The Impact of Healthcare Reform on the Medical Tourism Industry

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There are a lot of differing opinions on the impact of healthcare reform in the United States and whether it will have a positive or negative effect on medical tourism.  It clearly has no effect on inbound medical travel to the U.S., as this segment continues to grow.    


The Patient Protection and Affordable Care Act (PPACA) has some real positives.  It eliminates pre-existing condition clauses, makes health insurance guarantee issue and tries to eliminate big gaps in what different individuals have to pay for health insurance.  


But the reality is, it doesn’t lower healthcare costs or insurance costs. It didn’t effect any meaningful change in reforming, tort reform (medical malpractice), the cost of medical supplies, equipment and medication, or the lowering of hospital and healthcare costs.  


It did mandate the profits insurance companies can make, but with costs continuing to rise, in the next decade insurers will make more than they did prior to healthcare reform. Costs will increase because of the weak individual mandate (penalty) that starts in 2014 for people who don’t buy insurance.  


Paying a $95 fine for the year is a drop in a bucket for people who are paying $500 to $1,000 a month for coverage.  The individual mandate was designed to force everyone, both healthy and sick, young and old into health insurance, spreading the risk and creating a proper “pool” of insured.

Just recently an IRS official stated that they won’t enforce the fine.  This potentially eliminates any incentive for young and healthy people to be forced to buy into health insurance. Instead they can wait until they are sick to buy insurance, potentially causing the elderly and sick to be the main population in the health insurance pool which causes what is called “adverse risk.”

The theme now in the U.S., is that healthcare reform is forcing “innovation.”  That insurance companies and employers are going to be truly forced for the first time to dig deep within themselves and come up with innovative solutions to lower costs. I personally believe that medical tourism, whether domestic or international, is at the top of that innovation list.  And guess what?  Most insurance agents and human resource professionals I talk to agree.  Be patient, wait and see.

If you’d like to learn more about healthcare reform, please feel free to download and read the White Paper the MTA released and I co-authored, on July 9, 2012, “U.S. Healthcare Reform’s Effect on the U.S. Medical Tourism Marketplace.”  


It’s available at www.MedicalTourismAssociation.com, as well as the Online Webinar I conducted on the same topic.  If you listen to the webinar and read the white paper you will truly get an understanding of healthcare reform’s effect on medical tourism, and then you can make your own informed decision.

The U.S. is definitely up for some challenging years ahead.

About the Author

Jonathan Edelheit is CEO of the Medical Tourism Association® and assistant editor of the Medical Tourism Magazine. With a long history in the US health insurance industry, including running a national healthcare administrator, Mr. Edelheit was the first person in the US to implement medical tourism into health insurance plans.


Mr. Edelheit is also editor of several leading US health insurance magazines and organizes one of the largest US healthcare conferences in the US for employers and health insurance companies, the Employer Healthcare Congress. Mr. Edelheit can be reached at: Jon@MedicalTourismAssociation.com