After nearly one and a half year of operation, the Affordable Care Act has made progress on the delivery of health insurance and the mechanisms of coverage. The uninsured rates are down, people are finding it easier to pay their medical debt, and most consumers are happy with the options available on health insurance marketplaces. While there are still a lot of areas for improvement, the progress in a short time period is commendable. At the same time, however, we are far from the concept of preventive care, especially in health insurance coverage and delivery.
Let’s begin with an example. A healthy 50 year-old American male who doesn’t smoke pays around $550 per month in insurance premiums. That’s roughly $6,600 paid to health plans operating under ACA marketplace. Now let’s assume that this healthy male employs all the preventive measures, such as regular workouts, controlled diets, and routine health checkups. If the individual continues to stay healthy due to his regime, the insurers will only have to pay about $200 per year for his care. In effect, that is $6,400 saved by the health plan for every such healthy individual. In terms of percentage margin, that is a whopping 3300 percent per individual for the health plan. It’s no wonder that a preventive care scheme will mature handsomely for health plans which stand by health and wellness programs.
That’s the reason why a large number of these health plans have started supporting gym memberships, vision care, and employer wellness programs through consumer discounts. Under Obamacare, employers and health plans have shown a preliminary shift toward preventive care through workplace wellness programs and attractive discounts for taking up such habits.
Let’s consider the average money a healthy individual earns for a health plan in America. For the calculations made above, each such individual will save upwards of $6,000 for the health plan. What if the health plans were to do away with those discounts and offer cash rebates on each preventive measure taken by the individual? Even if the health plans were to contribute $1,000 from the $6,000 toward cash rebates, it would function as a solid motivation for people who are currently not following any preventive measure. If by offering these incentives, if health plans are able to convert even 1 percent of their consumer base from reactive to preventive standpoint, the windfall from those savings would be huge.
No matter which way you look at it, cash rebates would beat the benefits of those discounts, thus getting more people to jump onto the fitness bandwagon. Get a yearly preventive exam done and get $200 as credit for prevention. Enroll with a gym membership and get $500 as credit. Get your children vaccinated and get $100 for the prevention. Add all of that together and you have substantial savings for each healthy individual, who in turn would exemplify the concept of prevention for the entire nation.
Under the Affordable Care Act, these incentives are easily implementable. For instance, if health insurers want to keep a track if their consumers are actually walking the recommended miles each day, they could just connect them with an app that keeps a track of their workout regime and feeds that back into the system for calculating the cash rebate. With existing health insurance technology, this is easily realizable and very cost effective for tracking, measuring, and rewarding enrollees who prescribe to preventative care. In effect, this system could speed up the transition to a state of preventive care and could share the windfall of good health behavior between consumers and health plans, all on the backbone of the Affordable Care Act.