By Patrick
Connole - June 6, 2016
If you were in charge of a U.S. health
insurer, what issue would make you lose sleep as you peer ahead to the rest of
2016 and into next year?
When a pair of consultants and a noted
lawyer were asked that question, they produced a list of challenges for health
insurers that amounted to a virtual gauntlet for carriers. These issues
extended from the political uncertainty with the November elections on the
horizon to the nuts and bolts issue of how well will Affordable Care Act (ACA)
exchanges function as open enrollment for 2017 begins in a short few months and
a lot in between.
Dan Schuyler and Sean Mullin, both
senior directors at Leavitt Partners, LLC, said top priorities for the
remainder of the year start with the fact many state individual marketplaces
will require significant increases in premiums to make up for the
higher-than-anticipated costs for members who have signed up for coverage since
2014. They say the inclination of regulators to allow higher rate increases in
addition to consumers’ willingness to pay higher premiums will dictate the
level of competition and health of the market.
From that point, they expect ACA
marketplace enrollment to continue to struggle in part due to the difficultly
of attracting and enrolling young and healthy individuals in marketplace
coverage. “For the young and healthy, the lack of robust subsidies and high
plan costs (premiums and deductibles) does not provide a compelling economic
incentive to purchase a health plan,” Schuyler and Mullin say. “Issuers are
also constrained by the essential health benefits, and they need the
flexibility to design health plan products that appeal to the specific benefit
needs across all enrollment demographics.”
Lurking as well is the seemingly
consistent threat of high prescription drug prices. The Leavitt consultants say
high-cost pharma continues to drive a larger share of overall medical cost
inflation. Both government and commercial payers also continue to be surprised
by significant in-year increases in specialty Rx costs that were not baked into
premium rates at the beginning of the year. Without further limitations on
in-year price changes, further government regulations may be necessary,
Schuyler and Mullin say.
And if ACA issues and drug prices were
not enough, there is the outgrowth of more providers leaping into the health
plan business. And increased self-funding in the group market, particularly
among smaller groups, may leave the fully insured group market with higher
costs and lower margins for carriers, they add.
Another voice in the health plan world
brings up the elephant and the donkey in the room: the elections. Thomas
Scully, former CMS administrator during the George W. Bush administration and
current senior counsel for the law firm Alston & Bird LLP, says even though
he is not sure anything of great substance will happen if Donald Trump wins in
November, the mere threat of his promises to repeal the ACA “will crater the
health plan markets.”
Scully adds that he doubts repeal will
pass Congress, but the stock market prices for publicly traded insurers will be
“ugly” in November and December if the Republican triumphs.
So, there you have it. A potential
President Trump, dwindling numbers on ACA markets, soaring drug prices and
providers turning into insurers — which of these is a true problem for health
insurers in the near term, and which will wash away with the next day’s
headlines?
https://aishealth.com/blog/health-plan-business/trump-v-clinton-aca-participation-rest-2016-puts-insurers-edge?utm_source=Real%20Magnet&utm_medium=Email&utm_campaign=97973089
No comments:
Post a Comment