The Affordable
Care Act is making great strides in improving America’s access to health
insurance; however, this is also creating new challenges for health plans.
Below, I’ve outlined some of the pressing challenges health plans are facing
and will identify potential solutions in an upcoming post.
Management of the health care of
formerly uninsured patients who may have more complicated care needs
The
influx of new consumers with difficult to manage conditions is requiring plans
to implement population management and look at unique ways to manage the health
– and cost – of these patients. It is also important for these patients to have
plans that cover preventive oral health care on an ongoing basis, as chronic
disease correlates strongly with dental hygiene. The role of dentists in
managing chronic disease is explained in my recent blog post here.
On-going costs associated with
sustaining and continuously improving new systems
Whether
considering introducing a new ancillary line, expanding capacities in a new
market, or finding administrative efficiencies, it is important for health
plans to evaluate the time, scope and money required. This analysis leads to
three potential solutions: build, buy or partner. We’ll dive into the benefits
of partnering in my next blog post.
Regulatory pressure is increasing and medical
loss ratio (MLR) requirements are placing additional burdens on margins
The Medical
Loss Ratio requires insurance companies to spend at least 80% or 85% of premium
dollars on medical care and new provisions are imposing tighter limits on
health insurance rate increases. Failure to meet these standards triggers a
requirement that insurance companies provide a rebate to their customers. As a
result, health plans need to find a way to grow their market share without
significantly increasing their administrative costs.
The costs associated with the need for
investments in advertising and marketing, customer service, and IT and
enrollment systems to prepare for the surge in consumer demand.
To
capture and manage the influx of new consumers entering the market as a result
of the Affordable Care Act, insurance companies are investing in marketing,
advertising and IT, and will have to continue to develop more comprehensive
outreach programs.
In
addition, the growth is requiring the industry to explore new ways to
communicate, interpret and store information, requiring the dedication of
resources to test, acquire, and implement the latest technological innovations
which likely includes mobile technologies to reach patients wherever they are.
As members’ financial situations change,
the channels by which they access insurance will change as well.
Churn
is a term often used to describe people moving back and forth between health
insurance plans. For example, people often move between eligibility for
Medicaid and eligibility for federal subsidies for private insurance bought on
the ACA’s exchanges. Churn in the market increases costs, making it imperative
to create products that can be easily managed regardless of how the member
accesses benefits. The process puts pressure on already strained health plan administrative
resources.
Healthcare
has made significant advancements under the ACA; however, we need our systems,
regulations and business models to evolve to ensure we can remain as productive
and effective as possible.