When the Affordable Care Act (ACA), otherwise known as Obamacare, first rolled out, it started a ripple effect in the health care community. Consumers and insurers alike wondered how the new laws would affect policies and rates. These changes affect health care providers and insurers big and small, including Kaiser Permanente, one of the biggest insurance agencies on the West Coast with a base of operations in Oakland, CA.
Kaiser After Obamacare
After the Affordable Care Act went into effect, many hospitals changed the way they operated and managed their patients. They were forced to reconsider their methods and systems of treating patients and managing patient care, including implementing electronic health records and striving to improve overall patient satisfaction.
But the rollout of Obamacare didn’t really affect Kaiser Permanente, or at least not as dramatically as other health care providers, likely because they have their own network of hospitals and providers. You can think of Kaiser as an integrated hospital-physician-insurance agency. It is more in control over the medical care provided to its customers. And because of this model, the hospitals and doctors share financial and medical responsibility for the patients treated.
This encourages everyone in the network to do what’s best for the company and their patients, which in turn ensures effective health care. Bonuses are provided to those that are efficient. For instance, hospitals in other networks lose money when patients are discharged, but as an insurer, this saves the company money. These incentives aren’t aligned with efficiencies at traditional hospitals.
Kaiser Increases, then Decreases its Rates
The main goal of Obamacare was to help Americans obtain affordable health insurance, but Kaiser Permanente policy holders did not experience significant cost savings, at least not at first. In fact, the company became known for having some of the highest policy rates in California’s health exchange.
Analysts were surprised at the rates found for Kaiser Permanente policies in California’s new state-run health insurance market. It actually surpassed some of its rivals, like Anthem Blue Cross. This came as a shock because the insurance giant was actually a major supporter of the federal health care law. It seemed plausible, therefore, that it would roll out more affordable rates, but that wasn’t the case. This in turn sparked a big debate in regards to why the company offered such expensive plans.
Some say that this was a strategic move on behalf of Kaiser, which raised its rates in order to keep away sick people and those who were uninsured for years. Others believe that low premiums would cause an influx in newly insured patients, which could potentially overwhelm its in-house hospitals and doctors.
In 2014, Kaiser Permanente was one of the most expensive health insurers and came in fourth place in exchange enrollment. It’s competitors Anthem Blue Cross, Blue Shield of California and Heath Net Inc. took the top three spots. Later in 2015, Kaiser decided to cut Obamacare rates by 1.4 percent, while their rival Anthem Blue Cross raised their rates by 4.6 percent.
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