Large insurers leaving the ACA party early is threatening to undermine the mechanics of how the legislation was designed to operate during a ten-year implementation period. The unraveling began in 2015 as numerous carriers showed significant losses on their blocks of businesses in the ACA marketplace, and the recent announcement by United Healthcare that they are exiting several states could spell the beginning of the end of choice for American consumers of healthcare.
Should a total United Healthcare exodus happen, the hardest hit will be consumers in rural counties, and in particular those in the South where limited choice in the individual marketplace is most prevalent. The non-partisan Kaiser Family Foundation recently found the net impact of United Healthcare exiting the individual marketplace totally would leave 532 counties with just one or two insurers on the exchange.
Dozens of companies have lost money in the “Obamacare” exchanges as many individuals with pre-existing conditions enrolled in coverage with approximately 8/10 receiving some sort of financial assistance according to CMS. This means that taxpayer funds were used to cover some of the cost for these folks which is fine, but only if costs do not skyrocket.
Former head of the Centers for Medicare and Medicaid Services, Marilyn Tavenner, whose new positon is the head of the trade association in charge of lobbying for insurance companies, got out the crystal ball recently and predicted premium increases in 2017.
Meanwhile, on the political front, former presidential candidate and Florida Senator, Marco Rubio, opened up the door months ago for insurance companies to have no choice but to leave certain states because the financial assistance they have received the past two years will expire.
His push at the end of 2015 to end insurance company “bailouts” in 2017 added fuel to an already roaring fire.
The impact on the marketplace is simple, if there is no funding for sick individuals and insurance companies are unable to attract healthy individuals into their plans, then we can expect to be carrying around less take-home pay per month because premiums are going to rapidly increase. The more they lose, the worse it will be, and if healthy people are priced out then prices could go up even more.
One question is, what if anything will this do to employer sponsored plans as public perception erodes for these large and sometimes now “mega” insurance companies?
My prediction is it will be negative, and opportunities are now presenting themselves as a result of the changes in the fully-insured marketplace.
As one wonders if it is worth it from a business perspective to be in a community rated plan due to less control and higher administrative fees, self-funding has become a more attractive option for employers who want to better manage health care costs and level out renewals.
The main reasons for this shift in plan design has a lot to do with the regulations imposed by the ACA on fully-insured rates and benefit options which have directly led to much higher premiums than you can enjoy under a less-regulated self-funded plan.
The essential key to having a quality, affordable self-funded plan is working with an experienced TPA that can share claims experience, trends, cost-saving strategies and help manage prescription costs. Employee education is also important.
E.D. Bellis provides all of these TPA services along with a team of experts to manage all of compliance and HR needs.
If you would like to learn more about how this or other innovative strategies could help your organization save money, connect with us directly at firstname.lastname@example.org.
On America’s Healthcare Challenge, the weekly radio program produced by E.D. Bellis, we have extensively covered the rapid changes in the insurance industry.
The program features numerous talented national guests, and they all have predicted 2017 being a monumental year for the future of the Affordable Care Act. Prepare yourself for what is coming by listening to our latest podcast and check out more on a rapidly changing healthcare industry on healthreformexplained.com.