7/2/2012 9:31 PM
On Thursday, June 28, 2012 the United States Supreme Court (SCOTUS) upheld the provisions of the Affordable Care Act (ACA), including the Medicaid eligibility expansion (with a caveat that Congress may not rescind existing program funds if states choose not to participate in the eligibility expansion of their state’s Medicaid program). The Court affirmed the controversial mandate provision, putting the penalty for not having insurance in terms of a tax which falls under Congress’ taxing authority. As a result, nearly all Americans must obtain insurance coverage or be penalized (aka taxed), and health plans must operate under the rules set forth in the 2700 page ACA law (e.g., accept all comers, rate restrictions, tax credits, ACO development, Exchanges, premium subsidies). For Medicare Advantage, Part D and ACOs it’s full speed ahead.
The SCOTUS decision brings a new degree of certainty to the future of health reform…and certainty is a good thing. While the November elections remain a factor in the ultimate fate of PPACA, over the next several months health plans should expect slew of new regulatory definitions to be delivered by HHS which will further solidify many components of the legislation. The general consensus among health plan leaders is that even with a November shift in the White House or Congress, much of health reform is here to stay…the train has left the station.
KBM Group: Health Services believes a health plan’s ability to anticipate market shifts and prepare for strategic and tactical execution has reached a critical level of urgency. Informed decision-making will rule the day. This means identifying, defining and acting on strategic imperatives:
- Existing Customers: Supported by the mandate and with public and private health benefit exchanges now in hyper-speed development as a new distribution channel, plans need to deepen relationships with existing customers across product-lines and market segments. This means identifying and profiling a Plan’s most valuable and most vulnerable customers, and determining the mix of outreach that can start in 2012 to assure a Plan keeps their “best” customers.
- Growth Potential: Across the country, ACA is expected to bring access to 30 million new customers; 24 million entering a new customer journey (aka Exchange), and possibly 16 million new Medicaid enrollees. As Plans evaluate their markets, understanding and segmenting these prospective customers – demographic, attitudinal and behavioral – is the only way to build an actionable marketing and sales plan that allows a Plan to get their fair share of consumers about to enter the marketplace.
It is expected that Exchanges (either State or HHS run) will come on-line in the fall of 2013 for open enrollment, with benefit activation starting January 2014. A year and a half is not a lot of time to get ready. Using the months ahead to optimize market position and value proposition is a vital success factor for every health insurer.