The obvious question for anyone deeply involved with major medical insurance is, “Where’s the Dramamine?”
Federal and state policymakers continue to base individual major medical market rules on the roll of the political dice.
That chaos could eventually spill over into the Medicare market and group health markets.
Assuming, for the sake of argument, that commercial health insurance continues to function, here are seven questions that could shape our health insurance reporting in the coming year.
1. How solvent are smaller players?
Moody’s, S&P and Fitch may say they carriers they rate look fine, but most of the carriers they rate are big.
Now that regulatory chaos has pushed many bigger players away from the group health market, and completely out of the individual market, the remaining players tend to be smaller players without insurer strength ratings from the big rating agencies.
2. Will anyone involved with Texas v. USA litigation figure out what’s in the Affordable Care Act?
The ACA-killer suit could, for example, eliminate the regulatory and program framework an employer needs to set up one of the new association health plan (AHP) programs or cash-for-coverage health reimbursement arrangement programs the Trump administration has developed.
One question will be whether the parties and courts find a way to put some kind of new market framework in place before eliminating the old framework.
3, Will the stop-loss market take off?
Medical stop-loss insurance services as insurance for employers’ self-insured health plans. Stop-loss arrangements protect the plan sponsors against catastrophic losses.
One obstacle to stop-loss market growth: Employers can self-insure without buying stop-loss insurance. They can simply offer coverage and hope for the best.
Dan Davey, a member of the stop-loss team at Mercer, says in Mercer’s 2019 health benefits trends predictions that an increase in catastrophic claims could start to get employers’ attention this year.
“With the severity and frequency of catastrophic claims, employers will up their stop-loss insurance levels, and those that don’t buy it now will reconsider,” Davey writes.
Employers may also show increased interest in alternatives to stop-loss, such as single-parent captive insurers, and captive insurers owned by a group of employers, Davey says.
4. How exactly will workers get paid?
ADP, the payroll company, has suggested that many employers will shift toward more flexible payroll schedules.
Changes in payroll schedules could force benefits product issuers to update how they handle employee billing.
5. What are plans doing about behavioral health benefits?
The National Business Group on Health (NGBH) has put “emotional moves to the forefront” on its list of 2019 health benefits trends.
Members of the NBGH, which tends to represent large employers.
Those employers are talking about finding better ways to help plan enrollees with stress, addiction and serious mental illness.
NGBH mentions, for example, the possibility that some employers may try to expand their behavioral health provider networks.
6. Can short-term health insurers handle all of the new love?
The Trump administration has developed regulations that give states the ability to let issuers of short-term health insurance keep the coverage in place for as long as three years.
The issuers do not have to comply with the ACA rules that apply to individual major medical coverage.
In states that are friendly to short-term health insurance, the federal regulations now let the issuers make short-term health insurance a full-fledged alternative to major medical insurance.
For health insuers, rapid growth can be a risk factor. It will be ineresting to see whether short-term health issuers grow rapidly, and if so what will happen to their claims.
7. Will someone out there figure out how to get people to take care of themselves?
Most health insurance professionals have one thought in the back of their minds: The best way to help clients with health insurance would be to help people stay healthy.
The best health care is the care that’s not needed.
Bernard Health, for example, has put out a recent commentary noting that the price of poor U.S. employee health is about $530 bullion a year.
Many other benefits firms are continuing to experiment with all manner of incentives and programs to increase the odds that group health plan enrollees will exercise and eat right.
How We Did Last Year
Here are the questions we came up with a year ago, and how we think those questions look now.
1. Will more companies could try to disguise more major medical insurance products as something else?
The Trump administration has been doing what it can to make that possible, by revamping the federal association health plan and short-term health insurance regulations.
2. Will everyone get religion?
The Affordable Care Act includes a provision officially allowing the sale of a kind of arrangement that could, in theory, provide something like true individual major medical insurance: health care cost-sharing ministry memberships.
Ministries in effect when the ACA came along can continue to sell memberships without facing ACA mandates, or any other federal regulations or oversights whatsoever.
Rapid expansion of health care cost-sharing ministries could be another symptom of individual major medical market breakdown.
In the real world: About 1 million people are now participating in health care sharing ministries, according to the Alliance of Health Care Sharing Ministries. That’s up from about 160,000 in 2014, when most Affordable Care Act major medical insurance rules took effect, but the alliance has not updated that data in the past year. The current health care sharing ministry member count could be higher or lower. But health care sharing ministries do not seem to be on their way to crowding out commercial health insurers.
3. Will hospitals collapse?
Executives have been complaining about low, slow reimbursement rates.
Turmoil in Affordable Care Act program rules may have aggravated those problems.
In July, Apollo Global Management LLC, a private equity firm, agreed to buy LifePoint Health Inc., a struggling hospital chain, for $65 per share.
In October, Becker’s Hospital Review, a hospital trade magazine, published a list of 22 hospitals that have filed for bankruptcy protection or shut down since Jan. 1.
4. Will doctors go fishing?
The Federation of State Medical Boards says the total number of physicians in the United States increased to 953,695 in 2016, up 12% from the 2010 total.
But about 45% of U.S. physicians are ages 55 or older.
5. Will health savings accounts shine?
Yes. The Trump administration and Republicans in Congress have made HSAs and health reimbursement arrangements core to many regulation updates this year.
The number of people with HSAs increased to 46 million this year, from 43.7 million last year, according to data from the federal government’s National Health Interview Survey.
OVERALL GRADE: B+
— Read 5 Big Questions About Health Insurance for 2018, on ThinkAdvisor.