WASHINGTON: Insurance companies will ramp up their outreach to young and healthy consumers to show the benefits of coverage in the wake of Thursday's decision by the Supreme Court to largely uphold the Affordable Care Act.
In a 5-to-4 vote, the court approved the Affordable Care Act's individual mandate as a tax provision, which allows consumers to opt out of getting insurance if they pay a tax that goes into effect January 1, 2014. It starts at $95 or 1% of taxable income. The penalty would rise to $695 or 2.5% of taxable income in 2016, according to the law.
“They‘ve got to show what their benefit is to young healthy people so that they'll buy insurance instead of paying the tax, which will cost them less than getting coverage,” said Kristie Kuhl, SVP in the healthcare practice at Makovsky + Company.
To explain the health insurance exchanges created as a result of the law, many states have made headway in establishing their programs and hiring PR firms to promote them.
The exchanges are marketplaces where consumers buy insurance and insurers sell plans. The Affordable Care Act mandates that exchanges be established by January 1, 2013, so individuals and small employers can purchase coverage from them by the start of the following year.
However, some more conservative states such as Alabama, Mississippi, and Texas have lagged on this front in the hope that the Supreme Court decision would have made the exchanges a moot point. These states will have to play catch-up or risk the federal government running their programs, said Nancy Hicks, an associate director of Ketchum's North American healthcare practice.
Between these states, and those that have yet to promote their exchanges, “there is a massive need for a communications effort to inform the public about these state exchanges and how to access them,” she said.
The Supreme Court also ruled that it would be unconstitutional for the federal government to withhold Medicaid funds for states that chose not to expand their Medicaid programs as outlined in the healthcare law. This means some states may keep the current version of their programs intact.
“These states will need to communicate why they made their choice. This will mean expressing why what makes a person qualified for Medicaid in the state next door, won't apply to their residents,” said Claire Sheahan, SVP and healthcare group leader at Fleishman-Hillard Washington.
Overall, she said creating communications programs for the various provisions in the Affordable Care Act is like crisis communications in that “planning has to happen really quickly with a timeline not in our control.”
The Affordable Care Act decision also saw cable news heavyweights CNN and Fox News incorrectly report that the Supreme Court struck down the individual mandate.
With CNN in particular, its mistake was probably the biggest surprise of the day, and it will likely have a lingering impact on the network's reputation, said Pam Jenkins, president of Powell Tate.
“I think that's going to be a pretty big black eye for CNN. It will likely go a long way to make sure something like this never happens again,” she said.
In terms of the decision's impact on the 2012 presidential election, the ruling will rally members of the Tea Party who have been reluctant to support Republican candidate Mitt Romney, said Al Jackson, Washington office director at Chandler Chicco Companies.
“They don't need to be enthusiastic about Romney. They need to be enthusiastic about defeating President Obama, and they are much more enthused to do that,” he said.
That passion means the final chapter of the Affordable Care Act may not yet have been written, adds Mike Tuffin, MD of APCO Worldwide's Washington DC office.
“This ruling provides companies a brief window of certainty regarding the status of healthcare reform. The 2012 elections will determine whether that window remains open or slams shut,” he said.