If the Health Insurance companies that you deal with (or work for) have any kind of future, they have been thinking about the Patient Protection and Affordable Care Act (PPACA) since the debate about it began in 2009. Each player in the healthcare and health insurance industries will have their own ideas about exactly what is going to happen and how it will affect their customers and their bottom lines, but one thing is certain: change is coming. Until the recent Supreme Court ruling that upheld the Constitutionality of the Act, the magnitude of that change was in question. But for at least the next year, the message appears to be “Full Speed Ahead.” No one is sure what will happen in the upcoming round of national elections or afterward, but at this point no one can afford to bet against what will be a seismic shift in both regulation and consumer behavior.
The best estimates available at the moment are that when the provisions of the Act take effect in 2014, as much as 30% of employers will rapidly drop their traditional coverage, creating a huge scramble as a vast portion of the group market reorganizes into the market for individual insurance. CBO claims that the number is only 7%, but independent analysis suggests otherwise. In fact, when looking to companies that have invested significant time into understanding the effects of the PPACA, the numbers jump as high as 60% for those planning to restructure their benefits away from traditional group plans. While no one can agree on the exact percentages, it is evident that change is coming to insurers, groups, and consumers.
If you are a group insurer, you’re paying close attention to the impending changes. Health Insurance companies are going to need to be forward-looking and nimble to thrive, if they are not fighting for their outright survival. There are some suggestions that the regulatory system put in place by the PPACA which will inevitably lead to the dismantling of the current model of health insurance in the U.S. in favor of a more centralized system.
The math behind exactly what is going to happen is complex and somewhat ill-defined at the moment. We have seen actuarial departments go against each other tooth and nail trying to work out a realistic model of the effects. There is great value in such work though, as it can help insurers spread the message to their customers ahead of time, helping them in turn to plan for the changes. The longer that insurers can remain a trusted part of the conversation of health insurance options, the greater chance they have to influence future customer decisions. One thing is certain – companies need to prepare for the impending changes by arming their sales force with the tools which will allow them to easily and consistently walk customers through the changes before the new regulations come into effect in 2014.
Working closely with one of its health insurance clients, SDLC has been able to develop a customer-friendly modeling tool for health insurers that helps them to drive the conversation with their clients providing visibility into what could actually happen to customers when rates, benefit levels, taxes and penalties are thrown for a loop under the new regulations. For more information on the PPACA and the tools available to initiate the education process, please contact Rick Toth at firstname.lastname@example.org.
Roland Hess is a Senior Consultant at SDLC Partners, a leading provider of healthcare business and technology solutions. Please feel free to contact Roland at email@example.com with any questions on this blog post or to further discuss health insurance and the impending changes.