Obamacare: The End of Insurance As We Know It?
In the early days of the Obamacare debate, before the ACA was codified and passed, there was mention of and support for things like a “public option”, and even “Medicaid for all”. These possibilities sought to remove for-profit insurance companies from the loop entirely.
Some people heard about “government death panels” and responded by saying that they had already faced interference from such “panels”, that they existed, but that they were actually part of the for-profit insurance process that we already have. Anyone who has ever been denied an MRI or other test that their doctor believes would be helpful, all because some doctor sitting afar at their insurance company thinks it might be unnecessary, knows what this bureaucracy is like.
Some point out that the biggest buildings in any city are owned by insurance companies. What could we do with the money that they spend on CEO salaries, marketing, dividends? Should there be a for-profit angle to health insurance? Why is it a good idea to have a profit motive involved in whether or not someone gets an expensive treatment that could save their life?
But maybe, because of Obamacare, that is in the early stages of changing.
The Fiscal Times recently reported on a curious trend that is threatening insurance companies. This move has to do with Medicare and Medicaid, which was expanded under Obamacare.
Most hospitals end up taking less for services they render when the payor is Medicaid. But Medicaid is not a program paid directly from “the government”. Instead, it is administered through existing insurance companies, all of whom are required to maintain certain basic coverages in their Medicaid plans. Some offer more, but none can offer less, by law.
Hospitals are now looking at setting up their own in-house Medicare Advantage plans, thereby keeping both the payments and the premiums collected within their walls, cutting out the Humana’s, Aetnas, and other big dig insurance companies.
Dr. Kenneth L. Davis, CEO and president of Mount Sinai Health System in New York, which is setting up just such a system, says, “Inevitably the large systems are going to move to take part of the premium dollar.”
This model is actually not new. Kaiser Permanente has been operating as insurance company and health care delivery system for years. This is called an “integrated delivery system”. And it is where health care is headed in the future. And experts predict that insurance-only models of business, with no delivery of care, will be phased out by competition in the not-too-distant future.
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