Back in late 2013, I wrote an article for this magazine speculating on the impact of the Affordable Care Act (ACA) on specifically small businesses as well as the health insurance marketplace in general. Now, having gone through two open-enrollment cycles under the ACA, I thought this year’s health care issue to be a great place to share some observations of what I’ve witnessed:
The HMO Stigma We’ve seen insurance companies offer significant discounts in pricing to entice enrollment into their HMO plans. However, these plans often come with a stigma in the minds of consumers, which relates to the HMO plans of a decade ago that required subscribers to obtain a referral from a primary care physician prior to seeking care from a specialist. These referrals are no longer required with the vast majority of HMO plans. And while the HMO network is typically smaller than a carrier’s PPO network and subscribers must stay within the network except in the case of medical emergency, we have found that the HMO networks in our area are replete with qualified providers and that the savings earned by moving to an HMO can be well worth the trade-off of having fewer provider options.
Shopping Your Care Ten years ago, people were far more resistant to changing physicians than they are today and consumers rarely questioned where their physicians were sending them for care such as imaging, lab work or outpatient surgery. Based on my conversations with customers, particularly younger consumers, the willingness to shop around for medical care is increasing.
Americans are some of the most savvy, price-conscious consumers in virtually every section of the marketplace, so it is encouraging to see it emerge as a trend in health care as it will lead to greater competition among providers and help stem the rising tide in medical cost inflation.
Further, health insurers often have different copays for different types of facilities, so it is important not to assume that your physician’s office has taken into account which facility would be best for you with regard to your ultimate final cost of care.
Affordability
In spite of the first “A” in the title of the ACA, I have not observed a huge impact in affordability as a result of the law. While the removal of the pre-existing conditions clause was a huge step forward in terms of providing coverage for all Americans, it came with a predictable pricing increase, particularly in the individual marketplace.
Further, the prospective tax penalty for those who fail to secure coverage is not yet substantial enough to have caused the major surge in health insurance consumption that was supposed to drastically drive down the cost of indigent care (expenses incurred by providers from those without coverage) that is passed on to everyone who has coverage.
Finally, the mandatory additional benefits coupled with the taxes on insurance carriers and self-insured employers included in the ACA obviously led to higher premiums. This is not meant to be a political observation, and I will be the first to admit that the ACA instituted some significant improvements to the health care system in general, but I remain hopeful that our elected officials in Washington from both parties can work together to improve on the affordability of the Affordable Care Act. One suggestion I would offer would be to make all health care expenses tax deductible, not just those that exceed 10 percent of someone’s adjusted gross income.
Unfortunately, the current debate between the parties seems mired in the discussion of repealing or keeping the ACA, a debate where the likely political outcome is the status quo. To date, neither party has appeared willing to begin the discussion of improving the law.
As a whole, we have not seen a major change among our business customers with regard to their willingness to offer health insurance as a benefit to their employees. That said, as the implementation and impact of the ACA continues to evolve, I’m sure we’ll see other trends develop and the status quo change.
Shopping for health insurance?
– Make sure to ask plenty of questions of your agent, insurance company and medical providers.
– Become educated about all of your health insurance options when purchasing coverage, and use that knowledge to be an informed consumer of medical care when the need arises.
BRIAN SCARBOROUGH is a Principal at Scarborough Insurance, an independent agency that sells all lines of insurance and has been serving the community since 1961. Visit scarins.com for more information.