March 2016 - Health Plan Landscape for the Walk-in Operators
By Bernie Kuhn
The health plan industry survived the ACA implementation and the first few years of the new plan structures. The rate of change isn’t slowing however. Millions of newly covered lives (25% of which auto-renewed in January) on-boarded into the US health system. Demographic trends and regulatory forces continue to change their business mix from group commercial to individual products. But the effect of consumerism seems to be the big question. High deductible plans haven’t driven price shopping so much as they’ve curtailed spending. Plans have been making investments in consumer technology and engagement which will affect the walk-in business.
As this month’s newsletter is being prepared, the annual health insurance statutory reporting cycle is wrapping up and full year 2015 results hit in April. Look for major announcements as plans merge for scale and to grow their Medicare Advantage volume (Aetna/Humana). We expect to see several smaller Blue plans merge into larger plans. Blue plans may compete amongst themselves (via Anthem/Cigna), and Aetna and UnitedHealth (via Optum) will continue to build their infrastructure as a service arm of health systems. There may in fact be better money from running operations for health systems than in covering risk and chasing employers – the business case is pretty straightforward if/when a single or dual payer model occurs.