The American health insurance industry will be extinct by 2020 and Accountable Care Organizations (A.C.O) will replace the insurance companies. Groups of doctors, hospitals and other health care providers will come together to form the Accountable Care Organizations so as to provide the full range of medical care for patients.
These days, most insurance companies barely function as insurers. 60% of the Americans with employer-provided health insurance work for companies that are self-insured. In these cases it is the employer and not the insurance company that assumes most of the risk of paying for the medical care of employees and their families. All that insurance companies do is process billing claims.
Health insurance companies usually provide insurance for individuals and small businesses. They assume financial responsibility for paying the bills by taking a premium. But the risk sharing is limited because the insurers charge varying premiums, depending on the health of an individual or a group of employees. They use their data and market power to identify healthy people to cover and unhealthy people to exclude from coverage.
Many health insurance companies require prior authorization for tests and treatments and deny payment for covered services. This is forcing patients to appeal, discourage patients from using the medical services for which they are insured and attempt to avoid paying for those services. Patients are discouraged from receiving the care they need. It also imposes administrative burdens on doctors and patients.
The Accountable Care Organizations provided for by the Health Care Reform Act will make insurance companies unnecessary. A.C.O will increase coordination of patient's care and shift the focus of medicine away from treating sickness and toward keeping people healthy. A.C.O will keep their patients healthy and out of the hospital and will avoid unnecessary tests, drugs and procedures.
Insurance companies will no longer be needed to handle complicated billing and claims processing, nor will they need to be paid a fee for doing so. Payments can flow directly from an employer, Medicare or Medicaid to the Accountable Care Organizations.