SCOTUS Decision Removes Some Uncertainty – Full Speed Ahead on the Shift to Consumer, HIX, ACOs, and Duals

JUN 29

Yesterday after two years of bi-partisan banter, the U.S. Supreme Court (SCOTUS) upheld almost the entirety of the provisions passed in the 2010 Affordable Care Act (ACA) legislation.  The high court concluded that the provision of the ACA mandating that all Americans have healthcare insurance or pay a fine violated the Constitution’s Commerce Clause, but was permissible under the ability of Congress to impose a tax.  In addition, SCOTUS ruled to limit the power of the ACA to expand Medicaid and that the federal government cannot withhold a state’s current Medicaid allotment if it choose not to participate in the expansion.

There is still much debate to follow in the run up to the fall elections as the healthcare markets realign around the ACA provisions impacting how insurers, hospitals, drug makers and medical device manufacturers prepare for 30+ million more Americans entering the system.

Here is what we’re watching:

  • Billions of investments in initiatives like the Pioneer ACO and CMS Dual Eligible Demonstration Programs, and the establishment of Exchanges have been validated and will continue.
  • Regarding the expansion of Medicaid, we expect this to be a big near-term battle, with states eventually coming around to take the massive amounts of new federal funding.
  • No changes to state exchanges (HIX). Those deadlines are still in place and states must establish an exchange in 2014 or the Feds will do it for them
  • A continued shift to the consumer and retail-based insurance selling (brand, product bundles, customer services, and member and patient engagement)
  • A rush for the states to prepare for 2014 HIX deadlines (including a mini-gold rush as vendors look to grab a share of the billions of federal establishment funds)
  • A focus on network design and services in order to improve price competitiveness and scale
  • Continued blurring of lines as payers and providers align to better manage risk shift and cost recapture under new ACO models
  • Growing importance for the Medicaid managed care organizations as states shift to managed Medicaid models
  • Alignment of care coordination models in the Dual Eligible populations as a significant driver of topline growth for the plans

Consolidation will continue as the lines between payer and provider blur, risk shifts and new models (like ACOs) develop; managed care organizations become acquisitive with Medicare and Medicaid plans; and the state exchanges come under pressure to meet looming 2014 timelines.

TripleTree is already working on research concerning dual eligible issues, the shifting of costs to healthcare consumers and solutions for improving post-acute care delivery and coordination; and will be publishing additional perspectives on the ramifications of yesterday’s pronouncements in the coming weeks.  Until then, let us know what you think.

Chris Hoffmann
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