2014 health insurance outlook: 7 predictions

The health benefits community has been waiting for some force — a shift in employer preferences, a shift in insurer strategies, an upheaval in Washington or state capitals — to drop a hammer and smash everything to bits for decades. 

People have been watching for the hammer ever since managed care organizations came along and smashed Indemnity Plan World.

Preferred provider organizations came along and loosened the grip of the health maintenance organizations, and health savings accounts came along and slowly revived the concept of imposing a meaningful deductible. But Managed Care World puttered along, never really changing in any dramatic way.

Cost increases slowed a bit, but costs kept rising. Newspapers in California kept running sad feature stories about casserole-baking widows with terminal tear jerking syndrome who had lost their individual health coverage because mean health insurance companies had discovered that the widows had forgotten to mention their acne on their initial coverage applications.

Finally, in 2010, after all of those front-page stories about photogenic widows who’d lost their coverage, Congress passed the Patient Protection and Affordable Care Act (PPACA) and said PPACA would drop the hammer — in 2014.

Now 2014 is just a few days away, and it’s still not clear whether the hammer is coming.

PPACA might come and smash Managed Care World as we know it to bits Jan. 1, or a few weeks or months later, or it might just blow away, or something else. 

With all of that continued uncertainty about the Hammer of Managed Care World Doom in mind, here are my predictions for the health insurance community for 2014.

1. For some people, PPACA World will be heaven.

If the PPACA exchange plans really start to operate in 2014, and the PPACA rules that govern the individual and small-group markets really take effect in the coming year, at least for some new plans sold to some people, then the rules will hurt some and help some.

Many reasonably healthy people with what has been decent coverage will pay more for coverage and have a harder time getting care in-network.

But, especially in the kinds of bureaucracy-phobic states that hate PPACA the most, people with diabetes and other health problems who are in the individual market may suddenly find that the new commercial health plans sold through the exchanges — the “qualified health plans” (QHPs) — open doors.

Moderate-income people with health problems who qualify for subsidized QHP coverage may get a level of low-stress access to decent health care that they had never dreamed of having.

2. Exchange managers will get into brutal court fights with the vendors that designed, built and integrated balky exchange enrollment systems.

The center of PPACA exchange news action will move from the exchanges’ board meeting documents pages to litigation tracking systems.

3. In states that have relatively low exchange plan enrollment because of exchange enrollment system problems, doctors, hospital executives, insurers and insurance regulators will send thank-you notes and bouquets to the information technology companies that caused the system problems that held down enrollment. 

The Congressional Budget Office (CBO) predicted that the QHPs would enroll about 7 million people by the end of 2014.

Opponents of the Democrats are hailing any sign that the exchanges will fail to meet the CBO QHP enrollment goal as a wonderful sign that the exchanges, PPACA and the Obama administration are failing.

But the gloating over the prospects of low QHP enrollment may miss the reality that, whatever the problems with enrollment are now, the problems the complicated new plans have with administering claims in 2014 may be much messier.

A state with an exchange that enrolls the people who desperately want QHP coverage and a smattering of people who love the QHP concept may be a much happier state than a state that succeeds at getting the masses into QHPs.

4. The insurers, agents and brokers that sell hospital indemnity insurance, accident insurance, critical illness insurance and other products that are exempt from PPACA underwriting and pricing rules will flourish.

Even if PPACA World ends up working fine, insurers, employers and consumers are entering 2014 facing so much uncertainty that they will have a hard time making any decisions. They will just sit there, staring at computer screens, wishing someone else would call the shots.