The Affordable Care Act was intended to bring health insurance to a wider range of people. The legislation became a mandate for the entire industry and a regulatory force that affected every healthcare provider.
However, nothing is ever absolutely certain, including the impact of legislation with the full force of the federal government behind it. Healthcare industry leaders are again learning that strategy needs enough flexibility to change as conditions do.
Take the idea of health insurance co-ops. The ACA as initially conceived allowed for a set of non-profit insurance providers that could bring insurance at even cheaper prices to those who, either out of need or inclination, were particularly cost conscious. Cutting the profit motive should have allowed those agencies to reduce insurance costs by the amount that would otherwise have been net income.
The co-ops did not work as planned. In fact, at the beginning of November, the Obama administration admitted during a House Ways and Means committee hearing that eleven of the 23 co-ops, or nearly half, were or would be folding.
For co-ops that will not sell coverage on the marketplaces in 2016, CMS is working collaboratively with [state insurance offices] and the co-ops to wind down their operations in an orderly way, while minimizing disruptions to consumers,” [Mandy Cohen, the chief operating officer of the Centers for Medicare and Medicaid Services] told Republican and Democratic lawmakers.
Trying to predict the vagaries of the healthcare market has been difficult enough. However, the implosion of so many insurance co-ops shows that virtually any aspect can suddenly shift, creating an impact.
For example, many hospitals and doctors aren’t on the provider networks of the ACA plans, whether due to a decision by the insurer or the providers themselves. That may seem like a blessing in disguise because reimbursement through the low-cost plans can offer reimbursement levels that are lower than usual.
But there could be reactions that affect providers. The administration currently does not have the legal authority to compel doctors, hospitals, and others to take part in the insurance plans. But what if that changed or the government found other ways to put pressure on providers? Even should that not come to fruition – and, realistically, it seems unlikely – there is still a problem for the entire system if, as U.S. News reported, people with insurance through the exchanges have a difficult time finding providers who take it or face significant out-of-pocket expenses that they can’t afford. Providers then face trying to collect from people with little money and the health of the greater community is compromised.
There are no answers, just additional questions for executives to ask while running through what-if scenarios and creating alternative strategies.
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