The Affordable Care Act, often called Obamacare, has had a powerful impact on healthcare organizations. But just as they’ve begun to settle into many changes, it looks as though continuing fallout will produce even more new challenges to the basics of how coverage will practically work.
For those in healthcare administration, the news is not rosy. More challenges to getting everyone covered will appear — creating more of the problem the legislation was initially designed to solve.
Back in April, UnitedHealthcare announced that it would exit most ACA state exchanges it had been operating in by next year. It will operate in only a “handful” rather than the 34 in which it now participates. UHC is the largest health insurer in the country.
According to the Brookings Institution, the direct impact wouldn’t be severe, because UHC focuses on group insurance and not policies sold to individuals. However, there are bigger implications because the event raises questions of whether insurers have adapted to the realities of the exchanges.
Of the 23 cooperative plans that were established, more than half have gone out of business and more may follow. These developments do not signal the end of the ACA or even indicate a crisis. They do mark the end of an initial period when exchanges were learning how best to cope with clerical challenges posed by a quite complicated law and when insurance companies were breaking into new markets.
Now there is a new phase with different challenges: “how to stabilize, expand, and diversify marketplace risk pools, promote local market competition, and encourage insurers to compete on product quality rather than premium alone.” The hurdles are certainly there for insurers and policy makers at the state and local level.
However, they also exist for healthcare organizations. Even as insurance companies try to balance rates, plan design, network management, and risk, providers will need to respond and react to every move. Some insurers will go out of business or withdraw from areas. Others may significantly raise their rates because they had kept them artificially low to win business in the first place.
There will be questions of how to extend coverage to those who need it, which means that care providers will have concerns about how to get paid. Fewer insurers will mean greater local market power for them and, potentially, less for providers. As rates increase, providers will need to help educate consumers as to the true and full costs of care and how to balance what they need and what they can or want to pay.
The solutions will be complex. Providers will depend on managerial astuteness and operational control to navigate the new waters and find ways to care for patients while remaining fiscally sound.
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