Opposition likely to die down

May 1, 2010

As with any significant market regulation, the provisions in healthcare reform will undoubtedly change over time.

When the Medicare program launched under President Lyndon B. Johnson in 1965, then House Minority Leader Gerald Ford vowed to repeal and replace the legislation.

Seniors today clutch their Social Security and Medicare benefits tightly, deeply opposed to anything that might diminish them. Once Americans start witnessing the Patient Protection and Affordable Care Act in action, the newly insured might clutch their benefits just as tightly, making repeal a tough political proposition.

GET STARTED RIGHT AWAY

Roll up your sleeves because the more granular responsibilities of implementation will fall on managed care.

"The most important thing executives and boards can do is understand what the law requires because there's so much hyperbole and confusion," says Bruce Merlin Fried, partner, Sonnenschein Nath & Rosenthal, and a former director in the Health Care Finance Administration from 1995 to 1998. "Somebody needs to read the law-not a consultant but somebody in the company. It is a beast, but someone needs to read it."

Fried says plans should consider a diversification strategy for the expanding Medicaid market or, as further guidance is issued, for the insurance exchanges. Early retirees-although a more risky population-and the young invincibles are ripe opportunities for expanding membership.

Focus on a unique marketing strategy for each segment, he says. Smaller plans should build on what they do best because they face the biggest risk of becoming insolvent.

Imposing governmental price control, such as minimum medical loss ratios and premium review processes, historically leads to consolidation for the sake of market clout, economies of scale and spreading risk. Fried predicts plans will consolidate to survive.

"This is going to be very complex, and no one within Congress is expressing any concerns about consolidation," he says.

As with any significant market regulation, the provisions will undoubtedly change over time. Don't count on "repeal and replace," however.

Once your neighbor, your brother, your college kid or your favorite barista cashes in on healthcare coverage, no one will want to be the bad guy who takes it away.

Julie Miller is editor-in-chief of MANAGED HEALTHCARE EXECUTIVE. She can be reached at julie.miller@advanstar.com