SHOP Exchange Part I – What is SHOP and Why We Need It?
While the state sponsored Health Insurance Exchanges (HIX) are at the helm of most health reforms related discussions, the SHOP exchanges are an equally critical piece of the health reforms debate. By January 1, 2014, not only the HIX but also the Small Business Health Options Program, commonly referred to as SHOP is scheduled to become operative.
Traditionally, small businesses pay 18% more than large employers for the same health insurance policy. Health coverage providers too, may charge different premiums from small employers based on their previous health claims and the industry that the small employer operates in. The disparate rates resulting from high broker fees, fixed administrative costs and adverse selection tend to adversely impact the small businesses and their employees.
Insurers Enjoy a Hike in Operating Margins and Medicare Revenues
Insurance companies, which had once spent millions to repeal the Healthcare Act fearing that the Affordable Care Act will adversely affect their businesses subject to increase in healthcare costs and reduced coverage, witnessed a surprising upturn in their profit margins. A report released in October 2011 by the Government Accountability Office (GAO) proved that contrary to popular reservations, healthcare law aided insurers in garnering increased Medicare revenues and appreciable profit margins.
The report collected and compared financial performances – 18 months before and after the healthcare proposal was signed into a law – of some of the top health insurers in the U.S., such as UnitedHealth Group, WellPoint, Aetna, Humana and Cigna.
A World of ACA Minus the ‘Individual Mandate’?
Can the Individual Mandate clause be really dissolved without seriously harming the rest of the law? If yes, then what can be the possible ramifications of such a Supreme Court ruling?
A group of 103 economists filed for an amicus brief that insists that the Individual mandate clause is so inextricably intertwined with the rest of the Affordable Care Act (ACA), that it cannot possibly be severed from the ACA. Our curiosity piqued, our team at hCentive tries to envision a U.S. health industry without an Individual mandate directive.
Listed below are some of the possible consequences of an ACA without its Individual mandate.
State Exchanges 2014 Readiness Status: An Interactive View
January 1, 2014 is a date that evokes mixed emotions among the people in the U.S. healthcare industry. January 1, 2014 is the deadline by which all U.S. states are required to have fully-functional, federally approved Healthcare Insurance Exchanges – the web-based one-stop platforms for residents to search, compare and buy healthcare plans.
Top 4 healthcare trends of 2012
With several final rulings on ACA mandates, numerous takeovers and acquisitions, 2011 has proved to be a sprightly year. The U.S. healthcare landscape is marked for change again in 2012, as the Supreme Court announces its ruling on ACA’s constitutionality, thousands of baby boomers become eligible for Medicare and more insurers, physicians and providers enter into collaborative partnerships.
Here are some of the top healthcare trends that we believe, will affect change in 2012.
Increased enrollment in Medicare plans
The Medicare Advantage plan segment is expected to observe explosive enrollment figures in 2012. The very first baby boomers turned 65 on January 1, 2011. Over the next year, every day, thousands of baby boomers will reach the age of 65 and become eligible for Medicare plans. With hundreds of thousands of projected enrollments in 2012, the Medicare sector will see a significant boom.
Why We Are Bullish on the Disruption of the Healthcare Industry
The debate about Healthcare reform is unending and complex. We, at hCentive, have been following both sides of the debate keenly and acknowledge that the reforms are not an all-encompassing solution to all our problems, as is most often the case with other proposals in other industries.
But what we firmly believe in is the fact that the Healthcare Insurance industry; nay, the entire health care industry is riddled with inefficiencies. Inefficiencies owing to factors such as lack of technology use, too many middlemen, complicated laws etc., are contributing to the increasing cost of healthcare that every American is facing today. The industry has been ripe for disruption for a while now and the end beneficiary will be the consumer.
De-bunking the Fears Surrounding the Medical Loss Ratio Ruling
Most investors consider Medical Loss Ratio as the most important factor to gauge an insurance company’s present and future profitability. On December 2, 2011, HHS released its final ruling on the Affordable Care Act’s Medical Loss Ratio policy. Beginning 2012, the revised policy guarantees tax-free rebates to consumers if the percentage of premium spent on medical care and quality improvement by their insurers, falls below 85% in larger group insurance sectors and below 80% in the small and individual insurance markets.
Visible impacts of ACA’s standardized Medical Loss Ratio ruling
Availability of precise data
Before the latest MLR ruling, it was difficult to obtain financial reports or enrollment data for individual, small groups and large group markets, even more so at the state level. Unavailability of data made comparison among health plans difficult which further made the insurance process seem impervious. The Supplemental Health Care Exhibits documents issued by NAIC requires uniform reporting standards to be followed that will make it easier to:
Obamacare Helps Insure 2.5 Million Young Adults
An issue brief released December 14th 2011 by the U.S. National Center for Health Statistics, establishes that the Affordable Care Act of 2010 has managed to secure health insurance for 2.5 million American youths.
In the U.S, young adults have traditionally been less likely to possess health insurance and before Obama’s healthcare overhaul, most were likely to be dropped from their parents’ dependent children coverage, as soon as they turned 19 years old.
Private Exchanges will boost Healthcare Reform
The establishment of the State Health Exchanges by 2014 may prove to be one of the more radical steps taken towards re-organizing the scattered and chaotic U.S healthcare industry. The state exchanges will serve as a central health care marketplace with the primary aim to empower small employers and individuals, to access, search, compare and purchase health insurance.
The purported efficacy of the state exchanges has inspired many health industry players like Walgreens with presence in many U.S states, to consider setting up their own private exchanges. Built on similar lines as state exchanges, these private health exchanges will serve as a one stop healthcare marketplace for their clients spread across different U.S states. Once set up, such private exchanges will help these private healthcare giants market and sell all their available health insurance plans at a single location, thus facilitating easy comparison and selection from a multitude of available options.
Health Care Innovation Challenge – envisioning improved medical care at lower costs
A successful government is one that learns from its’ past mistakes, infuses fresh ideas into the present and maintains a sharp eye on the market to prepare well for any probable future exigencies. The Obama administration faces an un-predictable future in the healthcare sector, as is evident from the study conducted by American Association of Medical Colleges. As per the AAMC research, US may be short by over 91,000 doctors in the next 10 years, with the worst spell expected to be around 2019-2020.
For the U.S Government, the need of the hour is to rake through the country’s healthcare industry and sift out compelling projects, ideas or successful community initiatives that can be instrumental in dealing with the imminent shortage of the number of practicing physicians over the next 10 years.
