Payers who want to retain members long-term and keep them healthy might want to consider offering multi-year insurance exchange contracts, according to a Health Affairs blog post.
Insurers are increasingly investing in wellness and disease management programs--but the programs can take up to three years to pay off, notes the post. And during that three-year period, members may switch plans because the Affordable Care ACt makes it so easy to do so. If consumers purchase a cheap plan when they're healthy, but switch to a more comprehensive one if they get sick, payers lose out on the return on their wellness investment. Limits to risk adjustment further hurts payers' bottom lines.
Multi-year health plans would allow insurers to enjoy the return on investment of wellness and disease management by keeping members enrolled for five years, for example. That's a win-win scenario that keeps insurers and members on the same page when it comes to members' long-term health goals.
Although multi-year health insurance plans do not exist in the United States at the moment, self-insured plans are similar enough to make a comparison. Because self-insured employers retain the financial risks of healthcare costs, the employer has incentives to invest in the employee's health goals, according to the post.
Another example is in Germany, where private health insurance contracts have younger individuals contribute to a fund that is used to subsidize their premiums as they age. And because these funds are not transferable, consumers are discouraged from changing plans, according to the post.
However, there are some challenges. For such plans to work, notes the post, insurers must be able to predict future costs within the contracted period--something that is difficult to do.
- here's the blog post