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article imageHealth insurance companies 'scared to death' about Romney victory

By Yukio Strachan     Oct 29, 2012 in Health
Ellen DeGeneres isn't the only one who fears a possible Mitt Romney presidency, if elected some health insurance companies "are scared to death about what he's going to do."
The Patient Protection and Affordable Care Act promises the most sweeping reforms to the nation's health care system in almost half a century. Under this system, people can seek out preventative health measures instead of resorting to the emergency room. In the long run, health care costs will go down, while the quality of life will continue to rise, PolicyMic says.
Were Romney elected, he said he would repeal the Affordable Care Act -- the first day in office. Federal and state bureaucrats and the health care industry already foresee months of uncertainty: Would they follow the law on the books or the one in the works? What would federal courts tell them to do?
Although the industry hates parts of President Barack Obama's health care law, major outfits such as UnitedHealth Group and BlueCross Blue Shield also stand to rake in billions of dollars from new customers who'll get health insurance under the law. The companies already have invested tens of millions to carry it out, Business Insider said.
"There are a lot of dollars and a lot of staff time that's been put into place to make this thing operational," G. William Hoagland, until recently a Cigna vice president, said of the health care law.
Nothing of substance to replace it with
At the same time, Romney has hinted that he would not just repeal the Affordable Care Act but also replace it - and critics contend his campaign has provided scant information on just what would replace the law.
"They have nothing of substance to replace it with," said Robert Laszewski, an industry consultant and former health insurance executive, according to the Journal Sentinel. "And that's the important thing to understand."
America's Health Insurance Plans, the major industry trade group, isn't talking about what its members are telling the Romney campaign, though informal discussions are under way through intermediaries. Insurers like Romney's plan to privatize Medicare, and some point out that it looks a lot like Obama's approach to covering the uninsured.
Laszewski, who also writes a respected blog, the Health Policy and Marketplace Review, says the tension is becoming unbearable.
"I spend a lot of time in executive offices and board rooms, and they are good Republicans who would like to see Romney win," said Laszewski. "But they are scared to death about what he's going to do."
Without ACA: 30 million uninsured people
In contrast, in a little over a year, some 30 million uninsured people will start getting coverage through a mix of subsidized private insurance for middle-class households and expanded Medicaid for low-income people. Many of the new Medicaid recipients would get signed up in commercial managed care companies.
A recent PricewaterhouseCoopers study estimated the new markets would be worth $50 billion to $60 billion in premiums in 2014, and as much as $230 billion annually within seven years.
Under the law, insurance companies would have to accept all applicants, including the sick. But the companies also would have a steady stream of younger, healthier customers required to buy their products, with the aid of new government subsidies. That finally could bring stability to the individual and small-business insurance markets,according to Business Insider.
At a time when employer coverage has been eroding, government programs such as Medicare, Medicaid, and now Obama's law are becoming the growth engines for the industry's bottom line. The trend seems too big to derail, says Morningstar analyst Matthew Coffina, who tracks the health insurance industry.
If Romney wins he's more likely to reduce the scope and scale of the law, Coffina said. Possibilities include delaying all or parts of the new coverage, particularly a Medicaid expansion that GOP governors don't like.
The industry has three items in particular it wants stripped out: cuts to Medicare Advantage private insurance plans; a requirement that insurers spend 80 percent of premiums on medical care or rebate the difference to their customers; and new taxes on insurance companies. But CEOs don't share the visceral objection that many Republicans have to a bigger government role in health care, Business Insider said.
Industry executives "are Republicans in the sense that they're worried about the bottom line and they want to retain private sector involvement," said Hoagland, the former Cigna vice president. "But some of their bottom line is now driven by Medicare and Medicaid. So it's not like they're red or blue. It's more like purple."
More about Health insurance, Mitt Romney, Obamacare, 2012 presidential election, President barack obama
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