The state of California recently unveiled the structure that’s been put in place to serve as its federally mandated health insurance exchange. This move has been noticed, not only by insurance industry insiders and politicians, but average, ordinary people across the United States. Also, to the surprise of many following the story closely, the executive director of the California Exchange took this opportunity to suggest that insurance premiums would actually be reduced from current health care costs, a statement that was quite opposite the speculation of most. But why, you may ask, would the details of such a health insurance exchange be meaningful to someone living in, say, Texas, Florida, or New Jersey?
California is noteworthy because it happens to be the most heavily populated state within the United States, and, according to the most recent census bureau data, also has the highest number of uninsured citizenry throughout the country. This knowledge was likely instrumental in the state’s decision to embrace health care reform quickly after reform became law in 2010. These points infer that a significant portion of the U.S. population will be eligible to make use of the California health insurance exchange, known as Covered California. In fact, as many as 5 million people could ultimately be eligible to sign up for coverage through the health insurance exchange; making it a model for other states to follow.
However, many are suggesting that the data released by Covered California tells a very different story and that instead of reducing coverage costs as suggested premiums for an individual in California are more likely to skyrocket when the main provisions of the law are expanded on January 1, 2014. Some are calling the data supplied by Covered California spin and rhetoric, designed to camouflage a public relations nightmare. Naysayers point out that the data put forth by Covered California is a misleading comparison, since prices for plans that Californians can buy on the individual market are very different than the highly regulated plans that can be purchased by small employers for workers as group coverage. But what will this mean for young people and those who don’t have any chronic health issues?
Recently, one of the speakers at an ASCA webinar on “How to Train an ASC Biller” suggested that it was very likely that the high cost of premiums would force many into catastrophic policies, such as policies that only cover 60% while leaving the policyholder responsible for 40% up to the point of the out-of-pocket maximum. Although the new law stipulates that such policies with higher patient responsibilities would only be available to those who are 30 years of age or younger; it does appear logical that the personal budget of a large cross-section of Americans will dictate that they choose such a plan since it would be the most affordable option. If this comes to fruition, what would be the effect on the health care system and providers throughout the country?
“It seems clear to me that if we have more people choosing a catastrophic policy for their health care coverage, then it’s very likely that the receivables of a provider will grow because the patients will now become responsible for a greater portion of their medical bill,” said David Hamilton, CEO of Mnet Financial. Given that this scenario will likely come to pass, what would be the best way to deal with a rise in accounts receivables at the facility level?
“If a facility needs help with their accounts receivables, the most helpful thing I could say to them is to try our Early Out program,” said Hamilton. “This program reduces internal costs to little more than the price of sending out one billing statement and then Mnet takes it from there by acting as an extension of the facility’s billing department. We interact with the patient to resolve the bill in full and the facility only gets charged when we collect. The program can actually save a facility up 50% in collection agency fees,” Hamilton further stated.
How will this situation eventually play out? As January 1, 2014, draws closer, the full picture should become clearer. But for now, it seems apparent that when the New Year arrives, more people will finally be insured. Unfortunately, it also seems clear that many throughout the country, will in fact, be underinsured.