April once again brought Windham to the National Other Party Liability Group (NOPLG) Conference, hosted in sunny Scottsdale, AZ. A top concern among healthcare payer leaders this year was, of course, the impact of big changes to the Affordable Care Act (ACA) made late last year. Though payers braced themselves over the winter for the changes, now with 2018 fully underway and a clearer picture of actual impact available, payers are assessing what other changes they need to make, specifically in preparation for open enrollment later this year. Legislative changes to ACA are set to impact payers in four major ways:
Citing desire to give subscribers more choices when selecting health plans, the individual mandate and cost-sharing reductions (also known as subsidy payments) were stricken from the ACA in 2017. These subsidies were one of the ways payers were able to offset the costs of required discounts offered to moderate-income subscribers. Though the subsidies are gone, the discounts must continue to be offered.
With the ACA’s individual mandate repealed under last December’s passed tax bill, starting in 2019, individuals will no longer face a tax penalty if they don’t enroll. A rising fear is that healthier people will opt not to enroll in healthcare plans leading to destabilized risk pools.
Payers must now determine what the best course of action is for them to reduce losses associated with these changes. Increasing premiums is an obvious and likely option. Premiums could increase as much as 30%. Some may also weigh whether it’s more advantageous to drop their individual health plan offerings from state exchanges where poverty levels (and healthcare discounts) are highest. However, this can increase financial strain on the remaining payers, forcing them to raise premiums or also drop out of the exchange. This could leave some states without any options for individual plans–particularly those states with higher poverty and unemployment or underemployment rates.
Short-term coverage acting as long-term coverage
The executive order signed by President Trump last October, in part, increases the length of time association health plans (AHPs) can cover individuals. Once structured as short-term coverage, the executive order allows AHPs to be bought and used as a long-term alternative to regular health plans. It also allows for individuals to pay for AHP coverage with health reimbursement agreements like HSAs.
Like with the repeal of the individual mandate, this provision could destabilize individual market insurance by unbalancing risk pools as healthier people are more tempted by AHPs because of their lower costs and they don’t necessarily need essential health benefits (EHBs) that less healthy subscribers do.
Medicare reimbursement obstacles rise
Though not directly tied to the changes the ACA saw last year, the changes have increased challenges for Medicare payments and reimbursements, putting additional strain on payers and consumers alike. Overcoming these obstacles begins with better Medicare screening and educating patients on the benefits of supplemental insurance. It also requires providers to be more in sync with payers’ goals by facilitating more sustainable and accurate appointment registration to collect essential bill and payment processing information while also committing to timelier patient follow up.
Increased subscriber confusion and questions
Many subscribers still don’t fully understand what these changes mean for them and their families until they receive an estimate for service or a bill. That can translate to more calls to customer service, especially as open enrollment approaches. Picking an outsourcing vendor who stays up-to-date on these kinds of legislative changes can make all the difference in explaining coverage and costs to existing and potential subscribers to ensure they’re selecting the most appropriate health plans for their needs.
While these changes aim to increase competitiveness and to give people who buy their own insurance more options to choose from, some of them are forcing payers to reevaluate costs and plan coverage in order to remain profitable. Still, more changes are expected throughout the year as spending bills and budgets are reviewed, so it’s become essential for payers to monitor impact on subscribers and to find better ways of educating them on the changes.