Insights From Our Editors

What is the Impact of Health Care Reform on Eyewear Purchases?

July 15, 2015

There hasn’t been too much of an impact yet on eyewear spending from the Affordable Care Act, but The Vision Council notes in its 2015 Economic Situation Report that ECPs may feel the effects in the near future. Only 4.3 percent of the U.S. adult population has experienced any change so far in their vision coverage as a result of the ACA, however, “a significant number of eyewear users (7 percent) plan to cut spending on upcoming eyewear and eyecare products as a result of the ACA.

In the health care arena, we participate in three ways. We are health care providers, we are health care consumers (i.e.: when we go to our own doctors for care we are a health care consumer), and we pay for the health care of others through both higher premiums and through higher taxes. The average eyecare practice historically receives about 70 percent of its revenue from third-party coverage of patients. Paying attention to the health care arena is important to strategic planning for current and future strategy and tactics to be used within our eyecare practices.

The biggest change in the health care arena in recent times is the Affordable Care Act. The ACA has made significant changes to our practices already. In the next two years, the ACA will make even more dramatic changes to our practices. Let’s take a moment today to examine the current state of the ACA and consider how heath care fees are going to affect our patients this year and next.

Affordable insurance for all Americans is a primary goal of the Affordable Care Act. The fact that it was supposed to be affordable was evidenced by the term being included in its name. It’s a fair question to ask how well it has accomplished that goal.

It’s important to keep things in perspective, so let’s look first at health care costs.Health care costs are rising about 3.5 to 7 percentacross all states.Against that backdrop, let’s look at the change in price for ACA coverage for 2016.

Health Pocket, a research group, studied 45 states and found the following 2016 average rate changes:
• 20 percent increase for Exclusive Provider Organizations
• 19 percent increase for HMOs
• 14 percent increase for all plan types

In a recent speech in Nashville, President Obama claimed “the law has worked better than we expected” and “actually ended up costing less than people expected.” Do facts support that claim?Since he chose Tennessee to use as an example, let’s look at Tennessee.In 2015, Tennessee plan increases ranged from 7.5 percent to 19.1 percent. For 2016, the rate increases in Tennessee are:

• BlueCross/BlueShield 36.3 percent increase
• Community Health Alliance Mutual 32.8 percent increase
• Time Insurance Company 46.9 percent increase
• Cigna, Humana, UHC 11-18 percent increase

It must be those greedy insurance companies gouging people for higher fees. Actually, it can’t be greed because the ACA, by law, caps health care profits. So, what is causing the fee increases in ACA health care premiums?It’s actually pretty clear that there are two primary issues causing the fee increases: (1) ACA regulations (e.g.: the ACA bans charging people with higher health care risks prices linked to their health risks, so low-risk people must pay more to subsidize the higher-risk people) and (2) more people have signed up for health care who are older and, therefore, have more costly chronic conditions. When insurance premiums do not cover medical claims costs, then insurance companies must increase fees to cover the cost.

Combine this news with the $6,000 individual deductible and the $12,000 family deductible of the Bronze plans in the ACA Exchanges/Market Places, and it becomes pretty clear how patients are viewing their household budgets. More and more money will be needed for health care costs. That directly impacts how much money the average family has available for eyecare. That explains how the Vision Council in its 2015 Economic Situation Report states: “a significant number of eyewear users (7 percent) plan to cut spending on upcoming eyewear and eyecare products as a result of the ACA.”

To counter this trend, take this week to see if you’ve made it easy for patients to pay in your practice. Cash, checks and credit cards are the traditional payment methods in the average practice. This week explore alternative payment methods such as PayPal, CareCredit and bartering. In the changing health care arena, we need to do our best to make sure our patients can still afford care in our practices.

The weekend edition of the Wall Street Journal July 11, 2015, published an opinion piece entitled The Unaffordable Care Act. Information from that article was used in the writing of this article.

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