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
    improving patient experience
    6 Ways to Improve Patient Satisfaction Within Hospitals
    December 1, 2021
    degree for healthcare job
    What Are The Health Benefits Of Having A Degree?
    March 9, 2022
    custom software development is changing healthcare
    Digital Customer Journey Mapping and its Importance for Healthcare
    July 21, 2022
    Latest News
    Beyond Nutrition: Everyday Foods That Support Whole-Body Health
    June 15, 2025
    The Wide-Ranging Benefits of Magnesium Supplements
    June 11, 2025
    The Best Home Remedies for Migraines
    June 5, 2025
    The Hidden Impact Of Stress On Your Body’s Alignment And Balance
    May 22, 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
    narrow-road-ahead-sign
    Narrow Networks in California?
    March 24, 2016
    Insurer Has E-Security Problem
    August 26, 2017
    What Kind of Inequality Matters to You?
    October 19, 2011
    Latest News
    Let Your Lawyer Handle the Work Before You Pay Medical Costs
    July 6, 2025
    Top HIPAA-Compliant Messaging Apps for Healthcare Teams
    June 25, 2025
    When Healthcare Ends, the Legal Process Begins: What Families Should Know About Probate and Medical Estates
    June 20, 2025
    Preventing Contamination In Healthcare Facilities Starts With Hygiene
    June 15, 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
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

FDA mobile medical app
FDA Issues Final Guidance on Mobile Medical Apps
Order Workflows
The Happy Advantage – Shawn Achor Video [Amazing]
Top Quotes of the Week
Reducing Documentation Costs for Physician Practices

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

9 Lifestyle Tweaks That Can Add Years to Your Life
9 Healthcare Lifestyle Tweaks That can Add Years to Your Life
lifestyle
July 11, 2025
car accident lawsuit
Let Your Lawyer Handle the Work Before You Pay Medical Costs
Policy & Law
July 6, 2025
women dental care
What Is a Smile Makeover and How Much Does It Cost?
Dental health
June 30, 2025
HIPAA-Compliant Messaging Apps
Top HIPAA-Compliant Messaging Apps for Healthcare Teams
Global Healthcare Policy & Law Technology
June 25, 2025

You Might also Like

The Euro Health Consumer Index 2012
Global Healthcare

Euro Health Consumer Index 2012 Shows #Prevention is the Way Forward, of Course

May 23, 2012

Can Digitally Driven Kiosks Help Patients Find Medications?

March 24, 2012
Business

Hospital Advertising Proliferates But Critics Question Purpose and Value

December 14, 2012
workplace injuries
Policy & LawWellness

How Workplace Injuries Make the Lives of Low-Wage Workers Miserable

February 15, 2013
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?