Mississippi is one of the poorest states in the nation, and its residents will pay some of the highest premiums under a federally run health insurance exchange, the Associated Press reported Wednesday.
Feds: Mississippians will pay among steepest Obamacare rates in US
September 26, 2013
IMPLEMENTATION OF THE ACA IN 2014
From Managed Risk to Manged Care:
Insurers confront a New Reality
May 27, 2014
With much speculation swirling around 2015 premium increases, Managed Care organizations are wading through early claims data to assess their new Exchange enrollees. According to AIS Health, initial claims data from two PBMs, Express Scripts and Prime Therapeutics indicate higher utilization of expensive specialty drugs and more 90-day Rxs than the average of their privately insured enrollees.
While this data does not come as a surprise to some, it is a harbinger of the reality of the insurance mandate in both the Health Exchange and private commercial insurer markets. Add to this the "Risk Adjustment" provisions of the ACA that require either government or private insurer transfer payments between insurers, relative to the amount of risk in their customer base, and a new paradigm emerges: In order to make money, insurers cannot simply sign up more healthy patients to compensate for sicker ones, they actually have to improve patient outcomes to grow their profits.
In response to this new reality, insurers have taken two paths forward. The first path has been to "risk-share" with providers in the form of ACOs and other types of risk-based incentive structures that pay for performance. The second path has been to steer clear of these new forms of risk by staying out of Exchanges and aggressively pursuing administrative service roles that are more transactional in nature. These roles take the form of providing administrative support for self-insured plans and "stop-loss" coverage for employers who want to self-insure but don't want to take on all of the risk. Only the regional Blues plans appear to have gone "all in" on both paths, largely due to the nature of their customer base and its concentration in the small group and individual insurance markets.
What types of investments are insurers making to profit in the new landscape? Their biggest focus has been in primary care. From the purchase of physician practices to the sharing of data, these insurers see their futures as dependent on creating competitive advantage by significantly improving the coordination of primary care. A big push towards Patient-centered Medical Homes, in addition to ACOs, is occurring that promises to reshape how costs are managed and how value is rewarded and reimbursed across direct providers, pharmaceutical manufacturers, and medical services companies.
With minimum Medical Loss Ratios firmly in place and limits placed on insurer ability to "game" the "risk pool", the ACA appears to be dividing insurers between "risk avoiders" and "risk managers". For-profit insurers especially seem to be divided along these lines
What operating model will be rewarded? If past history is any indication the winners will subscribe to the mantra GO BIG OR GO HOME. Those insurers that go "all in" and apply learnings from their previous experience with expansion of government programs should succeed in weathering the early influx of sicker patients. The successes of United Healthcare in Medicaid and Humana in Medicare offer examples of weathering the storm. And this time around the risk is far less as the ACA indemnifies some of the cost of making a big bet.
Healthcare Reform 101: Obamacare FAQs
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