As Insurers Pull out of Exchanges, an Obamacare Alternative
Here’s yet another aspect of the Affordable Care Act (ACA) that the federal government didn’t account for: the financial sustainability of the state exchanges. As major media outlets have reported, health insurance companies are warning are losing money so quickly from their participation in the Obamacare exchanges that they are compelled to pull out.
The most prominent example took place in April 2016, when United Health Group – the largest health insurer in the United States – announced that it will be withdrawing from the Obamacare exchanges in most states. Following United Health’s lead, other insurers are saying they may need to follow suit.
What the Experts Say
When the Kaiser Family Foundation speaks, we in the healthcare consulting community listen. Here’s what the foundation has to say about the sustainability of the Obamacare exchanges. “Something has to give,” said Larry Levitt, an ACA expert at the Kaiser Family Foundation. “Either insurers will drop out or insurers will raise premiums.” But even if those premiums increase in 2017, there’s no guarantee that the insurers will recoup their losses; plus, patients will be inevitably forced to change doctors (there’s no “you can keep your doctor, you can keep your plan” in this scenario). And if the insurers drop out of Obamacare, there is virtually no possibility that the exchanges will sustain themselves.
Not coincidentally, United Health pulled out of Obamacare exchanges the day after the Kaiser Family Foundation analysis report. In order for insurance companies to remain profitable, there is no way they can participate in the Obamacare state exchanges for the long-term. Clearly, there is a deep need for an Obamacare alternative.
Other Serious Problems
Of course, the Affordable Care Act is only compulsory for those who are not covered by an employer or individual health plan. According to a March 2016 Blue Cross/Blue Shield Association report, new ACA/Obamacare enrollees have 22% higher medical costs than those covered by employer health plans. That said, it is still preferable to have coverage from one’s employer – but as employers know, covering employees comes with all kinds of caveats in the Obamacare era.
A Real Obamacare Alternative
The only viable way for employers to avoid the burdens imposed on them by the Affordable Care Act is to seek out an alternative solution like direct contracting. Direct contracting is a healthcare model that gives employers an affordable way to cover their employees, while giving employees a customized network of providers to choose from. This is the best Obamacare alternative there is. Contact GM&A to request a free health plan analysis; we will be glad to tell you more.