How Insurance Exchanges Will Affect Doctors' Income

Leigh Page

Disclosures

July 10, 2013

In This Article

The Gathering Storm

On January 1, 2014, physicians will start feeling more of the full impact of the Affordable Care Act (ACA). On that date, the ACA's health insurance exchanges open and virtually every American will be mandated to buy health insurance, either through the exchange or someplace else.

Beginning on October 1, 2013, when the exchange Websites open for business, millions of uninsured people will begin choosing coverage on the exchanges. By next year, many of them will be seeking medical care, mainly from primary care physicians but also from other specialists, all of whom can expect to see a lot of enrollees with chronic conditions.

At this point, it is unclear yet whether exchanges will be a boon or a bane for physicians, but there is more evidence on the bane side.

Many practices -- primary care practices in particular -- already have full appointment books and have little room for new patients. If you do decide to take exchange patients, you could face a variety of potential risks, including the possibility of lower reimbursement rates and an inability to control the number of exchange patients you see. You may also have problems with patients who are not used to following treatment regimens and in collecting out-of-pocket payments from them.

Matthew C. Katz, MS, Executive Vice President and CEO of the Connecticut State Medical Society, says that these potential risks may turn out to be manageable, but it's too early to tell. "The jury is still out on whether exchanges will be good thing or a bad thing for physicians," he says. "Many questions still need to be answered, and we won't know until the exchanges actually start."

Even though enrollment starts on October 1, participating insurers have not been selected yet in many states, and their premiums will not be posted until September.[1] It is also unclear just how many uninsured people will be enrolled in the exchanges in the first year.

State-based exchanges are a new insurance entity with no established track record. The idea behind them is to make insurers compete directly with each other for patients by having them offer comparable insurance coverage. (Federal authorities recently renamed exchanges "marketplaces," but most people still call them by the old name.)

Exchanges are expected to be a magnet for uninsured people with low incomes. They will be the only place to qualify for new federal subsidies to buy health insurance. Participation will be limited to individuals, families, and employees in small companies, who currently don't get the lower insurance costs enjoyed by larger groups. People in companies with more than 50 employees will not be able to join exchanges, but they may be allowed to do so at some future time.

How exchanges operate can vary greatly according to state. At last count, 17 states -- including California, Connecticut, Massachusetts, and New York -- will operate their own exchanges and have some latitude in creating rules for them.[2] Seven states -- including Illinois and Michigan -- will partner with the federal government, with the intention of the state running them later. The remaining states -- including Florida, Pennsylvania, and Texas -- will be run by federal officials, because the states declined to do so. Exchanges run solely by the federal government or in partnership will have a standard set of exchange rules.

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