Senate Republicans unveiled their version of a replacement bill for the Affordable Care Act this week, and while it was not materially that different from the House version passed earlier this year, there are still several key points for insurers to understand if it becomes law. Ben Isgur, leader of PwC's Health Research Institute, says it starts with the viability of the online insurance exchanges that served as the backbone for expanding coverage in the individual market.

"The big change for payers is that the current language has more money in to shore up the insurance exchanges," Isgur says. That amount comes to about $50 billion through 2020. However, he warns, "we have to see where this legislative language truly ends up."

That's because insurers could take two paths with that funding. On one hand, "Insurers could look at these next few years as continuing to shore up the exchanges and provide insurance in these counties," Isgur explains. But, he adds. "It could continue to be a 'wait and see.' There’s still uncertainty about how carriers are going to participate in Medicaid and what their businesses are going to look like."

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By any reasonable interpretation, however, the ACA has changed health insurance forever, Isgur asserts. He says that there are four key takeaways from the Senate bill that show how the increased access to insurance by underserved populations and the politicial football that health insurance has become will continue to affect insurers' strategy going forward. They are:

  • Data provided by several years of the insurance exchanges is still important and relevant. "We now have some insurers that have data on these populations, and that data is going to be extremely important regardless of how health insurance exchanges soldier on or eventually wind down," Isgur says. "Understanding and using that data and history is important for predicting the new populations that may come in."
  • States are going to be more involved with health care. "The states would have the ability to make decisions, under this legislation, around essential health benefits or medical loss ratios," he explains. "For national or regional carriers, that means a lot of work."
  • There's still lots of time for things to change. "Insurers need to realize there’s going to be a disruptive period starting around 2020," Isgur warns, "And you have to ask: When you have future dates, does it give the industry an oppoirtunity to go back to Congress for further changes?"
  • A new tax structure could free up product innovation. Isgur explains that with financial space and the data from several years of the ACA, insurers could find ways to be profitable with certain products that were less likely in a pre-ACA world. "The legislation is written that takes away the insurer taxes, that is what many would consider a benefit," he says. "The more years of experience, the more data a company has, then there’s more certainty and a market starts to form."

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