Health Care In The States

Pa., N.J. Insurers Gearing Up For Obamacare Business

By Robert Calandra, Philadelphia Inquirer

August 19th, 2013, 8:44 AM

This story was produced in partnership with

With new federal rules and mandates, you’d think that health insurers would be beating the loudest drum in the repeal-the-Affordable Care Act band.

But they’re not, and there are a couple of reasons why.

The first is pretty obvious. Millions of uninsured people will be flooding the online exchanges when they open nationwide on Oct. 1, presenting companies with a tremendous opportunity to build their roles and revenues.

But that may not be the only reason. Even insured workers may soon be allowed to pick plans over online marketplaces, upending the traditional model of employers knowing best.

In any event, “the direct-to-consumer health insurance market is growing,” says Joel Cantor, a professor of health policy at Rutgers University. “Under the Affordable Care Act, 15 to 16 million people will be in that market for health insurance in the next year or so. That is a significant increase.”

Until the ACA was passed in 2010, health insurance was pretty much a business-to-business transaction. Insurers sold plans to employers acting as proxies for their employees. Once the ACA became law, insurers started refocusing their marketing strategies on consumers.

Many insurers in Pennsylvania and New Jersey are preparing to launch marketing efforts to educate consumers. Most of New Jersey’s large insurers, including Aetna, Horizon Blue Cross and Blue Shield, and AmeriHealth, will be in the state’s federally run exchange and will be joined by at least one newcomer, Freelancers Union Co-op.

Independence Blue Cross, the region’s largest insurer, has also been gearing up. “Where we’ve put a lot of emphasis is really on getting new tools and new marketing techniques and new ways of engaging the consumer directly,” said Scott Post, IBC’s vice president of corporate and association affairs.

Independence is hiring people with retail marketing experience. The company expects that in the coming months, its customer-service representatives will be fielding different types of questions than they used to, because many people are buying insurance for the first time. The company is also placing a new emphasis on data.

“Data is beginning to play a much more important role, probably in a big way,” Post said. “The foundation to retail marketing is understanding the data that you have.”

Since ACA regulations let insurers help educate consumers, Independence will be going into communities and talking to consumers about its plans and the federal subsidies that are available. “It’s not just, ‘Now, what are my benefits,’ but, ‘What is my subsidy,’ and ‘How do you figure this out on your tax return?’ ” he said.

Staffing kiosks and stores in malls and community outreach serves another purpose – creating a brand name. “It’s all about branding,” said Joel Ario, a managing director at Manatt Health Care Solutions and a former Pennsylvania Insurance Commissioner. “The companies are branding themselves so people will know them like they know the auto insurers.”

And that may be the less obvious reason health insurers aren’t fighting the ACA. Exchanges may be the future of health insurance, and companies want to establish their brand. Ario said insurers are looking beyond the 20 million to 30 million people who will use public exchanges, and set their sights on the people receiving employer-based insurance.

“Generally at least 25 percent of employers say they are ready to move to an exchange right now,” Ario said. “So we are talking about 160 million people in exchange-based coverage.”

Ario said the larger insurance brokers are promoting their private exchanges to employers. In the near future, he sees those brokers giving employers three choices: “You can stand pat; dump everything and pay the fine; or give your employees a defined contribution that they can use to go to an exchange, where they will get a broader choice and can pick their own plan.”

18 Responses to “Pa., N.J. Insurers Gearing Up For Obamacare Business”

  1. Larry says:

    Pennsylvania Governor Tom Corbett has refused to participate with the Affordable Care Act (ACA) in any way calling it wrong for Pennsylvania. On the other hand, New Jersey Governor Chris Christie has taken a more moderate approach and will cooperate with the new health reform law of the land. Pragmatic Christie realizes, unlike Corbett, that if Americans really want to repeal Obamacare, as Republicans keep claiming, they would not have reelected President Obama. Corbett still has his head in the sand and when the ACA becomes successful, as most private health insurance companies expect, Corbett will look like the tea party idiot that he really is. Without a doubt, Corbett is “again” on the wrong side of history. The success of the ACA, along with pushing his regressive Voter ID laws, will make Tom Corbett a one-term governor. Any bets?

  2. nick says:

    What’s wrong with governors that would purposely choose to see their uninsured residents stay that way just to prove a political point? Tom Corbett claims that the cost of Medicaid Expansion will eventually fall upon Pennsylvanians because the federal government can’t be trusted to pay for it. He has no proof of that. He simply decided that it’s true. In Pennsylvania, there are currently 613,000 uninsured adults who would be eligible for Medicaid if the state expanded its Medicaid program. Currently, many of these people can’t afford health insurance and must get their medical care at taxpayer expense. So, already Pennsylvania taxpayers are paying for these people. If Tom Corbett accepts Medicaid Expansion, these people will be insured beginning in 2014 and the cost will be borne by a much larger national risk pool. The idea of Medicaid Expansion is to increase the size of the risk pool so that it’s not just Pennsylvania paying for their uninsured. The whole concept of risk pools is contained in “Insurance 101″. Just ask any insurance agent how risk pools work and they will explain that bigger is better…FOR EVERYONE!

  3. Dan says:

    I find the posts attacking Governor Corbett interesting, since no one knows what effects the ACA ultimately is going to have on our country. We used to applaud individuals that stood up for what they believed to be correct. I think the Governor may be correct. Ask yourself some simple questions, big picture questions. Does full implementation of the ACA mean everyone will now be insured? No, Kaiser Family study estimates about 30 million people will still be uninsured. Thats a lot of legislation to still have 30 million people uninsured. What happens to the non-profit status of hospitals (60% of which are non-profit) if we do find a way to insure every single American, one would assume if they can’t give away (dependent on the state, but lets say 3%) a certain amount of care they would lose their non-profit status and have to start paying federal taxes on their revenue. How many hospitals would that put out of business? Not sure, are you? One thing I am sure of a 2% sequester cut in the medicare and medicaid reimbursement rates had a 24 million dollar impact on the bottom line of one PA hospital system, so I think Corbett’s concern that they would lower the reimbursement rate of Medicaid in a few years in legit. We are adding roughly 16 million new people to medicaid nationally. ESI (employer sponsored insurance) has been declining at a clip of 1-2% per year for the last 20 years and payer mixes in some hospitals are made up of over 60% percent of all revenue being generated from Medicaid and Medicare patients. Medicare is expected to double in size again by 2030. But sure, it’s Governor Corbett’s fault, there won’t be enough people working to support this system in 20 years and I look at my infant daughter and shake my head because I am seriously concerned that the people taking are now outnumbering the people making. I’m sure the responses to my post will be hostile, I don’t claim to have the answers, and I don’t want grandma homeless in the street or mentally handicapped children to not receive care, but there has to be some sanity to this and I just don’t see it.

  4. mary says:


    Would you care to borrow my glass cleaner for your crystal ball? My guess is, you and Governor Corbett are sharing the same one, right?

  5. H. Quinn says:

    Just another negative comment from another Chicken Little Republican. Enough already! It’s played! Get another tune!

  6. Paul says:

    While opponents to the Affordable Care Act (ACA) continue to drag their collective feet and obstruct the new law in every way possible, the thing they fail to realize is that if the ACA fails, the fix will be a single-payer national health system. What the ACA has succeeded in doing is placing a keen focus on how broken America’s health care system really is. Americans pay twice as much as any other industrialized nation in the world only to place 37th, at best, in performance. Not to mention, in spite of Americans paying twice as much, over 50 million Americans are uninsured. Also, no other nation on earth allows people to go bankrupt just because they get sick. So, it is easy to see that the ACA, as a privately run insurance based healthcare system that is based on competitive markets, must succeed. It is in the best interests of all stakeholders, regardless of political affiliation, to make sure the ACA is a success. Otherwise, healthcare consumers will make sure that we will move to the next step which is single-payer national health care. How will healthcare consumers do that? At the ballot box!

  7. Dan says:

    Typical response, ignore everything that was of content and go straight for the ad hominem attacks. I work in healthcare, I deal with this daily. I’m telling you the best and brightest minds in the industry do not know what ramifications this bill will have and your educated response is to compare me to a cartoon chicken. Anything to avoid real debate. No one is saying the system isn’t broke, no one is saying it doesn’t need to be fixed, but what qualifications does a career politician like Kathleen Sebelius posses to fix it? We need the John Noseworthy’s, Toby Cosgrove’s, George Halvorson’s, Wayne T. Smith’s, Glenn Steele’s of the world working on this problem. And to the crystal ball comment, I don’t have crystal ball and that should be everyone’s concern and is for anyone who as actually taken the time to read every page of the ACA.

  8. Dan says:

    One more thing, who is “dragging their feet”? The president is personally delaying key provisions to the ACA, with out-of-pocket caps only being the latest. I will even close in saying, I hope all of you are right and that Obama Care is the best thing since sliced bread, we’ll find out in our lifetimes.

  9. Paul says:

    What Dan doesn’t seem to understand is that the only existing idea to reform healthcare on a national basis is Obamacare. Obamacare is virtually an exact copy of the healthcare reform idea that was originally conceived by the ultra-conservative Heritage Foundation in the late 1980′s as the GOP opposition to Hillarycare. Republicans embraced the Heritage Foundation health reform idea so much that (former) Governor Mitt Romney got the Heritage Foundation idea enacted in Massachusetts in 2006. That is why Republicans were shocked when President Obama hired the Massachusetts health reform team to bring Romneycare to Washington to copy it and create Obamacare. My guess is, because President Obama got all the credit for a Republican idea, Republicans are angry. Dan seems to be saying that Obamacare is wrong for America. Okay, then what’s right for America? I see no other ideas on the table. All I see is an idea put forth by the conservative Heritage Foundation that was copied twice to produce Romneycare and Obamacare. That’s it! Nothing else! Other than Romneycare, and it’s identical twin Obamacare, all I’m hearing are whining Republican crybabies with nothing to offer except to repeal Obamacare and go backwards. Is that the answer? Is doing nothing the answer? Is waiting another decade the answer? Because that’s how much time Congress will need to visit the topic of health reform again. In fact, because of the total lack of cooperation and lack of bipartisanship in Congress, we may not see the topic of health reform revisited in our lifetimes if Obamacare gets repealed.

  10. Will says:

    When President George W. Bush signed Medicare Part D into law, did we see opponents trying to sabatoge it? Did we see opponents trying 40 times to repeal it? When Democrats took control of Congess in 2006, did we see them on a mission to repeal Medicare Part D? Did we see a fixation to repeal Medicare Part D? Medicare Part D has some major flaws. First and foremost, Republicans made sure that Big Pharma was protected in Medicare Part D by not allowing any competition through price negotiation. Price negotiation would dramatically lower the cost of drugs that Medicare procures. Republicans keep saying that they want market forces to prevail when it comes to prices, yet they made sure not to allow such market conditions to prevail in Medicare Part D. Did Democrats raise hell and try to repeal Medicare Part D? Nope! Republicans are hypocrites! They believe in the free market but they cave in when Big Pharma puts pressure on them. They claimed that the Heritage Foundation had the best health reform idea and they proved it by enacting it in the form of Romneycare. Then, along comes an exact copy called Obamacre and Republicans cry foul. Hypocrites! Nothing but hypocrites!

  11. Dan says:

    Well said Paul, since ObamaCare is the only idea being put forward, it must go forward because of a lack of any other ideas. How can I argue with such unfallible logic. And this Republican/Democrat thing needs to stop, healthcare is bigger than that, I’m not a Republican, never said I was, I am employee in the healthcare system that is concerned about the haphazzard way this bill has been thrown together and is now being executed or not executed under executive order, but you guys can keep singing the Democratic party mantra. I’m young and it will by my burden to subsidize the old under the ACA, at least the way I’m currently seeing the subsidies stack up. So the young, who I think we can all agree make less in this country then other demos, if you actually have any clue how the subsidies will work, will not be nearly as subidized as older more established folks with families. Also the young, a demographic not growing nearly as fast as the elderly demographic in this country, and are for the most part, too ignorant to know that this legislation is being stuffed down their throats by liberal troglodytes like yourselves, will wake up one day wondering why they pay more for insurance they don’t even use. So call me a chicken Little, call me fearmonger, call me any name you like, but I would much rather we stop calling each other names, admit that the majority of the population has no idea what they are in for and start talking real solutions to some of the issues that are going to arise as a result of this legislation. You keep bashing everyone that has concerns with the legislation, the bashed get angry and dig in their heels, no progress is made, this forum is a perfect microcosm of whats happening nationally. True argumentation needs to be devoid of personal attacks and emotional appeal, something clearly rampant in this thread. I’m guilty as the rest.

  12. Martha says:

    If the criteria that Republicans want to use to criticize how private insurance is sold in the exchanges is that they don’t like paying for specific health benefits that they insist they will not use, then I guess that standard can be applied universally, right? I belong to a gym. I pay a flat membership fee and have access to “everything” the gym offers. Do I use every exercise machine in that gym? No! Do I use all four swimming pools in that gym? No! Do I use the all three walking tracks in that gym? No! Do I participate in every exercise class offered in that gym? No! Do I always use the basketball court in that gym? No! So, under the Republican rule, I should not be charged for things that I don’t use in the gym, right? So, the gym should hire a whole bunch of policemen to make sure that I only use the things that I am paying for, right? So, when anyone joins my gym, according to Republicans, they should sit down with the membership committee and detail all of the things that they will use and all of the things that I will not use and sign an paper saying that if they happen to change their mind, they must sit down with the membership committee and draw up and new list of things that I will use and will not use in the gym, right? Of course, under this Republican rule, each time you change your list, you get an adjustment in your membership fee, right? Is that how we should run healthcare? Is that what you have in mind? Republicans want à la carte healthcare and if you get a surprise one day and find out that your teenaged daughter happened to get pregnant and you aren’t paying for maternity coverage, tough luck? Fact is, in some aspects of life, one-size-fits-all works well if only because it’s simple to administrate and it supports the entire risk pool. It is a basic concept of how “all” types of insurance works. The bigger the risk pool, the better! I guess it’s a basic concept that most morons simply don’t get, huh?

  13. Ken says:

    When the ACA was being created at the committee level in Congress, there were a lot of stakeholders in the room. Lobby groups for hospitals, doctors, private insurers, medical device makers, nurses, not to mention members of Congress from both sides were all in the room. The only entity that dug in their heels and refused to participate in any meaningful way were Republicans. Every other entity signed off on the ACA and accepted their fate, good or bad. All of the lobby groups got things they liked and thing they don’t like. All were willing to compromise and cooperate. The only entity in the room not willing to cooperate and compromise were Republicans. They ACA got passed and enacted and it is now the law of the land and Republicans refused to be a part of it. On October 1st of 2013, enrollment begins. On January 1st of 2014, the ACA goes into effect. All without any Republicans support. Could the ACA have been a better law with Republican input and cooperation? Absolutely! But Republicans chose to be childish. Had Republicans been constructive with the ACA was drafted, we would have a better law. That didn’t happen and so we have what we have. In any case, something is better that nothing. Before the ACA, we had a broken fee-for-service healthcare system that was way too expensive and excluded over 50 million people and rendered another estimated 25 million more underinsured. With the ACA those numbers will improve. The ACA is not perfect, but it is way better than anything Republicans could possibly offer, which is just more of what we have had to endure for decades. Like Social Security and like Medicare, the ACA will improve with time in spite of Republican obstruction.

  14. Dan says:

    The only thing moronic is your comparison of gym memberships and healthcare and last time I checked there was no mandate to purchase a gym membership, but wait, its coming now the obesity is classified as a disease. And yes, there are different plans available based on your needs, there will apparently be “catastrophic plans” available only to the young, but at rates, given the subsidies breakdowns, that cost as much as a way more comprehensive plan for families. Before you start calling people morons, perhaps you should know what you are talking about. And if your going to go off on a ridiculous comparison make sure there are actual correlations.

  15. Mary says:

    Do you have a clue how insurance works? In most civilized societies, people are forced to by auto insurance if the drive an automobile. They don’t have a choice. The government sets the minimum standard and you have no choice about those standards. It does not matter that I drive safe and never have an accident, I still pay for the risk that other drivers experience in the risk pool. I agree that gym memberships is a poor example but auto insurance is very similar. Then again, you’ll say something like, nobody is being forced to drive, right? Admit it, you really don’t understand how insurance works, do you? Better yet, do you even have insurance where you actually participate in a risk pool? If you do, then you are a hypocrite to criticize Obamacare because Obamacare is nothing more than mandatory risk pools just like auto insurance. Tea Party hypocrite!

  16. Drew rostinkowsky says:

    Don’t tell me, let me guess. You still live at home and are still leeching on you mommy’s health care plan.

  17. Dan says:

    It’s clear I’m not arguing with rational people, so go to the Kaiser Family Foundations Subsidy calculator, here’s a real simple example for you, try to stay with me. If you and your spouse are both 26 and make $40,000 combined with no kids you will pay $3,365 a year for insurance, the unsubsidized amount would be $6,181 a discount of 46% or a savings of $2,869. Now do the same calculation for the exact same thing but change the age of the two adults to 63. They are still only going to pay $3,365 a year for insurance an unsubsidized amount of $17,819 or a discount of 81%. WHO DO YOU THINK IS PAYING FOR THE $14,507!!! I assure you I do not live with mommy, and one of my first jobs was selling health insurance. And I know darn well most healthy 26 year olds are not going to consider it fair that they have to pay the same as unhealthy 63 year olds. AND THERE ARE A LOT MORE 63 YEAR OLDS THEN 26 YEAR OLDS. I can’t make it any simpler than that, keep drinking the kool aid and believe that the financial reprecussions of this won’t effect you. “It is no measure of health to be well adjusted to a profoundly sick society”

  18. Dan says:

    One final thing I need to educate you on, the definition of the word hypocrisy. 1. the practice of claiming to have moral standards or beliefs to which one’s own behavior does not conform; pretense. As you do not know my moral standards or my behavior I find it interesting that you contend I am a hypocrite, but since the majority of you have a tenuous grasp on the English language at best I will share my background. My father was a DC cop, my mother was a legal secretary, totally blue collar, I had my first job at 14 so I could buy my own car at 16, I did not have money for college so I joined the Marine Corps, after four years of honorable service I got a job in the private sector, because those jobs offered benefits. I’m half way to getting my master’s degree on my own dime. I have done things my whole life in an effort to provide for a family. Now we are saying why bother, you didn’t do any hard work, but don’t worry, the government is going to pay for your benefits, now with college, you didn’t go in the military, you can’t pay for your student loans, no worries, Uncle Sam to the rescue. So you can make fun of me all you want, but I am no hypocrite, quite the opposite, I want a country where people earn things, where people work for things, because that is what I believe in. As a former Marine I will continue to hold people to a higher standard, because it has made me successful and it is a failing sentiment due to people just like you. Honor, courage, commitment, things you know nothing about.