Johnson Foundation indicates EHBs covered under the Affordable Care Act but slated for removal under Republicans’ repeal-and-replace efforts won’t trim the cost of monthly premiums by very much.
However, they would add considerable, if not insurmountable, expense to the costs which would have to be borne by policyholders.
For instance, while Republicans intend to cut maternity and newborn care, that would only shave 6 percent off monthly premiums. Habilitative and rehabilitative care would save even less money, representing just 2 percent of the overall cost of a policy, while pediatric dental and vision care account for a paltry 1 percent.
The lion’s share of premiums are for services “generally seen as fundamental to health insurance,” the study says. Office-based care represents 30 percent, while prescription drugs account for 22 percent, outpatient facility care for 17 percent, and inpatient care represents 15 percent.
The study also says if maternity and newborn care are cut from EHBs — so only people who actually use those services would be paying for them instead of an insurance policy covering the costs — the additional premium cost would be $13,888 annually.
The study points out while elimination of specific benefits as covered services can cut premium costs, it also raises by a substantially higher margin the cost of that care for the people who need it.
The per-person costs of insuring EHBs are reasonably low, says the RWJ Foundation, “and account for small percentages of the overall premium when the costs are spread broadly across a large population with diverse ages and health care risks.
Experts note placing the costs fully on the users of health care can make those services unaffordable for those who need them.
“The idea that essential health benefits can be cut without significant impact on access to the services they cover is easily dispelled by the data,” Katherine Hempstead, senior adviser at the Robert Wood Johnson Foundation, says in a statement.
Related: Study says ACA market is stabilizing
Hempstead adds, “The great majority of the spending in ACA-compliant plans is for inpatient and outpatient care and prescription drugs, which are considered to be basic and fundamental components of any health insurance coverage. The often-targeted category of maternity and newborn care accounts for only 6 percent of total premium costs, but would obviously be very expensive if only those using those services were required to pay.”
The study says, “Health insurance is, at its core, a mechanism for pooling health care risk across a population. As this analysis shows, the per-person costs of insuring essential benefits is reasonably low when the costs are spread broadly across a large population with diverse health care risks.”
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