Sunday, April 18, 2010

Obamacare will make HHAP obsolete in 2014

Awhile ago I had asked what the passage of Obamacare would mean for the Healthy Howard Access Plan. An article that appears in the Baltimore Sun today confirms that when Obamacare's health insurance reform provisions kick in (which will not happen until 2014), HHAP will be obsolete.

Beilenson hopes to morph HHAP into completely new entity which would operate as an insurance co-op. A co-op is a company that is owned by the members, so all the profits are rolled back into the business to benefit the members through lower premiums. I could be wrong, but I don't think there are a large number of insurance co-ops now, so I don't know why that would change with the passage of Obamacare. Also, if an insurance co-op was such a good idea, I don't know why Beilenson and Ulman didn't do that in the first place. The whole concept of insurance is based on risk pooling, so they would need many more members than they have been able to attract under the existing HHAP structure. Additionally, I suspect that Obamacare is a huge boon for insurance companies, so I bet the federal regulations will make it difficult to compete with existing insurance companies. Someone else seems to agree with that:

Edmund F. Haislmaier, a senior research fellow for health policy studies at the conservative Heritage Foundation, said although "it is conceivable that someone might want to do that [start an insurance co-op]," he's skeptical that the concept will remain attractive once the federal regulations are written. He believes that the regulations will promote a consolidation of insurance companies that will end with two or three large providers in Maryland. But others are more enthusiastic about the concept.

So, the bottom line is that Obamacare will put HHAP out of business by 2014. The local government spent $1 million tax dollars on HHAP to keep it afloat for two years, and it currently has 600 enrollees.

Healthy Howard has about 600 enrollees, Beilenson said. Another 180 received health care through it but have left the program as their circumstances have changed, he said. Enrollment is a far cry from predictions of 2,000 enrollees in the first year.


PZGURU said...

Of course Obamacare is a huge boon to insurance companies. They will get over 30 million new policies out of this deal!!! That's why they supported it. Unfortunately, they don't realize that Obamacare will ultimately put them out of business entirely once the govt takeover is completed.