Living in Florida means not worrying about getting a good parking place when I'm shopping. In fact, the weather is so beautiful in Florida this time of year that I purposefully park far away. It allows the ol' pedometer a chance to click a few extra times as I work off the eggnog consumed over the holidays and also allows me to enjoy a little sun on my face and the sight of palm trees swaying in the breeze. But we all know the weather in Florida isn't always so pleasant. Hurricanes agree with all those Disney tourists that Florida is a favorite place to visit. The most recent one in our area, Wilma, came from the southwest with a vengeance. It slammed us - uprooting trees, knocking down power lines, sending roof tiles as projectile missiles through the air. Then it cleared. And the weather was sunny and calm. And for a short amount of time, all was well. But it was only the eye of the storm - with even more damaging hurricane winds churning behind it.
That memory of Wilma, particularly its large, sunny eye, kind of reminds me of the year 2011 as it relates to the unfolding implementation of the Patient Protection and Affordable Care Act. As the curtain comes down on the first full year of health care reform, things are relatively quiet, and claims experience is relatively typical. By 2018, we may find ourselves reflecting on 2011 and recalling that we were all in the calm eye of a Category 5 hurricane.
Effective Jan. 1, 2010, we welcomed the "kids" back in the plan as growing percentages of parents also welcomed them back into the nest. There really wasn't a huge jump in our claims that could be attributed to covering 26-year-old dependents, but Florida already covers kids through age 25. Any covered dependent adds an annual cost to a health plan, but these young bucks are, for the most part, pretty healthy. But not all employers saw such a smooth transition to this eligibility mandate. One source estimated that 2.3 million new dependents were enrolled on employer-sponsored plans nationwide, and that they have been, at least in part, responsible for the average 9% increase in costs over plan year 2010.
On board with ERRP
We jumped into the Early Retirement Reinsurance Program before the ink was dry on the president's signature. After all, we're a very "wise" group in county government. Our average enrollee is age 50, so there were plenty of folks falling in that 55- to 64-year-old age group. There were a few bumps along the road to reimbursement, but we managed to bank a few hundred thousand dollars that will offset costs in 2012. Our staff also enjoyed a bonding moment as we dutifully stuffed envelopes filled with required ERRP notices.
Our employees are getting free preventive care, which is particularly popular around flu season when they no longer have to come up with a copay for their flu shots. I'm anxious to see the year-end reporting to determine how many of us actually saw our primary care docs this year. Since South Florida government entities are still heavily insured by managed care plans, we have a pretty high rate of employees who get to their primary care doctors for preventive care each year. Claims haven't really shown a sudden increase in cost due to this benefit. However, it's too soon to tell if we've managed to cut future costs by diagnosing problems earlier, because a $20 copay is no longer stopping that small number of employees who historically haven't seen their physician on a regular basis. It's often occurred to me that the "white coat" syndrome may be more prohibitive than the $20 for that small minority.
No one seemed overly concerned about the over-the-counter drugs no longer falling under their flexible spending accounts. But like many employers, we had to significantly increase employee cost-sharing for plan year 2011, and so those flex dollars were easily absorbed.
So, for the most part, 2011 was remarkably unremarkable. In fact, the new cost-sharing provisions we put in place actually resulted in a rare decrease in claims as compared to plan year 2010. There were no regrets from my camp that we chose to bump up cost-sharing and forgo the grandfathered status of our old plan.
We even made that sneaky new Oct. 15 deadline for the distribution of our Medicare Part D Notices of Creditable Coverage and we're gearing up to meet the deadline for the $1 per plan participant annual tax - I mean, "Comparative Effectiveness Research Fee" - which will help fund research for effective treatment. That one makes me scratch my head just a bit. How have we been funding research in the past? Doesn't our great country already boast the most aggressive and innovative treatment of disease in the world already?
But as plan year 2011 came to a close, the clouds were once again brewing behind us. The next three years will bring about a multitude of changes until reform reaches its 2014 crescendo. And with an election year right in the middle of it all, employers better get their disaster plans in place. The big one's going to blow, and this one is going to make Wilma look like Pebbles!
Contributing Editor Nancy L. Bolton is the director of risk management for the Palm Beach County Board of County Commissioners in West Palm Beach, Fla.
