Larson: Insurance industry focused on Obamacare prep in face of uncertainty
Although some implementation of Obamacare is underway, it may take several years for the full impact of the sweeping Affordable Care Act to be felt.
But the Alliance of Health Insurers, an 18-month-old Madison-based trade association, wasn't willing to stand aside as policies were developed for the ACA, said Rebecca Larson, executive director of the nine-member group.
"The ACA represents massive change to the health insurance industry ... a sea change in the way that health insurance will be priced and delivered," said Larson, who took her new post in January after working a decade for Xcel Energy in government affairs.
"There are so many unknowns that it's hard to predict what will happen," she added. "But there was a collective mindset to address all that in a proactive way."
Larson said no one knows for sure how the state's health insurance industry and the over 18,000 jobs it supports will be affected. More than 500 companies are authorized to write health insurance in Wisconsin, she said.
Collectively AHI's nine member companies employ nearly 16,000 people in Wisconsin and provide health care coverage to roughly 2.3 million residents or nearly 70 percent of the total population enrolled in large group, small group, or individual commercial market plans. In addition, AHI member companies provide managed care services to approximately 421,700 participants in Wisconsinís BadgerCare and SSI Medical Assistance programs or roughly 60 percent of the population enrolled in those MA programs under managed care.
"There are risks and opportunities in this new marketplace," she said.
"Where we may see some reductions in staff on one side, there will be additional staff on another side. There will be so much investment in IT infrastructure because products are now often sold online. Even to just get systems to comply with ACA requirements will require a lot of investment."
She said the nine health insurance companies in the Alliance have been diligently preparing since the passage of the ACA in 2010 to comply with its requirements and understand the government's sometimes changing guidance.
"We are going to try to work through the challenges that the ACA represents and work with all the stakeholders. This is the law of the land, so there is an incentive for all the parties to try to make it work the best we can."
Changes from Gov. Scott Walker and majority Republicans in the Legislature also are coming.
"We are trying to work with the Walker administration and doing our part to help with enrollment of these particular individuals. And now we will be going into the federally facilitated marketplace. We are ready to stand as partners with the administration and the state agencies and all the other stakeholders. We stand with them to make this be a success for those who are now going to get health insurance."
Larson said she couldn't estimate what percentage of Wisconsinites will be insured after Obamacare kicks in next year.
"There are a lot of things with the ACA that are unknown, and that's one of the biggest challenges for health insurers and public policy makers," she said. "The individual mandate is supposed to affect consumer behavior, but no one really knows if that will do that. No one knows who is going to show up Janurary 1, 2014."
Larson said the big question is whether it will be the younger, healthier individuals.
"Are they going to show up in the marketplace, or will it be the less healthy ...that are more prone to get access to care? How that will all play out is unsure at this time."
She said the penalty for failing to sign up the first year is $95, a fine that will escalate in following years.
"That's really the question," she said. "Is that $95 individual mandate penalty enough to motivate ≠ -- particularly younger individuals -- to get health insurance coverage when they go into the marketplace and perhaps in this new environment see increased premiums?"
Larson noted, however that the provision in the ACA that lets young people up to age 26 be covered by their parents' insurance is already in effect.
"There is probably a large percentage of younger people who are insured because of that or because they have insurance through their employers. But for another large chunk, unless they are sick, there is no motivation for them to get it."
The nine members are: Anthem Blue Cross and Blue Shield in Wisconsin; Delta Dental of Wisconsin, Inc.; Humana; Managed Health Services Insurance Corp.; Molina HealthCare of Wisconsin; Physicians Plus Insurance Corporation; UnitedHealthcare of Wisconsin; WEA Insurance Corporation; and WPS Health Insurance.
Four of those Alliance members -- Compcare Health Services Insurance Corporation (an Anthem company), Molina Health, Physicians Plus, and Arise (WPS Health Plan, Inc.) -- have filed with the Wisconsin Insurance Commissioner, indicating they will have a qualified health plan for the individual market. One of the nine, Arise (WPS) has said it will enter the small group market. Those are to become official in early September.
She said many health insurance companies may be waiting to see what happens in the first year of the federal exchanges.
"Depending on how that plays out, they may choose to get in," she said. "But it will really be a strategic business decision for every company on what products they want to offer."
She noted that in 2011, only 10.4 percent state residents had no health insurance compared to nearly 16 percent nationally, adding: "We have a strong and vibrant health insurance marketplace, and health insurance companies have a strong presence in their communities."
-- By Brian E. Clark