Covering all preventive tests leads to higher utilization, costs

As insurers are covering more preventive tests and screening, as required by the Affordable Care Act, two financial experts question whether such coverage actually incurs additional costs for the companies.

The ACA directs insurers to pay for more preventive care because early diagnosis of diseases and conditions can save money in the long term. The problem, however, is that for preventive tests to actually save money, the procedures must be priced very low, have long-lasting benefits and an unlikely occurrence of side effects, according to the Daily Progress.

One of the biggest hurdles to making preventive care coverage economically beneficial is that they're now free for all insured consumers, David John Marotta, president of Marotta Wealth Management, wrote in the article. That fact alone removes all incentive for providers to competitively price screenings and tests, thereby further incurring costs for insurers.

What's more, covering preventive tests and screenings is best applied for certain consumers, including those with genetic predispositions for some illnesses and diseases. Using a colonoscopy as an example, Marotta argued that it's better if only people with inflammatory bowel disease or a genetic predisposition to colon cancer are encouraged to undergo the procedure.

But, incentivizing the general public with free colonoscopies doesn't lead to less cancer; it simply drives up utilization rates and costs. "Efforts at prevention have significant costs when massive numbers of healthy people are screened who require no treatment and often receive no benefit," Marotta wrote.

Another complication with the ACA's preventive care coverage requirement is that insurers are interpreting the provision differently. For example, when consumers get a free colonoscopy that reveals polyps, do insurers have to pay for their removal? The ACA doesn't specifically explain what insurers must cover, FierceHealthPayer previously reported.

To learn more:
- read the Daily Progress article