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U.S. hospitals eye health insurance market amid M&A | Canadian Insurance
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U.S. hospitals eye health insurance market amid M&A

Under Obama's new healthcare law, local hospitals can set up insurance plans much more easily

Some U.S. hospitals are concerned about the recent slate of M&A in the health insurance sector—it’ll raise premiums for patients, they say—and in response, are considering entering the insurance market themselves.

“Providers are starting to realize, we don’t know how exactly it is going to unfold, but we need to control our own destiny,” Frank Williams, chief executive of Evolent Health Inc, which helps hospitals set up insurance plans, told Reuters.

Large healthcare systems have offered coverage for decades but under Obama’s new healthcare law, local hospitals can set up insurance plans much more easily.

To set up health plans, companies need a state license and must meet capital reserve requirements, so it’s only an option for a limited number of hospitals.

A new health plan should aim for an enrollment of at least 100,000 to spread the risk, said Ray Herschman, president of xG Health Solutions which helps hospitals develop insurance plans, told Reuters.

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