If Trump repeals the ACA, here’s how employer-based healthcare could change
Blue Cross and Blue Shield of North Carolina says premiums paid by Affordable Care Act customers in the Triangle will decrease more than 21 percent on average next year because of a new partnership with UNC Health Care.
The two not-for-profit companies say the partnership changes the incentives for providing health care and could serve as a model for other health insurance programs in the state and beyond. Under the arrangement, the insurance company and the health care provider will both be equally responsible for the quality and cost of care, said Blue Cross President and CEO Patrick Conway.
“We no longer want to be in an adversarial relationship,” Conway said in an interview.
Under the partnership, the two companies plan to eventually move to a model where Blue Cross will pay UNC Health Care’s physician network, UNC Health Alliance, a set amount to care for a patient or a family over a year, with adjustments for patients with serious health issues. William Roper, CEO of UNC Health Care, said the model replaces one in which the health insurance company pays doctors or hospitals for each procedure but also requires paperwork and other “hassles” that make it more difficult to actually provide it.
Conway and Roper both said the current system rewards doctors and hospitals that provide more care, regardless of the outcome. Roper likened it to the difference between paying a teenager $25 each time he washes the car or $100 a month to keep the car clean. Paying for each car wash provides the incentive for more washes.
“That’s what doctors and hospitals have done for decades,” he said. “We want to get to the world where we’re paid a lump sum to keep the patient healthy.”
Blue Cross provides individual Affordable Care Act coverage in all 100 North Carolina counties. Average rate changes for those plans will vary by region, with an average decline of 4.1 percent statewide next year. It will be the first time rates for individual policies have declined from one year to the next in the company’s history, Conway said.
The new Blue Value coverage through the UNC Health Alliance will be available in only 10 Triangle-area counties: Wake, Durham, Orange, Johnston, Franklin, Lee, Chatham, Alamance, Caswell and Person. The 21 percent decline in premiums means the average ACA plan in that area will cost $140 less per month, before government subsidies, than it does this year. Blue Cross now insures about 90,000 ACA customers in the 10-county area.
The cost of each policy will vary based on factors such as a person’s age and where he or she lives.
To qualify for the savings, patients will need to get their care through the UNC Health Alliance; Blue Cross will no longer cover ACA customers at the other two hospital systems in the Triangle, Duke Health or WakeMed. In some cases, pregnant women or people with ongoing treatments for issues such as cancer may be allowed to keep seeing their doctors, but as many as 45,000 Blue Cross ACA customers could be forced to either find new ones or switch insurance.
“I do understand that there will be a number of patients and families who will ultimately choose to switch care, and that will be a matter of some concern to them,” Roper said. “I want to reassure them that we have very fine physicians and providers and hospitals and services that we are proud to offer to them.”
Blue Cross is one of two companies that now provide individual health insurance policies under the ACA in the Triangle; Cigna offers ACA policies in Wake, Johnston, Orange, Chatham and Nash counties. A third company, Centene, the nation’s largest provider of individual health insurance under the Affordable Care Act, has created a network with Duke and WakeMed to offer plans in Durham and Wake counties under the name Ambetter.
Blue Cross asked the three big health care systems in the Triangle to propose a partnership that would reduce ACA costs, and UNC made the strongest case, Conway said. The insurer did the same thing in the Charlotte and Gastonia region and ended up signing contracts with all three health systems there, Atrium Health, Novant and Caromont, for premiums that are 16.5 percent lower than this year.
Roper said UNC is under tremendous pressure from its customers to reduce health care costs and has made a host of changes, such as negotiating better rates for bulk purchases, improving the flow of patients in its emergency rooms and reducing infection rates. Roper said everything the health system has learned about controlling costs will be applied to Blue Value customers.
“This will be a stretch for us to accomplish all of this and to do it at 21 percent less than we otherwise would be paid,” he said. “But we think we can do it. Otherwise we wouldn’t have signed the deal.”
Both Conway and Roper said their companies will not make up for the lower revenue from ACA patients by increasing prices for other customers. “We’re not going to be paid less from Blue Cross and end up gouging somebody else,” Roper said.