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Insurers Spending Millions to Prepare for Massive Healthcare Overhaul

Insurers Prepare for Massive Healthcare Overhaul(AP/The Blaze) The nation‘s big insurers are spending millions to prepare for the implementation of President Barack Obama’s health care overhaul even though there’s a chance the wide-reaching law won’t survive Supreme Court scrutiny.

It’s not that health insurers want to bet big that the court will uphold the Affordable Care Act. It‘s that they can’t afford not to. It will take at least several months and lots of resources for insurers to prepare to implement key elements of the law, which includes a controversial requirement that most Americans have health insurance by 2014.

WellPoint Inc., the nation’s second-largest health insurer with 34 million members, has said it will spend $100 million this year on technology upgrades to meet the law’s requirements. Aetna Inc., third-largest U.S. health insurer with more than 18 million members, says it expects to spend $50 million this year in part to upgrade software and computers.Even smaller insurers like Blue Cross Blue Shield of Michigan, a private company with 4 million members, are spending big. This year, the company, which employs 7,000 people, plans to add about 100 employees and spend nearly $20 million.

The law calls for big changes in the number of people receiving coverage, what must be covered and who pays for it, so insurers that don‘t prepare until after the court’s ruling, expected in late June, will run short on time, said Kirk Roy, vice president of national health reform with Blue Cross Blue Shield of Michigan.

“Waiting is too big a business risk for any insurer,” said Roy, who was promoted to his current job shortly after the overhaul became law in 2010.

The Supreme Court will hear arguments over the law for three days starting Monday. Among other options, the justices could uphold the law, strike it down completely or get rid of some provisions.

Insurers will be paying particular attention to arguments over two key provisions. One is the so-called individual mandate that requires most people to carry health insurance by 2014 or pay penalties. Of equally high interest is the requirement that insurers cover everyone who applies even if they have a pre-existing condition, like diabetes, which can produce high medical costs.

Insurers Prepare for Massive Healthcare OverhaulThe two mandates are important cogs in the law’s push to expand coverage through health insurance exchanges set up by federal and state regulators. These exchanges will be mostly online marketplaces, where individuals and small business employees can go to comparison shop for insurance policies. Insurers are spending money to figure out how to set prices for their coverage on these exchanges, which will vary by state and require changes like the inclusion of subsidies to help people pay for coverage.

Much of the money insurers are spending is paying for a close look at how to set premiums high enough to cover the expected increase in claims from people with pre-existing diseases, but not so high that healthy customers are scared off. That includes research into how many people with chronic conditions will need expensive prescriptions or how their customers will use health care.

“Insurers Prepare for Massive Healthcare OverhaulThere’s an awful lot of work that goes into preparing those kinds of analyses,” said Sheryl Skolnick, an analyst at CRT Capital Group, an institutional broker and dealer. “One should not do that in a rush because making a mistake could literally be fatal to the health plan.”

Even though these changes wouldn’t take effect for a couple years, insurers are preparing now because they’ll need to have their plans ready several months before then. They will have to submit plans to regulators and then wait for a review and approval, the timing of which will vary by state. Additionally, they will need time to advertise the plans before customers will be able to start signing up in October 2013.

Insurers also have to prepare for more pressing deadlines. For instance, the overhaul requires for them to create benefits summaries by September that make it easier for consumers to compare coverage. The summaries will give consumers details like a plan’s deductible or the annual amount a patient pays out of pocket for care before insurance coverage kicks in. They’ll also give examples for how the plan would cover events like childbirth.

The forms aim to make insurance shopping easier, but they pose a headache for the industry, said Karen Ignagni, CEO of the trade association America’s Health Insurance Plans. That’s because the summaries will have to be adjusted, depending on the plan, to account for varied pharmacy benefits or provider networks. An insurer with 50,000 different small business customers would likely have to design thousands of different forms.

“It’s not a simple matter of creating a computer program,” Ignagni said.

If the health care law is altered or thrown out, some money spent this year would have to be written off. For instance, insurers won’t need computer programs that interact with state-based exchanges or marketplaces.

Insurers Prepare for Massive Healthcare OverhaulBut not all the money would be wasted. Roy, with Blue Cross Blue Shield of Michigan, says the overhaul has compelled insurers to make it easier for customers to understand their coverage and how much it costs – a valuable change whether or not the law is upheld.

“Generally people tell all of the insurance industry, `Your stuff’s complicated and confusing … make that simpler,’” he said. “That‘s absolutely something that we’re working on.”

The overhaul also encourages insurers to invest in improving the quality of care and ultimately reducing costs. Market forces also encourage this: Health care costs are still growing faster than inflation and worker wages, and employers that provide coverage need help narrowing that gap.

“The forces that led us to the need for health care reform are not going away,” said Les Funtleyder, health care portfolio manager with Miller Tabak, an institutional trading and asset management firm. “If not (the Affordable Care Act), there is going to be something else that replaces this.”

The Associated Press contributed to this report.

Comments (51)

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  • sallyredneck
    Posted on March 24, 2012 at 9:55pm

    Yes you all who voted for him are responsible for the mass destruction of the nation, are you happy now? Yes you all are. You now will have all that free stuff he will give on the backs of the people who still have a job which is very few.

    Report Post »  
  • TruthAlways801
    Posted on March 24, 2012 at 5:21pm

    I Will Not Comply!

    Report Post »  
    • Ivehadenoughtofthisgovenmentcrap
      Posted on March 24, 2012 at 7:52pm

      Amen !!! I will not comply !!!

      Report Post » Ivehadenoughtofthisgovenmentcrap  
    • PIGSWILLNEVERFLY
      Posted on March 26, 2012 at 10:41am

      This Law will become the way for a NATIONAL ID. If Law stands HHS will be able to choose how to number/ID all. Will it be fingerprints; surgical implant; eye scan? THIS IS the “mark of the beast” and the way to UN World Control. Note: All Chinese and Indians have been numbered/complied already. There is a Mega Super Computer in Brussels all set to number all people on earth. Decisions Determine Your Destiny. I WILL NOT COMPLY! Will Elijah know he is Elijah? Is Elijah here now? Malachi 4: 5-6 Behold, I will send you Eijah the prophet before the coming of the Great and dreadful day of the LORD. And he will turn the hearts of the fathers to the children, and the hearts of the children to their fathers, lest I come and strike the earth with a curse.

      Report Post » PIGSWILLNEVERFLY  
  • TangLaoYa
    Posted on March 24, 2012 at 4:58pm

    The intent of Obamacare is to replace our system with single payer. Boths sides agree on that. They only vary on whether or not it’s a good thing. The military is single payer. Does anone claim that is an efficient consumer/producer? Our education system is single-payer. We pay more and more for less and less. Schools are no longer answerable to parents and the have come to serve as youth indoctrination ceners run by the Democrat-oriented teachers union.
    A single-payer medical industry has one advantage. Government health care can be very inexpensive. The more you limit treatment the cheaper and fairer it becomes. In the extreme, a prescription for bed rest becomes the runiversal treatment. It‘s nearly free and it’s the same for everyone. It is immaterial that that point is never reached. That is the direction socialized medicin always will trend.

    Report Post » TangLaoYa  
  • judyaz
    Posted on March 24, 2012 at 4:43pm

    I‘m worrying about what mandatory health insurance will mean to individuals’ costs. When the Prescription Drug Plan was implemented, seniors and the disabled who didn’t purchase it were given a “price they couldn’t refuse,” kinda like olden-day Chicago mob insurance. It continues today. Your price goes up each month you wait to purchase it (whether you need it or not) by 1-percent a month up to an annual maximum. It compounds, and you can never lower the price. For the rest of your life, when you do decide to purchase it, your penalty will be added to your monthly premium. That really makes it expensive!
    The same is true for Medicare monthly premiums. One 83-year old healthy woman was widowed. Because her husband chose to keep his Blue Cross policy from his work after he retired (and she was on it) they did not purchase Medicare when they became eligible at age 65. He died five years ago. Now she wants Medicare, but her premiums will be $100 a month in addition to the regular premium price. She’s penalized as a widow, since her husband is no longer alive whose policy she shared. To get Medicare she now has to pay an additional $1200 a year in addition to the monthly premium cost.
    The same is true should she want the Prescription Drug Plan.
    I guess this penalty will be charged to all younger Americans and illegal aliens too? Or will they face fines and imprisonment? No one seems to mention that, or how much? Or the cost. Did someone say $18,000 a year?

    Report Post » judyaz  
    • sealwifenyc
      Posted on March 24, 2012 at 7:02pm

      Putting policy aside, I do believe mandatory insurance will undoubtedly lower individual rates, when you have more people actually paying in, the price goes down. In addition, it could theoretically almost wipe out the number of people who don’t have insurance and visit hospitals for care and do not pay the bill. Those costs are extreme, and raise insurance rates, (hospital raises costs of service -insurance co raise premiums) and even if “Obamacare” is wiped out, until we deal with that issue our health costs will continue to skyrocket. I am a physician, and not sure how I feel about the mandate, honestly I did not spend 15 years of my life on education and training, to be paid like a government worker, and I am not saying that will happen, but it could. BUT, I also find it horrible when I see families spending their time navigating the system (not govt but insurance co’s) while be treated for cancer. Its also discouraging, when I treat someone who is stage 4 and terminal, and had they had a checkup yearly it would have been stage 1 and did not seek treatment due to no insurance. As a libertarian I am against all govt spending, but we do have a broken system and health care is a complicated/emotional issue. This truly is the only policy I have no idea what I think!

      Report Post »  
  • IMCHRISTIAN
    Posted on March 24, 2012 at 3:51pm

    What better way for a President that hates the flag, America and religion then to let the future kids pay for his debts and future President to get the blame for Healthcare…. There is no way he will not face judgement day without blaming someone else about something…but not only the bees know… God knows.

    Report Post »  
  • ahull15
    Posted on March 24, 2012 at 12:40pm

    Want to know what government health care will be like? Go visit your local post office and DMV

    Report Post »  
    • VoteBushIn12
      Posted on March 24, 2012 at 2:47pm

      Ok!

      So I did what you said and checked out the post office. And, what do you know… for 45 cents they took my hand-written letter to my nanny, but it on a plane to Idaho, and it arrived just 5 days later.

      Then I went to the DMV, and in just two hours I had a plastic license with my picture on it which enables me to drive a motorized vehicle in any of the 50 states.

      So yeah, looks like those two government run agencies work like a charm. Please explain what you think the issue is with healthcare

      Report Post » VoteBushIn12  
    • ahull15
      Posted on March 24, 2012 at 5:02pm

      So you’re saying you did that today? The DMV in my state isn’t open on the weekends, and I‘m guessing it isn’t open in your state either. That makes you a liar.

      The point of the comment was that in both the post office and DMV, there are way too many people in line with way too few employees.
      And how is it working out with the post office? Last I heard they’re laying off people and considering shutting down operations on the weekends.

      And just two hours to get your drivers license!! Wow! Glad that wasn’t an emergency room visit.

      Report Post »  
    • VoteBushIn12
      Posted on March 25, 2012 at 9:17am

      @AHULL15

      Yeah me too because if it was an emergency room visit I may have been waiting many more hours. You ever been to the emergency room? It isn’t first come first serve I can tell you that.

      And the post office is laying off workers because hardly anyone uses snail mail anymore. With internet and email, I don’t need to send LETTERS. This, however, is a poor analogy to healthcare because last I checked technology doesn’t make living obsolete.

      Lastly, you are correct – I didn’t actually go to the post office, but I was able to remember my experience from when I did after hearing this exact same argument a year ago. That makes you unoriginal and equally unintelligent.

      Report Post » VoteBushIn12  
    • Lloyd Drako
      Posted on March 25, 2012 at 12:30pm

      In my experience, USPS is reliable and timely, and where I live at least, I can do such things as renewing my driver’s license and car registration online.

      Report Post » Lloyd Drako  
  • florida123
    Posted on March 24, 2012 at 6:36am

    Just another Corp Welfare program at the Tax Payers Expense. NO CAPS on premiums and Tax Payer Funded Subsidies…………WOW talk about Corp Welfare! Im just trying to figure out how i can get Personal Computers Mandated at any price i see fit and for those that cant afford one the Good Ole Shmuck Tax Payer will pick up that tab too………..

    Report Post » florida123  
  • drphil69
    Posted on March 24, 2012 at 12:02am

    If the “supreme” court rules it constitutional, costs will skyrocket (the “mandate” that all insurance cover a “free” annual physical is costing me $600 per year!). Birth control, abortion pill, sterilization coverage… what’s next? Free drug addiction services, free alcoholism services, free psychological services… employers will drop health insurance coverage, and we will be stuck with $25,000 per year plans… considering the average salary is about $50k, how exactly is this supposed to work?? Simple – you will get health care when the govt deems you need it, and not one second before…

    WELCOME TO AMERITOPIA!

    Report Post »  
    • drbage
      Posted on March 24, 2012 at 11:38am

      During the debate re healthcare, we were told that $500B would come from eliminating waste and fraud from Medicare and Medicaid. No one defined “waste” or “fraud” and we learned that after year one of the $117M computer upgrade to eliminate fraud it found $1700 in potential savings, so we the taxpayers are out just under $50B in year one! The largest denier of claims (both in numbers and percentage) is Medicare and here is an example of just how “smart” they are. Recently, my mother’s doctor ordered a series of 3 tests done on her to try to find out what was causing her illness. Medicare denied the claim because they deemed(their words) it too expensive a procedure for a woman of her age (83). The doctor resubmitted the request for service for just part 1–it was approved; then part 2 and part 3. Had my mother gone just once for the series, it would have cost $2500 with a $125 co-pay. Since Medicare obliged her to go each part separately, it cost $5100 with a $375 co-pay as well as 3x the wear and tear on the car and gas. Another fine example of government efficiency and the great Patient Protection and “Affordable” Health Care Law coming to a doctor’s office near you.

      Report Post »  
  • ladybuglw
    Posted on March 23, 2012 at 11:43pm

    http://www.petition2congress.c...

    Go to this website and sign the petition to vet Obama and check into his eligibility to be president. The lame stream media never vetted him in 08 and neither did congress.

    Report Post »  
  • Needing_To_Vent
    Posted on March 23, 2012 at 10:56pm

    I know what the image for this story is supposed to be… the medicine staff and the Obama logo combined but look at it… I am not one to jump quickly to this but compare the shape and look to this… Notice the helmet like shape of the logo noted above. Look closely at the image used above before clicking the links…

    http://www.clker.com/clipart-147603.html

    or

    http://www.clker.com/clipart-147603.html

    Who did this artwork? Was this intentional or subliminal?

    Just sayin’…

    Report Post » Needing_To_Vent  
  • RightPolitically
    Posted on March 23, 2012 at 10:41pm

    Hundreds of millions will be spent just preparing. Then, hundreds and hundreds more implementing. Where will it end? In bankruptcy for the insurers. Who will pay for this new utopia of socialism? All of U.S. Don’t think for a moment that the insurers will “eat this.” Their customers will do the eating for them! Welcome to the NEW, AFFORDABLE government run and mandated health-care system!

    Report Post » RightPolitically  
  • soybomb315
    Posted on March 23, 2012 at 10:06pm

    government has been involved in healthcare for over 50 years. Government has messed things up so bad that i would rather have complete socialized medicine (scarce medicine, rationing, and poor care) as long as there was a complete free market system that people could buy into if they wanted. That way there would at least be a free market again

    Report Post » soybomb315  
  • soybomb315
    Posted on March 23, 2012 at 9:58pm

    The funny thing is – health insurance stock prices shot up after obamacare was passed. Of course, government wouldnt get involved unless someone profited but it is hard to see how the insurance companies will be better off in the long-run

    Report Post » soybomb315  
    • Cemoto78
      Posted on March 23, 2012 at 10:37pm

      Here’s where the problems really start. You can‘t tell me all these companies won’t be comparing notes and low and behold, all of their costs will be the same. Once again, if you take the real free market out of the equation and have the government pushing the agenda; we all lose. I hope and pray there is some sanity on the Supreme Court and strikes this whole idiotic Obamacare mandate down and tosses it in the garbage can where it belongs. Our freedoms are at such a risk with this and still some people are just ignorant to the bottom line of it.

      Report Post » Cemoto78  
  • possom
    Posted on March 23, 2012 at 9:34pm

    Our whole co. dropped our health care and laid off 50% of the employee‘s thank’s to this obamacare crap, the senate need’s to drop this like a hot rock because the people who came up with this have their head up their a$$”$!!!!!!!!!

    Report Post » possom  
  • 13th Generation American
    Posted on March 23, 2012 at 9:09pm

    Isn’t it interesting that the individual mandate was a Republican idea and Romney was the first to authorize it into law in Massachusetts.

    The GOP is screwed in 2012, President Obama will win by a landslide.

    Report Post » 13th Generation American  
  • Bill Burns
    Posted on March 23, 2012 at 8:52pm

    In March 2010 when Obama announced that ObamaCare would “reduce the deficit by $68 billion in the first decade” Nancy Pelosi could hardly contain her glee. “I just LOVE NUMBERS!” said Speaker Pelosi. “We’re just giddy” explained Dem. James Clyburn.

    Now it turns out it costs $1.8 Trillion.

    Report Post » Bill Burns  
  • Salamander
    Posted on March 23, 2012 at 8:43pm

    Why don’t we have 1,000 health insurers (20 per state), the largest writes 15% of insurance, the next 12%, then 10%, 8% and the other 16 insurers make up the 55% left! THIS would be a healthy market–the big guys offer stability and the little ones, always nipping at their heels, offer the innovations–like ‘pure insurance’! In fact, why isn‘t antitrust law employed to prohibit a company from writing ’insurance‘ and ’pre-paid healthcare’ together! We have lost sight of these terms and their meaning! Why not pass a rule that if government ‘negotiates’ a price, that any ‘provider’ accepting such price be prohibited from charging an uninsured, walk-in any more than they collect from the government for any service, device or procedure–and any such ‘provider’ cannot be forced to do business with the government! With such a rule, free-market factors would come into play and the behemoth would be ‘fighting’ for the little guy, rather than trying to take all the business for itself, while making the little guy ‘participate’! Have we gone nuts? O’bamacare is SO EASY TO FIX–read this over and over–it is OBVIOUS!

    Report Post »  
    • michael48
      Posted on March 23, 2012 at 10:00pm

      wife, 34 year nurse…o commie care= oct 2011 to march 2012….108 pages of new rules…litterally impossible to comply….you’ll be paying Max. ins. to O commie and be denied claims AT WILL…this is not about HEALTHCARE…this is about the Gov. Gumbas taking the gravy…INSURANCE..in two years ..from 4 pages per event to (the above mentioned) 108 pages..this is just the begining…

      Report Post »  
  • TheObamanation
    Posted on March 23, 2012 at 8:29pm

    100 million … 50 million … 20 million … for software and upgrades … who do the libbytards think will pay for this ? … the insurance companies ? … How can anybody be this stupid ?

    Report Post » TheObamanation  
  • Vernon Black
    Posted on March 23, 2012 at 8:23pm

    Wait until the FREE part kicks in 2014 when a Family of 4 making $80,000 a year will get an insurance premium TAX REBATE!….No getting rid of this boondoggle then!….After that, the Federal Government will control your LIFE by controlling your HEALTHCARE!!!…..Healthy PINK SLIM added to all our food by GOV. mandate, no more tobacco use or your “Coverage/refund will be cut,” and your weight is too high Ms. Taxpayer, sorry no refund for YOU!….etc.etc.etc.

    Report Post » Vernon Black  
  • shorthanded12
    Posted on March 23, 2012 at 8:00pm

    Artilcle 1, Section 8

    The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States

    So with that said the Louisiana Purchase and The Nebraska Kickback under Obamacare is unconstitutional under this article….they cant tax one state for a favor to another. plain and simple. We all can read the Constitution its a no brainer.

    Report Post »  
  • welovetheUSA
    Posted on March 23, 2012 at 7:53pm

    Yea……..what if its struck down? Our insurance went from 400.00 a month to 1700.00 a month……..not right to be Forced to buy something and have the insurance companies jump in bed with Obama.

    Report Post » welovetheUSA  
  • lukerw
    Posted on March 23, 2012 at 7:43pm

    Obama… desires the Insurane Companies to say… I WILL NOT COMPLY… so the will shut down… and His Government can take over their task & function!

    Report Post » lukerw  
  • HorseCrazy
    Posted on March 23, 2012 at 7:43pm

    nightmare. anyone remember the fun tidbits about the fed gov having real time access to our bank accounts? oh the fun. if this law is overturned we will still be paying for all the administrative work that goes into this and the folks that voted it in? nope no consequences for them

    Report Post »  
  • TRONRADIO
    Posted on March 23, 2012 at 7:40pm

    Pray that SCOTUS kills it this summer; it must die then and there.

    Report Post »  
    • soybomb315
      Posted on March 23, 2012 at 10:16pm

      part of me thinks that team obama want it to be overturned – and then it wont be an issue in the campaign

      and it would make their base turn out for the election cuz they are so pissed about it

      Report Post » soybomb315  
    • AmazingGrace8
      Posted on March 24, 2012 at 6:54pm

      @soybomb

      I didn’t think about that. Good point…unfortunately you may be thinking like a Liberal and be on point.Shhh-hh I won‘t tell anyone else if you don’t!…Some ad keeps running through my head…like something or someone is going to take care of you…“You Have Enough To Worry About”…”Hi, I’m from the government, I’m here to help you!” Sometimes, I think this is all a bad dream, but it isn’t…its reality baby!

      Report Post »  
  • Shasta
    Posted on March 23, 2012 at 7:37pm

    The insurers may be spending it, but they are passing it on to me. My insurance has gone up by 150 a year since Obamacare passed.

    Report Post » Shasta  
    • CatB
      Posted on March 23, 2012 at 7:44pm

      Just got an OVER $50 per month increase today! NOT HAPPY! I have a major medical policy with a very large deductible and I have NEVER made a claim.

      REPEAL OBAMACARE !!!!

      Report Post »  
    • HorseCrazy
      Posted on March 23, 2012 at 10:48pm

      yes for certain. we will pay for its defense too in the supreme court and for every other administrative thing it has taken to get obama care up to this point. screwed both ways. repeal it the entire thing

      Report Post »  
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