As we approach the end of 2024, we not only have to reflect on the year behind us, but look forward to the year ahead and what it could hold for the healthcare industry. With the passing of the recent U.S. election, only “concepts of a plan” have been mentioned, but there will likely be healthcare implications. 

Of the notable possibilities, we specifically want to call attention to healthcare innovations in Artificial Intelligence (AI), payment integrity, and security as well as potential policy changes—Affordable Care Act (ACA), Medicaid, and Medicare—and the impact those changes may have on health plans. 

Innovations in 2025

1. Artificial Intelligence (AI)

While already introduced, AI—in particular, generative AI (GenAI)—and machine learning (ML) will continue to play a pivotal role in automating heavily manual claims processing and auditing. These technologies can analyze vast datasets, identify anomalies, and flag potential discrepancies before payments are disbursed. Predictive analytics and complex reasoning using new technologies will enable health plans to anticipate trends in fraudulent activities and billing errors, significantly reducing overpayments and administrative burden.

Considering the three levels of AI, in 2025, at the bare minimum, all health plans should be using Level 1 AI—AI that can make smart decisions on numerical or optimization problems. Sure, AI may not reach a point where it can perform a claims audit completely autonomously (Level 3), but in the coming year we’ll see AI be further implemented to serve as more of a co-pilot (Level 2), speeding up the highly manual administrative work needed for a human reviewer to make a claim determination. 

‍Takeaways for Health Plans: Technology is a catalyst causing rapid change across industries.  AI performs with a high level of accuracy and efficiency, which will spur an increase in urgency to move towards Level 2, and potentially Level 3, AI. As McKinsey puts it, “...being first out of the gate to adopt AI-powered solutions could have a material impact on future performance because of the potential to increase reimbursement accuracy and efficiency relative to competitors.”

2. Payment Integrity

When it comes to payment integrity, there have been rumblings (if not roars) around the idea of “shifting left.” This is the idea that instead of focusing efforts on correcting errors after payment (post-pay), health plans will be "shifting left" to focus more on catching errors before payment goes out the door (pre-pay).  

Why? Rather than recovering payments, it’s more efficient to pay the correct amount from the beginning. However, there are time constraints that often pressure health plans to pay first, correct later, rather than stand between a patient and their care. Trying to strike a balance is a cornerstone of payment integrity.

‍Takeaway for Health Plans: As we enter the new year, we can expect to see health plans continue to look into solutions to help them reduce—and learn from—errors in payments. The only way to avoid errors going forward, rather than only focusing on fixing them in the moment, is to gather feedback and uncover why the errors happen in the first place. 

3. Data Access & Management

The healthcare industry has no shortage of data. However, the pure volume of said disparate data, makes it difficult for health plans to understand the full picture. With data from medical records, claims, policies, regulations, and more, it has historically been difficult for health plans to access and manage it all. 

Not only that, but data is often in different formats—it’s not a one-size-fits-all scenario. For example, according to HealthCatalyst, “Sometimes the same data exists in different systems and in different formats. Such is the case with claims data versus clinical data. A patient’s broken arm looks like an image in the medical record but appears as ICD-9 code 813.8 in the claims data.”

Going into 2025, health plans are going to look to adopt technology that helps them not only access the swath of data, but also organizes and makes sense of it all. 

‍Takeaway for Health Plans: One reason accessing data is so complicated for health plans is because it’s fragmented across different locations. Creating a single, unified view of data will become a necessity if health plans want to remain not only efficient, but competitive. 

Potential 2025 Policy Changes

With any major election comes potential changes to healthcare policy. In 2025 and beyond, we can expect at least efforts to implement changes to the Affordable Care Act, Medicaid, and Medicare. And, as a result, these changes would directly impact health plans.  

1. The Affordable Care Act (ACA)

The Affordable Care Act (ACA), also known as Obamacare, was first enacted in March 2010 with three goals in mind:

• Make affordable health insurance available to more people
• Expand medicaid coverage
• Support innovative medical care delivery to lower general health costs

While the Trump Administration has tried to repeal the ACA in the past, that doesn’t seem to be on the agenda for 2025. However, Trump will need to make a decision around whether or not to back the extension of premium subsidies which cut premium payments almost in half for millions and doubled enrollment.

In addition, according to KFF, Trump could take additional measures like reducing marketing and outreach for the ACA, which has the potential to reduce enrollment.

‍Takeaway for Health Plans: With a reduction of premium subsidies, health plans may face reduced enrollment. However with health insurance still being a requirement, and rules preventing health plans from adjusting pricing for risk or modifying benefits, insurance premiums will likely rise. 

2. Medicaid

As a refresher, Medicaid is a federal health insurance program “that provides free or low-cost health coverage to some low-income people, families and children, pregnant women, the elderly, and people with disabilities.” And, according to CNBC, “Medicaid is the third-largest program in the federal budget, accounting for $616 billion of spending in 2023.” It’s no wonder a cut to this program is top of mind for the new Republican administration looking to reallocate spending. 

Under the new administration, Medicaid eligibility could actually shrink with new work requirements. In his previous term, Trump attempted to tie Medicaid eligibility in Arkansas to work or job training. This was ultimately ruled against by a federal appeals court, but it’s possible this, and other waivers like it, could become priority during his upcoming term. 

Larry Levitt, executive vice president for health policy at KFF was quoted by NPR saying, “Medicaid will be a big target in a Trump administration.”

Takeaway for Health Plans: Changes in medicaid eligibility may increase administrative burden for health plans while impacting their top and bottom lines. With patients switching on and off medicaid, it’s likely more errors will be created in healthcare claims, resulting in a heavier lift for health plans on both pre- and post-pay correction. Plus with some health plans focusing majority on administering Medicaid, a reduction in Medicaid (because of a reduction in qualified members), could result in a massive drop in business for these plans. 

3. Medicare

Again, to refresh, Medicare is “the federal health insurance program for people who are 65 and over.” There are some cases where people under 65, with certain disabilities, can also apply for Medicare. According to CBS News, “America's seniors will pay more for their health care in the new year, as the Centers for Medicare and Medicaid Services (CMS) has announced that premiums for its Part B plan will increase by about 6% in 2025.”

There is also a plan to redesign the Part D benefits to increase stability for those with Medicare. The Inflation Reduction Act was implemented to help lower out-of-pocket drug costs for Medicare subscribers. 

Takeaway for Health Plans: As explained by CMS, “Overall, these changes mean that the government subsidy to Part D plans is shifting from largely being reconciled on the back end based on beneficiary costs (i.e., reinsurance payments) to a larger risk-adjusted government Part D subsidy payment upfront. By design, plans will have more liability requiring them to better manage costs within that upfront payment amount.”

Changes are on the Horizon

There are changes coming to the healthcare industry in 2025 and beyond. It’s important to remember that change also means the potential for advancement and growth. With AI and a focus on data access and management, there are steps being taken in the right direction to improve overall experiences for not only health plans, but providers and patients as well. Yes, there is the potential for policy change, but policy is only a pixel in the overall picture of what healthcare in 2025 will look like. 

‍To learn more about how Machinify can help prepare your health plan for 2025, schedule a demo today.