Health insurance in America has changed dramatically in the past few years, changes that will speed up once the Affordable Care Act (ACA) major provisions take effect in 2014. It’s easy to be sucked into the details of policy change, from payment reforms, to Accountable Care Organizations (ACO), to progress on the Health Insurance Exchanges (HIX), sometimes called marketplaces.
Those who want to step back for a broader look at the health insurance market should turn to a crisp new report from Deloitte University Press called, “The future of health care insurance: What’s ahead?”
A Look Ahead at the Health Insurance Industry:
Deloitte’s report starts with a quick history of the health insurance industry in the U.S. Basically, it began as hospital insurance, which is also how the Blue Cross health insurance plans started. Deloitte also describes the rise in employer health plans after World War II. Employer-sponsored insurance (ESI) covers roughly half of Americans today.
The report quickly shifts to an well-written summary of changes in the health insurance market and how they will play out. Here’s an overview of how Deloitte sees the future of health insurance:
1) Enrollment in Publicly Subsidized Health Plans will Increase Dramatically.
Part of the growth in the health insurance market is thanks to the Affordable Care Act. Starting Oct. 1, individuals will be able to sign up for coverage through the Health Insurance Exchanges. Those earning between 100 percent and 400 percent of the federal poverty level could be eligible for premium subsidies, and the individual mandate takes effect on Jan. 1, 2014. Other trends also contribute to increasing enrollment, including the continued growth of Medicare Advantage and Medicare drug benefit plans. Health plans based in the U.S. also might reach out to growing health insurance markets abroad.
2) Health Plan Consolidation will Continue.
Health insurance is a relatively low-margin business. Increasing competition and pressure to keep costs down could drive more health plans to merge, as could potential to capture new foreign markets. Deloitte counted 36 health insurance mergers and acquisitions in 2011.
3) Health Insurance Products will Become More Diverse, Complex.
Additional data about their enrollees could allow health plans to tailor offerings to individual needs and to track payments with outcomes. There is also a shift toward managed care for the chronically ill, for example through private Medicaid health plans. Some insurers have teamed with providers to form Accountable Care Organizations and medical homes, two models that seek to increase quality and reduce costs. Payment reforms have exploded in the past few years, which changes the basic mechanisms for health insurers to pay providers.
4) Health Plans can Offer Consumers Security and Access to Care.
Essentially, Deloitte believes health plans have an opportunity to build trust with consumers by becoming more transparent and helping to protect them from the risks of massive health costs, while also ensuring access to care when they they need it.
Read the Deloitte report here.