By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
Health Works CollectiveHealth Works CollectiveHealth Works Collective
  • Health
    • Mental Health
    Health
    Healthcare organizations are operating on slimmer profit margins than ever. One report in August showed that they are even lower than the beginning of the…
    Show More
    Top News
    bowl of vegetable salad
    Raw Foods: benefits and harms
    November 9, 2021
    pros and cons of the keto diet
    Read This Before You Follow the Keto Diet
    May 18, 2022
    spinal cord injuries
    4 Potential Causes of Spinal Cord Injuries (and How to Seek Compensation)
    May 25, 2022
    Latest News
    The Hidden Impact Of Stress On Your Body’s Alignment And Balance
    May 22, 2025
    Chewing Matters More Than You Think: Why Proper Chewing Supports Better Health
    May 22, 2025
    Grounded Healing: A Natural Ally for Sustainable Healthcare Systems
    May 16, 2025
    Learn how to Renew your Medical Card in West Virginia
    May 16, 2025
  • Policy and Law
    • Global Healthcare
    • Medical Ethics
    Policy and Law
    Get the latest updates about Insurance policies and Laws in the Healthcare industry for different geographical locations.
    Show More
    Top News
    Video: The Future of Medicine in Nigeria Depends on Radiology
    December 10, 2015
    A Guide to Implementing an Effective Healthcare Solution
    November 27, 2013
    4 Simple Steps For Solving The Real Cause Of Your Depression
    July 18, 2019
    Latest News
    Building Smarter Care Teams: Aligning Roles, Structure, and Clinical Expertise
    May 18, 2025
    The Critical Role of Healthcare in Personal Injury Recovery: A Comprehensive Guide for Victims
    May 14, 2025
    The Backbone of Successful Trials: Clinical Data Management
    April 28, 2025
    Advancing Your Healthcare Career through Education and Specialization
    April 16, 2025
  • Medical Innovations
  • News
  • Wellness
  • Tech
Search
© 2023 HealthWorks Collective. All Rights Reserved.
Reading: Do Health Plans Have a Future?
Share
Notification Show More
Font ResizerAa
Health Works CollectiveHealth Works Collective
Font ResizerAa
Search
Follow US
  • About
  • Contact
  • Privacy
© 2023 HealthWorks Collective. All Rights Reserved.
Health Works Collective > Business > Finance > Do Health Plans Have a Future?
BusinessFinanceHealth ReformPolicy & LawPublic Health

Do Health Plans Have a Future?

DavidEWilliams
Last updated: February 3, 2015 9:11 am
DavidEWilliams
Share
3 Min Read
health plans
SHARE

health plans

Not to be cynical, but in the insurance business the best way to make money is to discourage risky people from becoming policyholders and to exclude from coverage anything that a policyholder is likely to file a claim for.

health plans

Not to be cynical, but in the insurance business the best way to make money is to discourage risky people from becoming policyholders and to exclude from coverage anything that a policyholder is likely to file a claim for.

More Read

Get Onboard With These Top Health Trends In 2019
Is it Possible to Sue A Hospital For Malpractice?
My Perspective on the High Cost of Cancer Drugs
The Tremendous Role of AI in Transforming Healthcare
Pioneering Healthcare in Brazil

In the real world, insurance regulations temper these strategies, but don’t eliminate them completely. Health insurers in particular now have to operate within a narrow corridor. Under the Affordable Care Act they can’t discriminate against people with pre-existing conditions and must offer a fairly standardized set of benefits. Their profitability is also capped by the minimum Medical Loss Ratio (MLR) rules.

Theoretically that still gives health plans the opportunity to compete on other facets, such as provider networks, quality, disease management, and customer service. Some of this competition is taking place and benefits the consumer.

However, it remains tempting for plans to try to avoid costly patients even though the rules would seem to preclude that.  A New England Journal of Medicine article (Using Drugs to Discriminate — Adverse Selection in the Insurance Marketplace) describes a common tactic: using the drug formulary to scare away pricey patients. For example, many health plans on the ObamaCare exchanges make drugs for HIV expensive by putting all of them –including generics– in the highest tier.

This type of strategy, if not stopped, will undermine the Affordable Care Act’s goals. And therefore the authors propose some regulatory fixes to further micromanage the insurance market. But insurers are pretty clever and can be expected to look for other, similar opportunities. And such creative approaches are not new. A couple decades ago, when Medicare managed care plans were first introduced, I knew of a company that offered great benefits but placed its enrollment center on the 3rd floor of a non-elevator building. That way only the fit could make it up the stairs to sign up.

At some point the insurance market becomes so regulated and micromanaged that we have to ask the question: are the benefits of competition worth all the hassle and administrative costs? The jury is out on that one.

insurance policies / shutterstock

Share This Article
Facebook Copy Link Print
Share

Stay Connected

1.5kFollowersLike
4.5kFollowersFollow
2.8kFollowersPin
136kSubscribersSubscribe

Latest News

stress impact your health
The Hidden Impact Of Stress On Your Body’s Alignment And Balance
Health Wellness
May 22, 2025
chewing better for health
Chewing Matters More Than You Think: Why Proper Chewing Supports Better Health
Dental health Health
May 22, 2025
Do You Grind Your Teeth at Night? Here’s How Night Guards and TMJ Treatments Can Help
Do You Grind Your Teeth at Night? Here’s How Night Guards and TMJ Treatments Can Help
Dental health
May 21, 2025
The Secret To A Confident Smile: Top Tips For Better Teeth
The Secret To A Confident Smile: Top Tips For Better Teeth
Dental health
May 21, 2025

You Might also Like

Medical Necessity
BusinessFinanceHospital Administration

5 Issues Associated with Medical Necessity

August 29, 2014

Staying Healthy in Philadelphia’s Hospitals

May 3, 2016

Will 2015 Be the Breakout Year for mHealth?

December 19, 2014

Getting Young Invincibles to Buy Health Insurance?

March 16, 2014
Subscribe
Subscribe to our newsletter to get our newest articles instantly!
Follow US
© 2008-2025 HealthWorks Collective. All Rights Reserved.
  • About
  • Contact
  • Privacy
Welcome Back!

Sign in to your account

Username or Email Address
Password

Lost your password?