With premiums increasing and deductibles rising, consumer will take on additional costs relating to healthcare in the coming year.
Did President Obama just hand the collections industry and early Christmas present? If you believe the stories being reported by thousands of Americans who liked their healthcare insurance, and thought they were going to be able to keep their insurance, it would appear so.
Depending on which political analyst or agency you listen to these days, it looks like somewhere between eight millions policies at the low end, and as many as 52 million policies at the high end could be cancelled as a result of the fine print behind the now nuanced promise by president Obama. Already today, 4.2 million policies have been cancelled effective their renewal dates and these consumers, along with an estimated 80% of the individual marketplace will find themselves ultimately having to select a policy that could have much higher premiums and significantly higher deductibles.
This additional financial pressure on the consumer will ultimately generate higher receivables in the healthcare sector. The front end loading of costs for the consumer will mean that in addition to the increased cost of mandated premiums, consumer will now be faced with more limited choices and in many cases be left with few options other than high-deductible plans, forcing them to pay the first $5,000, $7,000 or even as much as $10,000 per calendar year in out of pocket expenses. Gone are the days of $20 office visits and co pays for those who once purchased their policies in the individual markets. These consumers will now face the reality of a significant household budget impact relating to healthcare premiums and out-of-pocket expenses.
You can debate the politics of it until you are blue in the face, but what doesn’t change is that a larger portion of the consumer’s wallet share is going to be absorbed by the mandated healthcare costs their household will have to cover, or else the government fines (taxes) the individual, affecting wallet share in a different area. Either way, it’s like the commercial says, “You can pay me now, or you can pay me later.” In an economy that has been hovering just above a comatose state for the last five years, many households simply don’t have the reserves or the current income to absorb these costs and many will not adjust their lifestyles accordingly to live in the reality of the new norm.
So how is your agency or law firm preparing for this potential wave of new healthcare placements? Are your agents trained to effectively collect healthcare accounts? Does your technology support the specific needs of healthcare collections? Do you have the required HIPAA compliance certifications in place to accept these placements and work these accounts? Do you have the right sales and business development team in place to seek out these new healthcare collection opportunities? The time to be thinking about all of these questions is now. In an industry that continues to consolidate and downsize, those firms and agencies that identify opportunities well in advance and position their companies to take advantage of these opportunities will be better suited to survive and thrive in the ARM Industry of tomorrow.
Lighthouse Consulting has been providing solutions to operational compliance challenges for ARM companies for over a decade. Contact Phillip Duff, CEO of Lighthouse Consulting today and let us help you navigate the compliance landscape.
Phillip Duff, CEO | www.LighthouseConsultingInc.com | Phil@LighthouseConsultingInc.com | (904) 687-1687