How will you position your plan for growth in a post-reform environment?
On March 19, 2010, the House approved, 219 to 212, the Senate bill that had passed in December. The House and Senate also passed a reconciliation bill which modifies the original Senate bill. The reconciliation bill removes the special deals in the Senate bill, closes the Medicare part D donut hole, changes the Medicare tax to apply to capital gains, interest and dividends, adds insurance reform restrictions to grandfathered plans, increases the government subsidy for purchase of coverage, reduces the Cadillac plan tax penalty, and increases the fees levied on drug companies. The final bill will require most Americans to have health insurance coverage and provide coverage to an estimated 32 million people who currently lack it. It will regulate carriers more closely, banning underwriting practices such as denial of care for pre-existing conditions.
Even with the pivotal passing of the healthcare bill, the never-ending discussions continue as everyone tries to figure out what the implications will be and how business operations will change over the coming years as healthcare reform is phased in.
The bill is complex, and many nuances will come to light over the coming months. Many parts of the legislation focus on the individual and small group market segments, and the changes to those markets will be extensive. There are many impacts to health insurance carriers from the reform legislation. These impacts can be categorized into four main categories: procedural, plan and filings, rating, and tracking and reporting. All of these categories will have IT implications as carriers will be faced with significantly changing the way they do business over the next four years.
While the natural reaction to significant change is to step back and wait to see exactly how these changes will be implemented, in doing so carriers are slowing their response to both current market demands and future reform requirements.
Health plans that have a stable, flexible technology in place as new requirements begin to emerge will be perfectly positioned not only to respond to these regulations and get new products and rates to market quickly, but will also be able to proactively sell to the exploding Individual and Small Group Markets.
Flexible technology solutions will allow carriers to respond to reform in various ways: get new and adjusted products to market quickly, change their rates as necessary, market to the new individuals looking for coverage, and empower their brokers to do more in less time. Technology will also allow carriers to implement new workflows and take advantage of straight-through processing, reducing the cost required to sell in the Individual Market.
Four key areas of focus resulting from healthcare reform
- Exchanges will need to be integrated and managed, adding to a carrier’s administrative burden
- Market changes, and benefit and rate restrictions will place greater importance on simplifying product and the rate maintenance process
- The individual market will grow dramatically and the Internet will be a key marketing tool to sell directly to consumers
- There will be increased pressure on carriers to decrease administrative costs
Health insurance plans know that health reform is bringing some big changes to the way they conduct business. Therefore, the best way to react is to put measures in place that are flexible but robust enough to handle everything from developing new products to lead management to quoting, enrollment and activation, and even to the retention process.
InsureAdvantage technology assists carriers in acquiring new business, improving client retention through renewal automation, reducing operating costs, and preparing the organization for health reform. Connecture has taken the steps to build a solid and flexible technology platform for our customers that not only drives member growth and retention today but will also carry our customers through the next generation of health insurance.