Dennis Domrzalski, Reporter- Albuquerque Business First
While the long-term goal of the federal Affordable Care Act is to reduce health care costs, that might not happen in the short term.
In fact, costs for caring for millions of patients who have never had regular health care or primary care doctors could spike as those people get regular doctors and those doctors order tests and other procedures in an effort to become familiar with their patients’ health status, said officials from two Albuquerque insurers.
As more low-income people become responsible for more out-of-pocket expenses, that could leave doctors and hospitals having to provide millions of dollars of uncompensated care — the position they find themselves in now.
A recent study by the Society of Actuaries predicted that the cost of individual health insurance in New Mexico will increase by an average of 35 percent under the ACA as patients with chronic illnesses and high health care costs join the state’s insurance exchange pool.
“There will be a pent-up demand for [services and screenings] and those screenings will identify things early on that might require additional diagnostic work — lab work, imaging, MRIs — and there might be things that require early intervention,” said Stephen Forney, vice president and chief financial officer of Lovelace Health System.
Lovelace owns six hospitals in New Mexico and the 210,000-member Lovelace Health Plan.
In addition, low-income people who purchase insurance on the exchange could find themselves paying more for medical care than they have in the past, Forney added.
While the insurance premiums for low-income workers will be subsidized by the federal government, they could wind up paying more in co-payments and other out-of-pocket expenses.
“People who are in the State Coverage Insurance, they have pretty much full coverage with little patient liability. Now they will go to a new model and will have patient liability [costs], and that will create a challenge for doctors and hospitals in that how do you collect from people who probably don’t have it [the money to pay health care costs]?” Forney said.
Lovelace’s six hospitals provided $82 million in uncompensated care in 2012, Forney said.
Kurt Shipley, president of Blue Cross and Blue Shield of New Mexico, agreed there will be pent-up demand for health care services from people who have not been previously insured.
Consequently, costs for insurers will rise, he said.
The Affordable Care Act forbids insurers from turning away people with pre-existing conditions, which will also add to costs, Shipley said.
“There is some pent-up demand, and when you have people coming into a pool who have not been insured for a period of time, the costs for the pool are going to go up,” Shipley said.
“I think costs are going to go up for the individual market.”
The study by the Society of Actuaries said the number of New Mexicans buying individual plans will increase to 173,704 after the ACA takes effect in January 2014. That represents a 90 percent increase from the 42,890 residents who currently have individual plans.
Average monthly premiums for individual plans will climb to $392 from the current $291, the study said.
Nationally, individual monthly premiums are predicted to rise by 31.5 percent to $413 a month from $314.
Forney and Shipley both said the hope is that as more members of the uninsured population get regular and coordinated medical care, there will be fewer hospitalizations and trips to emergency rooms, which could help stabilize and lower insurance costs.
“That would be the beauty of it if it works the way it is designed,” Shipley added.