With President-elect Donald Trump’s inauguration quickly approaching, U.S. health insurers are increasingly wondering how they should prepare for what comes next.
During Trump’s campaign, he frequently promised to repeal The Patient Protection and Affordable Care Act (commonly called the “Affordable Care Act” or “Obamacare”). After winning the election, though, Trump somewhat changed course and indicated that key Obamacare provisions might remain.
Mr. Trump even indicated that he would like to keep two of the most popular benefits of the Affordable Care Act, one that forces insurers to cover people with pre-existing health conditions and another that allows parents to cover children under their plan into their mid-20s. He told The Wall Street Journal that he was reconsidering his stance after meeting with Mr. Obama on Thursday.
The comments added to a sense of whiplash about the law and its future.
But by choosing Georgia Rep. Tom Price to lead the Department of Health and Human Services, Trump subsequently signaled that he is likely to try to repeal much of President Barack Obama’s signature health law. Price has been a fierce critic of Obamacare.
And Trump has recently criticized Obamacare again:
People must remember that ObamaCare just doesn't work, and it is not affordable – 116% increases (Arizona). Bill Clinton called it "CRAZY"
— Donald J. Trump (@realDonaldTrump) January 3, 2017
U.S. health carriers would be wise to begin getting ready for a landscape that is likely to change. Here are three ways that North American health insurers can begin preparing for either a repeal of Obamacare or significant changes:
- Become more flexible and agile
Benjamin Isgur, head of the PwC’s Health Research Institute, said it took 2-3 years for insurers to get up-to-speed with Obamacare:
“The people who are running the large health systems, insurance companies, and pharmaceutical companies are pilots of these massive ships,” says Isgur. “They do not turn on a dime. “Many insurance companies took two to three years to get their exchange offerings up and running—to run the numbers, to think about how they were going to market and implement them.”
Marilyn Tavenner, the chief executive of America’s Health Insurance Plans, a leading industry trade group, seems to believe that a similar time period will be necessary to adjust to President-elect Trump’s new plan:
While insurers say they do not plan to fight the Republicans’ efforts to repeal the law, they are in no hurry to see it unwound. And Ms. Tavenner said the industry would support a delay so it could prepare for the changes. “We would love to see a three-year time frame, as long as possible.”
American insurers best positioned to adapt and even thrive in the face of the upcoming changes are those who are most agile in terms of their systems and operations, so they can cope with new developments as quickly as possible. Flexibility will also be necessary to simultaneously engage with new partners and regulations. For instance, insurers might need to prepare to sell insurance across state lines.
- Go fully digital
Explaining major plan changes to masses of potential and existing customers is never easy, especially considering that a large number of insurance customers are already dissatisfied. Insurers will have to be ready to communicate the upcoming changes via their portals and personalized customer videos, guided by advanced analytics solutions that maximize the chances of leveraging data to retain existing customers and gain new ones.
A full digital suite will help insurers, regardless of the U.S. government’s eventual decision. Today’s customers expect a simple, personalized encounter, like the experiences they get with Facebook and Amazon. Consumers want an insurer who knows their history and anticipates their future needs, while facilitating easy communication across preferred interaction channels and devices.
- Utilize a modern and innovative policy administration system
An innovative policy administration system is key for achieving the necessary flexibility and agility (#1 above).
Without a modern policy administration system, U.S. health insurers will be drowning in manual work to adapt to the new regulations and changes, which will tie up human and financial resources. Insurers will need a system that is easily configurable, to adapt to changes, and also automated, eliminating manual rework.
On the customer-side, direct, manual interactions with consumers raise costs, from brokerage to operations fees. Increased automation will help insurers significantly lower those costs.
Staying ahead of competitors and the coming regulations requires an effective insurance policy administration system featuring software that was specifically designed to handle an evolving market.