Health Cost Expert: Obamacare Won't Help Employers

Wednesday, 21 May 2014 07:46 PM

By Sean Piccoli

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A negotiator who bargains down medical bills for self-insured employers said that Obamacare will do little to cut their costs, which he said are starting to "escalate" in the latest round of heath plan renewals.

The burden of not getting price-gouged by doctors and hospitals still falls on self-insured employers, even in the age of Obamacare, Steve Kelly, CEO of the health-cost management firm ELAP Services LLC, told Newsmax TV on Wednesday.

"Our advice to them is to not really wait, or have their expectations raised by the Affordable Care Act, but rather to take a hands-on approach to managing the cost of treatment," Kelly told "America's Forum" host J.D. Hayworth.

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Self-insured employers like those Kelly represents — small businesses and municipal workforces of 100 to 1,000 employees — pay for healthcare out of their own coffers, but often hire so-called third party administrators (TPAs) to handle premiums, claims and paperwork.

Some employers switched to self-insurance fearing Obamacare "rate shocks" in the regular marketplace, only to be hit with big premium hikes from their TPAs.

"The renewals that we're seeing for some of the plans, they're beginning to escalate again," said Kelly, adding, "and I don't think there's anything in the [Affordable Care Act] law or the insuring process that's going to change that."

For all the assurances that the new law would "bend the health-care cost curve" downward, self-insured employers might not see any of that effect in their direct dealings with health plans, hospitals, doctors and labs.

"There are plenty of problems with the Act and I don't think employers can be — as I say, be optimistic it's going to bring any immediate relief," said Kelly.

Kelly said, for example, that a typical self-insured employer will receive a bill of $4,000 - $6,000 for an employee who got a CT scan, not knowing the procedure only cost $200 - $400 to provide.

"I don't think there's anything in the Affordable Care Act, or any insurance mechanism even before the Affordable Care Act, that helps employers with that kind of confusion," he said.

Kelly said employers need to cut through that confusion, often by collecting data about actual medical costs and then sitting down directly with health care providers to hash out a fair price.

"When employers and medical providers sit at a table and have discussions about the cost of care, invariably we find it has a very, very positive effect. So we're big advocates for that," said Kelly.

It's not a service he expects the federal government will provide.

"I hope that the law is not going to infringe upon an employer's right — I would say obligation — to watch out for what's being spent on their employees' behalf," said Kelly.

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