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Wednesday, October 2, 2013

Day 2 of the Exchanges

It is end of Day two of the exchange roll out. By all accounts, it has been somewhat chaotic and by some accounts there is the suggestion that not a single person has succeeded in completing an enrollment. This is where no one should want to be an early adopter. I logged on to the Healthcare.gov site and was able to peruse the offerings. They were not cheap even though I put in demographics which were not indicative of high risk (young and no pre-existing conditions).

In the long run I suspect the computer glitches will be worked through and the enrollment process will be passable before the January start dates. Then the real fun begins. My guess (and it is a guess) is that for those who enroll, they will choose the least expensive programs while not understanding the financial implications at the outset. Those implications will be they will be insured....sort of. Patients will soon learn that costs will be shifted on to them and they better become savvy medical shoppers and fast. Simultaneously physicians and health care organizations will take a haircut. The cost cutting  pressures will be exerted from two sets of payers; both legacy payers (insurers) and end users (patients).

In as far as the ACA has served to drive changes in the insurance market it has been a key driver in the upcoming changes. Ironically, I do not believe the changes which will result were the ones intended by the authors of the legislation, that is the driving of out of pocket costs on to consumers but unless there is some dramatic change in how this is to be rolled out, it is what we are going to get. Yes, the Feds will provide some degree of subsidy to some on the lower half of the income scale but the math does not work. From an actuarial perspective, the only way to pay for this will be to deploy something which wakes end users up to the costs associated with both the volume and intensity of care. Make patients responsible for some of the costs and they will become less willing to consume health care.

As costs become transferred to the public, I see decreased demand and steady downward pricing pressure. Like all predictions, I could be wrong. Only time will tell.

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