Be Prepared for Disruptions in the Health Exchange Market
Beep...beep...beep...can you hear the "reverse" warning? Someone's backing up (or out, as the case may be).
The future is unclear for the nation’s health exchange market. And that might just turn out to be an understatement. Last month, the nation’s largest health insurer called into question its future in public insurance exchanges, the latest signal of major concerns about the online marketplaces that have helped the Affordable Care Act extend coverage to millions of people. UnitedHealth Group announced that it will scale back marketing for plans it sells on the exchanges and decide next year whether it will even stay in that business in 2017. It also cut its 2015 earnings forecast.
According to Morningstar analyst Vishnu Lekraj, insurers are struggling to attract enough healthy customers into their still-new exchange coverage to balance sicker patients who signed up for coverage quicker because they use a greater amount of health care. In the case of United Health, the company agreed that it was seeing an increase in losses because there aren’t enough healthy customers to offset the sicker patients in the exchanges.
Health Data Management further substantiates these results, stating that, because healthcare demand is greatly exceeding expectations, losses have mounted across the nation for many Affordable Care Act exchange health plans, leaving some to pull out of the insurance market completely.
However, the exchanges may not be on the verge of collapse. Enrollment for 2016 coverage started November 1, and more than 1 million people signed up or renewed coverage in the first two weeks, according to the Obama administration. Insurers may start attracting more healthy customers to their exchange business in the coming years because a penalty that the overhaul imposes on those who remain uninsured will grow, Lekraj said. Most of those prospective customers will buy coverage with help from income-based tax credits.
Exactly how this uncertainty in the insurance market will affect your revenue cycle is unclear at present, but here are a few outcomes/observations:
For the patient population, confusion will prevail. As a result of payers moving in and out of markets, consumers will be forced to transition in and out of plans with different costs and new networks. And they may very well find themselves in a gap, paying out of pocket.
Backing out of healthcare exchanges will become a trend (following UnitedHealth’s lead) for the plain and simple reason that insurance companies are keenly interested in making a profit.
The ACA doesn’t address all the problems that it was intended to solve, so these issues may only be the beginning.
We’ll keep you posted with more information as this situation unfolds in 2016.
In the meantime, check out our offer below for your next steps to improve your bottom line!