The healthcare industry continues to evolve in the post-Affordable Care Act market. A new Avalere Health report has summarized four key trends that will impact insurers this year as they update their business models to remain profitable and competitive.
Exchanges
Avalere predicts that insurers selling their plans on exchanges will be more active in shaping the exchange market by improving the level of sophistication for their decision support tools that help drive consumer choices. This takes on added importance in light of a recent report suggesting that marketplaces should be doing more to improve price transparency.
Insurers will also highlight benefit design challenges, including narrow networks and high cost-sharing arrangements. Plus, federal and state regulators will likely consider evaluating whether insurers should be allowed to offer certain benefits and networks.
Medicare Advantage
Enrollment in Medicare Advantage plans will continue to grow, likely reaching more than 16 million people in 2015, Avalere said. The group further predicted that Medicare Advantage insurers shifting to more "intelligent contracting arrangements" with providers could have an advantage in anticipating and managing "the impact of the cost versus quality value equation."
Medicaid
Medicaid will continue to be a market where insurers can grow their business as 10 million new enrollees sign up for coverage under expansion efforts. Although Medicaid expansion will be an opportunity for growth for insurers, they will also be increasingly scrutinized, particularly since the Centers for Medicare & Medicaid Services is expected to release regulation pressuring the Medicaid market to align with the exchanges and Medicare program. "This alignment will create challenges for some plans but will also create opportunities for commercial plans to capture Medicaid lives by leveraging existing platforms," Avalere said.
Specialty drug costs
Since Gilead introduced hepatitis C drug Sovaldi and other high-cost medications hit the market, insurers have been wary about the growth of specialty products, particularly regarding how to anticipate and price these drugs. That's why many insurers are exploring innovative quality-based contracts--such as Aetna's and Humana's agreements with Gilead to receive lower Sovaldi prices, as FierceHealthPayer previously reported--as well as other steps to actively manage rising drug costs.
To learn more:
- read the Avalere Health report