- The health insurance marketplace created through the Patient Protection and Affordable Care Act has had a variety of success ever since its inception. This new model of healthcare coverage has provided health insurance for an additional 20 million Americans with many low-income individuals receiving premium subsidies from the federal government.
Additionally, the health insurance marketplace has become a platform in which new strategies can be implemented to reform healthcare coverage, according to The CMS Blog and Kevin Counihan, Health Insurance Marketplace CEO.
In prior years, before the Affordable Care Act became law, health insurance companies sought to cover the healthiest and least expensive consumers. Today, the ACA eliminated the pre-existing condition clauses, allowed young adults under 26 years of age to remain on their parents’ insurance plans, expanded the Medicaid program, and required payers to cover all preventive care.
Payers now are more focused on improving the value of medical care and moving away from the fee-for-service payment model instead of only sticking to insuring the healthiest consumers. Counihan described several examples in which health payers have begun implementing alternative payment models through the health insurance marketplace.
For instance, the major payer Aetna aims to have 75 percent of all their revenue be positioned in value-based care reimbursement contracts by the year 2020. At this point in time, Aetna actually has more than 800 contracts using value-based care reimbursement throughout 36 states, wrote Counihan.
Through value-based care reimbursement, healthcare providers are able to bring more focus on preventive care and identifying which patients are at higher risk of certain health problems. Care coordination is also strengthened when payers and providers work more closely together to achieve higher standards of care.
Additionally, it is expected that value-based care reimbursement will reduce the rising rates of healthcare spending often seen in fee-for-service payment models. Aetna is already seeing decreased costs that are 8 percent below average in areas with these contracts.
Blue Cross Blue Shield of Massachusetts is another payer that is showing results in a new payment system called the Alternative Quality Contract. This reimbursement model pays physicians based on quality, efficiency, and patient outcomes. The results show that the Alternative Quality Contract cut costs for Blue Cross Blue Shield while, at the same time, improving care among patients when compared to similar patients in other states.
Additionally, Counihan wrote about how the University of Pittsburgh Medical Center Health Plan in Pennsylvania and Intermountain Healthcare in Utah have both worked to improve care coordination throughout their provider networks. Nurses, social workers, and community health workers all came together to coordinate care more effectively under the guidance of the University of Pittsburgh Medical Center Health Plan.
“Intermountain Healthcare in Utah has placed behavioral health specialists within primary care offices,” Counihan wrote in The CMS Blog. “While it costs more up front, they’re finding that it reduces inpatient behavioral health admissions enough to lower overall costs in the long run while improving patients’ lives.”
“They’re calling this effort a ‘Total Accountable Care Organization,’ or TACO. It’s a health care system that cares for the physical health and behavioral health of its members, while tailoring its long-term supports and social service offerings for people with significant health needs.”
“These are just a few of the new ideas and innovative strategies that are being used – they’re what makes me so confident in the future of the Marketplace. And as this market continues to grow and mature, we’ll see even more stories of success as issuers in every state find new ways to provide reliable, quality, person-centered coverage for Americans and their families for years and decades to come.”
While the health insurance marketplace and the Affordable Care Act have incentivized health payers to move toward alternative payment models and value-based care, the ACA has also led to a steep increase in premium prices among payers operating through the exchanges due to the significant changes in the member risk pools.
The premium costs have risen in double-digits across 21 states this year. The premium prices of health plans sold on the insurance exchanges rose by 6 percent on average in early 2016.
State health insurance marketplaces could take the route that California took to stabilize the costs of premiums. In California, the health insurance marketplace contracted selectively among smaller groups of payers and negotiated premium prices. This led to a slower rate of growth in premium costs.
Despite some of the potential issues health payers are experience on the health insurance exchange, the marketplace does offer a number of great opportunities for insurers to improve healthcare quality and reduce spending by embracing value-based care reimbursement.