January 15, 2016 | Rosemarie Day

Top 5 Things for 2016

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As we start the new year, and the health care marketplace continues to rapidly evolve, here are the top 5 things we’ll be watching in 2016, as well as what we expect, and why we care about them:

1. PRESIDENTIAL ELECTION:  Repeal of Obamacare?

In spite of the often polarized views of the electorate on “Obamacare,” there has not been a great deal of (substantive) attention paid to health reform during the presidential race so far.  We expect this will change as we get closer to the general election.  When Congress passes legislation to repeal the Affordable Care Act, as they did recently, it is only the current president’s veto that keeps the Affordable Care Act (ACA) in place.  The outcome of the presidential election is, therefore, determinative.  An outright repeal of the ACA couldn’t happen until 2017 (when the new president takes office).  Nonetheless, the build-up to that possibility during 2016 and the disruptive impacts, even in anticipation of it happening, would be far-reaching.

Why do we care?  Repealing the ACA would be tremendously disruptive to many people and institutions.  And without a good replacement option, it would be very damaging to the millions of people who have gained coverage in the past few years.

2. PAYMENT REFORM:  More ACO’s Expected

As cost pressures continue to grow, the move toward health care payment reform will as well.  The goal of these efforts is to “pay for value, not volume.”  This means moving away from fee for service payments, toward bundled or global payments.  And with this, we will see a continuing movement toward more coordinated care – we expect to see the formation of more accountable care organizations (ACO’s) in 2016, as we’ve seen in the past several years.  This is more likely with some new options available, such as the “Next Generation ACO’s” announced by CMS this week.

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Why do we care?  We think that ACO’s could actually improve the health care experience for consumers, as well as potentially lower total costs in the system.

3. PRIVATE EXCHANGES:  Continued Growth Expected

As employers consider their options to mitigate the projected rise in health care costs, private exchanges will continue to be on their list of options to consider.  Given private exchanges’ potential to save money, we expect to see continued growth in private exchange enrollment (a topic we discussed here).  Even with the postponement of the Cadillac tax, the other growth drivers remain.

Why do we care?  We think that private exchanges have the potential to reduce costs and improve the consumer experience, and it’s an area that many employers don’t yet fully understand.

4. COVERING THE UNINSURED:  Continued Progress Expected

A tremendous amount of progress has been made in reducing the number of uninsured people over the past two years – the rate of uninsured 18-64 year olds has dropped from 20.4% in 2013 to 12.7% in 2015.  We expect to see further improvements in these numbers, both through exchange and Medicaid enrollments.   

  • Open enrollment results for public exchanges have been reasonably strong so far:  11.3 million people have selected plans (though may not have paid yet), and open enrollment doesn’t end until January 31st.

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(Click on infographic to enlarge.)  

  • Several more states are expanding their Medicaid programs (for starters:  Alaska, Indiana, Louisiana, and Montana), so enrollment will continue to grow in 2016.  

Why do we care?  That’s a rhetorical question, right?

5. INSURER CONSOLIDATIONS:  More Scrutiny Expected

2015 brought the news of several proposed insurance company mergers as well as some exits (many of the publicly sponsored Co-op plans failed).  We can expect to see more of this activity in 2016, but it will be highly scrutinized, thanks in part to the election year that we are in.

Why do we care?  Because it affects the choices that employers and consumers have and if competition is reduced, insurance costs potentially increase (especially in the individual and small group insurance markets, many of which are served by exchanges).