We’re finally starting to get a glimpse into the future of health insurance under the Affordable Care Act.
Post 2014, there will be no underwriting in the small group or individual health insurance markets. Underwriting has always been the key tool for insurance companies to control risk. Underwriting is the use of medical or health information in the evaluation of an applicant for coverage; an individual’s health information may be used in deciding whether to offer or deny coverage and what premium rate to set for the policy. Once 2014 hits, that tool can no longer be used by law. If the industry cannot underwrite, then they will control cost by managing care.
Many people may have experience with an HMO (health maintenance organization plan) and now we are seeing the concept redeveloped on PPO (preferred provider organization) plan. Traditionally, an HMO contracts with health care professionals and facilities to create a “provider network,” featuring lower premiums and co-pays than other plans. A traditional PPO also creates a “provider network,” but unlike HMOs, PPO health insurance will cover some – but not all – of the cost of care administered by out-of-network providers.
In 2014, you may be offered a plan that has a gate keeper. This gate keeper will be your primary care physician. They will be in charge of managing and coordinating your health care. To see a specialist, you will have to get a referral from your gate keeper. To get diagnostic services, you will also need a referral from them. There will also be prior authorization for medical necessity, which should make specialty care more efficient. With this type of referral management we should see the cost of this health plan cost a lot less.
Here are a few points about this type of plan:
- This type of plan design may not have any coverage for non-network services except for emergency care.
- This type of plan may not provide coverage for any treatment without a referral.
- This approach to health care is going to put a strong emphasis on your relationship with your primary care physician. This may become a problem since we have a shortage of primary care doctors.
- If you elect this type of plan, don’t be surprised if your primary care doctor is also listed on your insurance card.
- This type of plan may be offered inside and outside the Federal Facilitated Exchange.
- You may also see this in both the small and large group health markets.