Health Care 2020 aligns insurance companies and other third-party payors with the best interests of consumer-patients by replacing today’s unfriendly health care consumer marketplace with a reformed, consumer-friendly marketplace.
With family health insurance premiums averaging $20,576 a year, employers and employees are near or at a tipping point for employer-sponsored coverage. Without a change, industry-watchers believe the next recession will witness the beginning of the end of employer-sponsored health insurance as it is known today – replaced by a Medicare for All system, financed by a new, health care payroll tax, perhaps like Germany’s health care system.
There is a specific reason for the limited number of health insurance companies compared to property and casualty companies. Delivery of and payment for health care today relies on provider networks. Given doctors’ and hospitals’ resistance to allowing new insurance companies to create new networks that further complicates their practices and increases administrative expenses, newly minted insurance companies find it impossible to establish their own networks. Without the ability to offer network discounts, new insurance companies know they cannot compete with established companies.
Health Care 2020 makes it possible for new insurance companies to compete with the Big 5. Once providers begin disclosing their Medicare-Percent rate, more insurance companies will enter the market and compete by selling new, redesigned health plans called Reference-Based Pricing Health Insurance.
The new health plans will take advantage of the transparency required of providers and provide patients with the incentive to pay attention to the price of their own health care. As these new policies become successful, more insurance companies will offer them.
Reference-Based Pricing health plans will alleviate the problem with a lack of insurance company competition since they do not rely on networks. As a result, more insurance companies will be able to enter the marketplace and compete with others.