New health plans will go out of business. Long-time players will find themselves losing share and priced out of markets. Some Co-ops will be too aggressive and underprice coverage, and those that push it too far will be gone.
Others will focus on narrow networks, use their financial wherewithal to build systems and staff expertise, manage medical aggressively and carefully, build strong relationships with selected providers and deliver service that delights their members.
“Our whole strategy has been to invest heavily in medical management because at the end of the day, we can’t make money the way we used to, which is to conservatively underwrite this population…. Financial people [at large carriers often] don’t understand the difference that real care management can make. Conservative underwriting is how carriers have made big profits in the past.”[emphasis added] That’s a quote (subscription required) from the CEO of a New Mexico Co-op health plan, and I could not agree more.
The health insurance business is no longer one where success is driven by risk selection; it is now driven by medical management. Yet many legacy health plans have yet to fully embrace the new market dynamic, relying far too much on benefit design, variations of old-school underwriting and risk selection. Sure, they THINK they’re adapting and changing, but they aren’t moving fast or far enough.
Those who don’t understand what’s happening will blame “Obamacare”, not understanding that the Affordable Care Act is having precisely the effect it should; generating competition on a level playing field, rewarding innovation and aggressiveness, penalizing complacency and traditional approaches.
What does it mean for you?
It’s working.
It may be working as it is written, but it is written poorly for those who are unemployed, white-collar professionals who live in states not taking Medicaid, and who don’t want Medicaid, but rather fully paid health insurance like everyone else.
Trying to get a congressional office to understand that a law that lumps educated, white collar professionals into the “low-income” category, and thus should go on Medicaid or go with a sub-standard version of health care does not mean it is working. It means that lawmakers believe that those who have some income are better than those who have none, even if they are more skilled, and therefore should get the worse form of care, not the form those receiving credits or subsidies are getting.
It ain’t working for me, Joe, and I’ve complained to my congressman’s office for two years now.
This has convinced me that single-payer is the way to go, and to hell with the insurance companies.