Back to the Future

6/28/2012 5:30:28 PM

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The US Supreme Court upheld the constitutionality of the Patient Protection and Affordable Care Act today. On a 5-4 vote the Justices found the individual mandate at the heart of the PPACA constitutional as a tax. On a 7-2 vote the Court did limit provisions of the law relating to the expansion of Medicaid to 133% of the federal poverty level, but at the end of the day, the PPACA remains in-force.

As a practical matter what this means is that we’re back to where we were in early March when the Court heard arguments about the constitutionality of the health care reform law. As is often the case, all the commentary by all the pundits amounted to, well, not much. That the deciding vote was cast by Chief Justice John Roberts was as big a surprise as the LA Kings winning the Stanley Cup so easily.

Still, there’s nothing like a historic Supreme Court decision to focus one’s thinking. So here’s some observation and advice from your friends at SeeChange Health you may want to keep in mind as you consider the future:

1.     The PPACA  has never been as bad as its critics fear nor as good as its supporters claim. Like most laws, it’s. Like every law it will have unintended consequences. Some of these problems will be “fixed” by lawmakers and regulators over the next 18 months. Some won’t be. But the current system is flawed, too, and we’ve managed to muddle through. The PPACA creates new hurdles for us all to overcome. And the good news is, we will overcome them.

2.     The PPACA is also the catalyst for major changes in the industry. All of us – carriers, brokers, TPAs, providers, employers, consumers – will need to carefully think through the implications. For carriers and brokers, this means affirming the value we bring to the system and making adjustments to our businesses so we not only continue to have the opportunity to provide this value, but that the value is recognized by voters and lawmakers. Change is rarely either fun or comfortable. But change is something we’ve all done over the past several decades. Successful producers adapt to these changes and find a way to prosper. Guess what? Successful producers will adapt to the changes being created by the PPACA and prosper in the future, as well.

3.     For brokers an important strategy to consider is diversification. This is not the time to have too much of your income tied up with any one product line, any one carrier or any one client. The individual insurance market will likely experience more changes than the group market, so if you’re overly invested in individual, now’s the time to do some marketing to employers. Health insurance is an important and critical product line. There are other vehicles for health and financial security that brokers should consider. There are a lot of good health insurance carriers out there (SeeChange Health being of course, one of the best of them). Carriers make mistakes. They change over time. Spreading your business among several carriers will mitigate the damage of any one one carrier’s mistakes or changes.

4.     The space-time continuum has been split in two. In one reality politics reigns supreme. You’ll hear all sorts of rhetoric from politicians and pundits about the end of Western Civilization as we know it, the need to take beat the other party, so on and so forth. Then there’s the other reality where work gets done by serious people making serious decisions. The two worlds intersect here and there, but not often. The 24 hour news channels (the window into the political world) will provide very little in the way of useful information on what’s happening in the real world. These news channels will, however, raise your blood pressure, increase your stress levels, and may cause constipation. Your best bet is to take these newscasts in small doses.

5.     Which makes this a great time to tune into your carriers’ and associations’ communications. All of us will be devoting a lot of time and resources to keeping you informed of what’s happening in the real world. The National Association of Health Underwriters is an especially important resource for you. Their information is current and reliable. Their analysis is focused on what brokers need to know and is always insightful. If you’re not a member, join (please tell them Alan sent you). If you are a member, recruit more. Our ability as brokers to shape the future depends, in large part, on the strength of NAHU.

The Supreme Court’s decision doesn’t change much for SeeChange Health. We’re still committed to providing affordable, value-based coverage through independent brokers and general agencies. The PPACA’s encouragement of wellness and preventive care initiatives (an area in which we’re an industry leader) should wind up benefiting us. For us, and may I suggest for you, this decision brings us back to the future. We’ve all been planning on changes to the market. There’s no reason to stop that planning now.  We will comment on major developments along the way to implementing health care reform. We’ll also keep you posted on what we’re doing to prepare for 2014 and beyond. Whatever those preparations, I can assure you, our commitment to brokers and the value you deliver will not waver. We’re looking forward to working with you for years to come as we build a new, different and better kind of health insurance company.

Thank you for your support and happy selling!

Alan Katz
Executive Vice President
SeeChange Health