Report suggests that the insurance industry in the US could be flipped on its head
The Psilos Group has released a report that suggests the U.S. health insurance industry will be “flipped on its head.” As the Affordable Care Act continues to cause a shift in the insurance sector, many insurers are expected to revamp their business models to better accommodate changes being made to the national market. The federal law has changed the focus that many insurers had on employers and group coverage, encouraging them to pay more attention to the individual market.
Many insurers are seeing a shift from employers and group coverage to individuals
According to the report, many of the country’s leading insurance organizations will not be prepared to adapt to the fresh wave of consumerism that is sweeping the country. As such, they could be at risk of seeing significant losses if they do not find ways to accommodate consumers and the demands they have. The report suggests that group business for insurers is “one the edge of irrelevance,” and this may be due to the proliferation of health insurance exchanges.
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Exchanges are putting emphasis on the individual market
These exchanges were built in every state following the passage of the Affordable Care Act in 2010. The exchanges were meant to provide individuals with the ability to find affordable insurance coverage. Some state’s manage their own exchanges, while the federal government operates the others. Insurance exchanges have put a heavy emphasis on the individual market, something that many large insurance companies have not had to focus exclusively on for several years.
Large insurers could struggle to adapt to the changes they are seeing in the national market
The report suggests that the insurance industry is heavily based on group coverage, with many companies serving employers rather than individuals. Because individuals are beginning to play a much larger role in the insurance market, many large companies could fall short of accommodating the demands they are seeing in the market. If these insurers cannot adapt, they may see their market share suffer in the coming years.