- The Affordable Care Act has brought a significant reform toward the health insurance industry. This particular legislation has given the majority of American people healthcare coverage, which has put greater strain on health insurers. For example, the state of Texas has gained a much greater amount of insurance options for its citizens due to the Affordable Care Act and its provisions.
A study hailing from Rice University’s Baker Institute for Public Policy and the Episcopal Health Foundation (EHF) discovered that Texans had less trouble paying their medical bills in 2015 when compared to 2013. The number of nonelderly Texas adults that had problems with paying their medical bills fell from 25.8 percent to 22 percent.
“There is a lot of consternation about high deductibles and narrow networks which are of concern, but you have to remember that we have about one million more people who have insurance over the last two years than previously,” Elena Marks, EHF’s president and CEO, told HealthPayerIntelligence.com.
“While there is a lot of room for improvement in the coverage they have, compared to no coverage, it’s a huge opportunity for many, many families,” Marks explained. “Much of the insurance data that came from HHS a week or so ago shows 1.1 million Texans [are enrolled] in marketplace plans and, obviously, those plans didn’t exist more than two years ago in the Texas individual market.”
“There was a very weak individual market in Texas before the Affordable Care Act. While one million of those who bought Marketplace plans in 2015 were not necessarily uninsured previously, a chunk of them were.”
How the Affordable Care Act affected employers
This shows how health insurance companies throughout the state of Texas as well as the rest of the country are affected by the Affordable Care Act. Businesses and employers have also been attempting to unravel the complexities of these new regulations with regard to health insurance.
For instance, the Cadillac tax and the employer mandate are making an impact on the health plan choices of businesses around the country. Jenny Kerr, Senior Analyst at Decision Resources Group, provided additional information to HealthPayerIntelligence.com about the Affordable Care Act and employer decisions in health insurance plans.
“The Cadillac Tax was delayed for a couple of years right at the end of 2015. That’s pretty new, but throughout the year of 2015 employers have been really studying this and trying to figure out if it’s going to affect them,” Kerr explained.
“A lot of them – I’ve seen different percentages of surveys and some of them say half – this was when it was going to implemented in 2018, half of them were going to get the tax if they didn’t change their plans.”
“Most employers were already starting to look at this and starting to change plans to either narrow networks, consumer-directed health plans or high-deductible health plans. That switch has been happening and will continue to happen even though it’s now delayed,” she continued.
“The main high-deductible plans and defined contribution plans [are] growing because of the Cadillac Tax,” Kerr concluded. “[The Affordable Care Act] has affected all employers very differently and especially by region. Healthcare is local so premiums and costs are affected by so many things. As far as healthcare costs, in general, for employers, prices are always going up.”
How health payers can comply with the ACA
HealthPayerIntelligence.com spoke with Doug Schneider, President and Chief Product Officer at Connecture, to learn more about how the Affordable Care Act has impacted health payers around the country.
When asked what solutions health payers should follow when attempting to comply with the Affordable Care Act and other federal regulations, Schneider replied, “Basically, we’re in the business of providing people with platforms where they can select and enroll in health insurance.”
“What we’ve seen in our market since the adoption of the Affordable Care Act is a significant trend towards the health plans outsourcing those kind of technology solutions to people like us and the people that we compete with.”
“I think that they get a couple of things out of that. One is that they reduce their administrative cost,” he continued. “But the other thing they do is that they can hold the supplier like Connecture accountable for regulatory compliance and make sure that they’re presenting the plans in a way that’s compliant.”
“They’re essentially increasing their assurance that they’re going to be compliant with the regulations. Those are some of the ways that the Affordable Care Act has impacted them into ways that they can better comply with it.”
“The other effect of the Affordable Care Act is that it’s resulted with some commoditization. They have more bounded choices to offer. Rather than more choices, they have to comply with the regulations. It forces the health plans to differentiate in other ways like customer service, the consumer experience, and the quality of their provider network because the products look a little more like each other than they ever used to.”
Consumer engagement tools vital in health insurance industry
Meaningful use requirements and healthcare reforms have also brought greater adoption of electronic patient records and patient or consumer engagement tools. The President and Chief Product Officer at Connecture spoke about consumer engagement and new technologies that could lower healthcare spending.
When asked what best practices health insurers should follow in order to keep their consumers engaged and satisfied with their services, Schneider answered, “I think there are a couple things. The first is it’s important to personalize the information to the consumer. Consumers really only care about what’s relevant to them. So how much out-of-pocket are they going to spend on health insurance? Is there a physician in the network that they’re selecting?”
“Personalization is an important part of the equation here. The second thing I would say is that ease of use is critical. When we survey consumers, we find that most of them want to be independent when they’re selecting their health insurance but they generally need better tools in order to do that.”
“I’d say personalization and ease of use [is important]. Also, consumers don’t necessarily want a whole bunch of options. There is such a thing as too much choice. We’ve done surveys that say if you present consumers with more than 10 choices, they are overwhelmed. The third thing they probably want is to be presented with only choices that are really relevant to them. Maybe underneath that, they have an expectation that the health plans or who they’re buying from is going to screen their choices before they make them.”
When asked what type of tools and capabilities health insurance companies should adopt in order to reduce their healthcare spending, Doug Schneider responded, “There are a couple of things health payers can do. One is they need to route consumers to the right choices for them. For example, if you can collect somebody’s prescription drug information, you know a lot about who they are and what kind of other healthcare services they need.”
“Then you can help minimize healthcare costs because, if you understand what underlying conditions they have, then you can start to route them to the right place from a care management or medical management perspective. It goes a little bit with personalization, but it’s basically about getting the consumer to the right kind of care at the right point in time.”
“Secondly, the insurance companies accepted that they can reduce their administrative cost, but now they can spend more on medical cost. Part of what we do is if a consumer makes a decision through an automated system where they buy health insurance, for example, and they’re using technology, the health plan is effectively reducing their call center cost because the consumer is spending less time on the phone with the call center and more time just using technology. That enables them to reduce their administrative cost and actually spend more on medical and care for the consumer. Those are a couple of clear ways that they can reduce cost,” concluded Schneider.