WASHINGTON -- AARPs endorsement helped secure passage of President Barack Obamas health care overhaul. Now the seniors lobby is telling its employees their insurance costs will rise partly as a result of the law.
In an e-mail to employees AARP says health care premiums will increase by 8 percent to 13 percent next year because of rapidly rising medical costs.
And AARP adds that its changing copayments and deductibles to avoid a 40 percent tax on high-cost health plans that takes effect in 2018 under the law. Aerospace giant Boeing also has cited the tax in asking its workers to pay more. Shifting costs to employees lowers the value of a health care plan and acts like an escape hatch from the tax.
Most plan co-pays and deductibles have been modified Jennifer Hodges AARPs director of compensation and benefits wrote employees in an Oct. 25 e-mail. Plan value changes were necessary not only from a cost management standpoint but also to ensure that AARPs plans fall below the threshold for high-cost group plans under health care reform.
AARP officials said medical inflation is the main reason employee costs will be going up. The health care law is a small part said David Certner legislative affairs director.
Although the tax on so-called Cadillac health care plans doesnt take effect for years employers are already beginning to assess their potential exposure because it is hefty: at 40 percent of the value above $10200 for individual coverage and $27500 for a family plan. The tax is intended as a savings measure to prod employers and workers into more cost-efficient plans.
Certner said AARPs plans are currently under the threshold for the tax. We intend to stay below those thresholds he said. Its not in anybodys interest to move above those thresholds not the employees nor the employers.
AARP officials say the organizations public policy recommendations are made independently of other considerations including its range of business ventures from travel to insurance to publishing.
The 40 million-strong AARP represents people 50 and older including retirees on Medicare and Social Security. Its endorsement of health care overhaul came at a critical time last year days before a close vote on the House floor.
The impact on AARP employees is not a factor at all in our policy making which is directed at the impact on our membership and on all older Americans said Certner.
About 4500 people are covered by AARPs plans including employees dependents and retirees.
We supported the (health care) package because it contained incredibly important protections for our younger members who often have problems getting access to care said spokesman Jim Dau. And because it helps our older members in Medicare with important new benefits.
Starting in 2014 the overhaul law prohibits insurance companies from turning down people with medical problems and limits what they can charge older customers. It gradually closes the coverage gap in the Medicare prescription benefit and improves coverage for preventive care.
The Obama administration says changes required by the law so far have only had a minimal single-digit impact on premiums. Many benefits experts agree with that assessment but point out that the increases come on top of untamed health care inflation.
AARP warned its employees that more cost-shifting could be in store. AARP intends to make similar changes as necessary in the future to avoid the (health plan) tax said Hodges e-mail.
Current forecasts are that the overhaul will only have a small impact on job-based coverage slightly reducing the number of people who would otherwise be covered by employer plans. Those workers would have access to taxpayer-subsidized coverage through new insurance markets.
WASHINGTON -- AARPs endorsement helped secure passage of President Barack Obamas health care overhaul. Now the seniors lobby is telling its employees their insurance costs will rise partly as a result of the law.
In an e-mail to employees AARP says health care premiums will increase by 8 percent to 13 percent next year because of rapidly rising medical costs.
And AARP adds that its changing copayments and deductibles to avoid a 40 percent tax on high-cost health plans that takes effect in 2018 under the law. Aerospace giant Boeing also has cited the tax in asking its workers to pay more. Shifting costs to employees lowers the value of a health care plan and acts like an escape hatch from the tax.
Most plan co-pays and deductibles have been modified Jennifer Hodges AARPs director of compensation and benefits wrote employees in an Oct. 25 e-mail. Plan value changes were necessary not only from a cost management standpoint but also to ensure that AARPs plans fall below the threshold for high-cost group plans under health care reform.
AARP officials said medical inflation is the main reason employee costs will be going up. The health care law is a small part said David Certner legislative affairs director.
Although the tax on so-called Cadillac health care plans doesnt take effect for years employers are already beginning to assess their potential exposure because it is hefty: at 40 percent of the value above $10200 for individual coverage and $27500 for a family plan. The tax is intended as a savings measure to prod employers and workers into more cost-efficient plans.
Certner said AARPs plans are currently under the threshold for the tax. We intend to stay below those thresholds he said. Its not in anybodys interest to move above those thresholds not the employees nor the employers.
AARP officials say the organizations public policy recommendations are made independently of other considerations including its range of business ventures from travel to insurance to publishing.
The 40 million-strong AARP represents people 50 and older including retirees on Medicare and Social Security. Its endorsement of health care overhaul came at a critical time last year days before a close vote on the House floor.
The impact on AARP employees is not a factor at all in our policy making which is directed at the impact on our membership and on all older Americans said Certner.
About 4500 people are covered by AARPs plans including employees dependents and retirees.
We supported the (health care) package because it contained incredibly important protections for our younger members who often have problems getting access to care said spokesman Jim Dau. And because it helps our older members in Medicare with important new benefits.
Starting in 2014 the overhaul law prohibits insurance companies from turning down people with medical problems and limits what they can charge older customers. It gradually closes the coverage gap in the Medicare prescription benefit and improves coverage for preventive care.
The Obama administration says changes required by the law so far have only had a minimal single-digit impact on premiums. Many benefits experts agree with that assessment but point out that the increases come on top of untamed health care inflation.
AARP warned its employees that more cost-shifting could be in store. AARP intends to make similar changes as necessary in the future to avoid the (health plan) tax said Hodges e-mail.
Current forecasts are that the overhaul will only have a small impact on job-based coverage slightly reducing the number of people who would otherwise be covered by employer plans. Those workers would have access to taxpayer-subsidized coverage through new insurance markets.
