Strategic growth: Healthcare reform

Three-quarters of Americans (75 percent) and health industry leaders (79 percent) expect major health care reform legislation to be passed in the first term of Barack Obama’s presidency, according to findings from a November 2008 poll conducted by the National Association of Children's Hospitals and Related Institutions (NACHRI) and PricewaterhouseCoopers LLP (PwC).

Despite this consensus, how President Obama should reform the US healthcare system continues to be debated. In February 2009 President Obama signed into law a bill that expanded the State Children’s Health Insurance Program (SCHIP) as a first step towards fulfilling his campaign pledge to expand coverage to include all Americans.

President Obama’s plans to reform the healthcare system have broad implications for health insurers. Based on the November 2008 Health Research Institute Report, Healthcare policy in an Obama administration , health reforms if passed could lead to caps placed on premium increases, revisions of community ratings and changes to the broker community. Additionally, these actions could lead to increased enrollment in health plans as the administration strives to achieve near universal health coverage and more uniform standards for health plans.

Potential trends to consider:

Worsening economic conditions: Due to the difficult economy, the number of privately insured individuals has started to drop.

Constricting marketplace: More commercial insurer consolidation can be expected.

New regulations: Increased regulation directed toward community rating, guarantee issue, and coverage mandates may increase regulatory burdens and limit insurance underwriting strategies.

Loss of markets to government insurers: In the Obama administration, new public programs could crowd private plans out of the market and reduce the pool of potential customers.

How we can help you

As a payer, your primary concern is to develop the markets in which you sell your products and identify new revenue sources for your firm. Although proposed mandates and tax credits could enlarge your customer base, reforms could bring significant changes to the industry.

We can help steer your organization around the risks and uncertainties of the changing health insurance market and guide you toward a competitive advantage. Our services and solutions address: