In historic fashion, President Obama has signed into law the highly debated Patient Protection and Affordable Care Act and the Health & Education Affordability Reconciliation Act. The next phase of healthcare reform will include the release of “good faith compliance” at the agency level translating the law into a new regulatory framework. Rules or regulations will follow.
Insurers must now prepare for the reality of new pricing models, new taxes, and new customers. The new law will begin taking effect in stages, some aspects immediately and others over the coming years. Insurers will spend the next few months digesting what the law means to their existing business and what investments to make to be competitive in the new environment.
There are experts who are evaluating whether this new law is good or bad for business. The bottom line is that the impact on insurance companies is different for each depending on their mix of business. Insurers with a small percentage of business coming from the individual market will fair better than companies weighted more heavily in that space. Additionally, a move back to HMO products plays an important role in assessing company impact. Medicare Advantage is also ripe for large changes facing reimbursement pressure. Some companies see opportunity in the Medicaid expansion and others see stiff competition for low margin contracts. There is clearly potential for some plans to adapt, differentiate themselves, and win.
To win, insurers must remain focused on efforts to improve access to care and control costs and to minimize disruption for the people they serve, streamlining the process of bringing new people into the system and advocating additional systemic reforms that will reduce the cost of medical care.
The next step for insurers is to quickly convey to consumers, policymakers, and influencers what they are doing to adjust and improve operations. To do this, insurers will need to talk about how they are constructing more effective systems for the delivery of healthcare. They will want to highlight their continued diversification of their business; how they are improving data analysis; their efforts around improving health for the chronically ill; their technology investments to improve medical management; their improving quality scores; and/or ongoing innovations.
Congress will continue to tackle additional healthcare measures this year, and PR pros at agencies and in-house will need to continue to provide expert intelligence reporting and counsel to their executives and clients.
Holly Feraci is VP, government affairs, MS&L Group Washington, DC