For the health policy world, the Supreme Court鈥檚 tough questioning of the individual mandate last week was a seismic event.
Cordani (Photo by Scott Eells/Bloomberg via Getty Images)
But in Hartford, Conn., the city sometimes called the epicenter of the insurance industry, David Cordani isn鈥檛 quaking.
Cordani is the CEO of Cigna, the nation鈥檚 fourth-largest health insurer. He says the insurance industry started changing itself before the Affordable Care Act became law in 2010. And the changes will continue regardless of what happens at the high court.
鈥淭he broader health care debate is way larger than the individual mandate,鈥� Cordani said during an interview in his sunny corner office, just a few hours after some of the justices seemed ready to聽聽the mandate.
Cigna, like the broader insurance industry, hasn鈥檛 taken a position on whether or not the mandate requiring Americans to buy health coverage is constitutional. Cordani points out that it really only deals with expanding care to people in the small-group and individual markets. That鈥檚 a fraction of the total number of people insured, and it鈥檚 not a major market for Cigna.
Cordani says the act does a fair enough job at expanding access to care, but it doesn鈥檛 do as much to improve the quality of care and drive down costs. That鈥檚 his focus: changing the way we think about insurance, from paying for 鈥渟ick care鈥� to paying for 鈥渉ealth care,鈥� driving consumers to stay healthy and giving doctors incentives to keep them that way.
鈥淲hat we鈥檝e been doing is innovating programs around that, with or without the Affordable Care Act,鈥澛燙ordani says.
He says Cigna is still deciding how and where to sell insurance in the new聽exchanges聽鈥� the health insurance marketplaces that will open for business in 2014. That鈥檚 not exactly easy, according to Tom Wildsmith of the American Academy of Actuaries. Actuaries evaluate future risk, and Wildsmith says what鈥檚 keeping them up at night is trying to figure out who they鈥檙e going to be covering next year.
鈥淭he challenge with health care reform is that it injects some uncertainty in the system that means that, even in the aggregate, we don鈥檛 know exactly how things are going to work out,鈥� he says.
Even if all of the rules were set in stone, there鈥檚 still uncertainty about who will be in a particular insurer鈥檚 risk pool and what the Supreme Court will do.
Among insurer worries: If the mandate goes, will the young and healthy buy in or will they wait until they are sick to buy insurance? And what if a state鈥檚 new baseline coverage 鈥� called聽聽鈥� is just too expensive?
鈥淚f essential health benefits package means that many of their customers will have to buy up from a Yugo to a Chevy, they are concerned that they may lose some customers in the buy-up process,鈥� Wildsmith says.
Karen Ignagni, CEO of America鈥檚 Health Insurance Plans, the industry lobby, says insurers aren鈥檛 waiting to find out. They鈥檙e working with hospitals and doctors to change the way care is paid for and to keep costs down, just as Cigna鈥檚 Cordani wants. She cites 聽that say Medicare plans run by private insurers are succeeding at keeping seniors from being readmitted to the hospital after procedures.
鈥淲e鈥檙e leading the way, according to government data on readmissions,鈥� she says. 鈥淭hat鈥檚 a win-win on both sides. There鈥檚 real data now to support the contention that these strategies and these tools work very, very effectively.鈥�
What wouldn鈥檛 work, Ignagni says, would be to ditch the individual mandate and still make insurers continue to accept all comers regardless of the status of their health.
鈥淚n every state that tried market reforms without bringing everyone into the system, we saw those markets blow up,鈥� she says.
Insurers will be just fine 鈥� particularly if the part of the law that subsidizes insurance for lower income Americans survives the Supreme Court challenge, according to Mila Kofman of Georgetown University鈥檚 Health Policy Institute.
鈥淲e鈥檙e looking at billions of dollars into the pockets of the health insurance industry,鈥� says Kofman, who is a former superintendent of insurance in Maine. 鈥淪o I鈥檓 not worried about the health insurance industry and their financial health at all. This is going to be very good for their bottom line.鈥�
In fact, even on the day the Supreme Court looked like it was ready to toss the individual mandate, Cigna鈥檚 stock was up 4 percent and other insurers saw similar gains.