What will the Future Bring for the Affordable Care Act?

May 10, 2016 - The future of the Affordable Care Act and health insurance exchanges may not be as favorable as the Obama administration had hoped. Many fear that the major health insurer UnitedHealthcare leaving the state-based exchanges could lead other payers to drop out. Additionally, the upcoming health insurance mergers between Aetna and Humana as well as Cigna and Anthem could lead to significant problems for the consumers, as premium prices of health plans could increase quickly.

With UnitedHealthcare dropping out of the Exchanges, some critics say the Affordable Care Act may not sustain all of its provisions well into the future. While the Affordable Care Act has decreased the number of uninsured Americans, the future may once again show that uninsured rates will rise if the individual mandate is struck down while the number of high-deductible health plans may proliferate around the country. Paul Ketchel, the Founder and CEO of MDsave, provided his perspective on the future of the Affordable Care Act in an exclusive interview with HealthPayerIntelligence.com.

HealthPayerIntelligence.com: How will UnitedHealthcare leaving the health insurance exchanges affect the marketplace and the operation of other health insurance companies?

Paul Ketchel: “When you look at UnitedHealthcare, it has built a really large business in the US administering government plans in general. These plans do not include just the exchanges but they’ve always been a big Medicare and Medicaid plan administrator.”

“UnitedHealthcare is really the industry leader in government plans. UnitedHealthcare leaving those plans will cause a problem with administering. Patients will end up with less choice probably and narrow networks. There will be less competition on some of the plan options that are available under the exchange in those markets.”

“I feel like UnitedHealthcare is such a major player in government plan administration that you might see other major carriers start to follow UnitedHealthcare. It also goes to the point that with UnitedHealthcare, their size and scale and the amount of scale they’ve had administering government plans, if they’re having a hard time making these plans profitable, I think it’s very likely it could be difficult for other large carriers to make their plans profitable.”

HealthPayerIntelligence.com: Will insurance premiums rise in state-based health insurance exchanges next year? If so, how will this impact the marketplace?

Paul Ketchel: “We’ve seen already exchange premiums rise over the last few years though not as dramatically as many people had predicted. However, anytime in the insurance industry where we have less competition and less choice, we see cost of plans rise because of the lack of competition but secondly because UnitedHealthcare has worked so diligently to try to make these plans profitable over the last five years and has been unsuccessful, I think you’re going to see other plans have to raise premiums as well in order to continue to offer those plans  as a profitable venture.”

HealthPayerIntelligence.com: Will the upcoming health insurance mergers be a blow for consumers? Why or why not?

Paul Ketchel: “I think that the mergers are really coming out of all the changes that are taking place. Because the risk pool has changed and the mandated coverage requirements have hit the industry, the insurance business is a much more difficult business to be profitable than it was before. So really, you’re seeing these merger-driven consolidations to try to bring the economy to scale and manage cost better.”

“I think that for the consumer, you will have possibly less choice and you’re going to see some higher cost. However, I think these mergers are going to keep plans and networks in place whereas without these mergers, we may have lost those networks.”

HealthPayerIntelligence.com: What can we expect for the future of the Affordable Care Act and its goal to provide coverage for as many Americans as possible?

Paul Ketchel: “What we will see from the Affordable Care Act is what’s already playing out right now. We’re going to have to see the mandated coverage requirements of the plans change in order to make these exchanges, options, and other coverage more affordable so that carriers can continue to provide that. I think the mandated coverage requirements are going to soften and go away in order to make sure we don’t lose carriers.”

“I think also, we’re going to see a trend where you’re going to have more options come on the market because we’re going to have to move back to having more individual plan designs versus mandated coverage designs in order to give lower premium options. For the consumer, what you’re seeing right now is that they’re paying more out of pocket for these high deductibles and out-of-pocket costs. I think that’s going to continue, but we can lower those costs by offering greater plan design options and being able to lower premiums.”

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