An economics professor from MIT, Jonathan Gruber was the instrumental force behind the Massachusetts law that was used as a blueprint for the Patient Protection and Affordable Care Act. EBA talked with the innovator about how the industry will change for all and why he thinks the broker is the new tax preparer.
March is the three-year anniversary of the enactment of health care reform. How do you think it's being implemented so far?
Well, it's still early. There hasn't been a lot that's happened so far, but there were the so-called early deliverables of the law - I think those have gone pretty well. The biggest successes we've seen so far are increasing insurance coverage among young adults from 19 to 26 years old and starting to reduce spending for seniors. We've also seen a sizeable amount of insurance rebates due to the new MLR rule.
I think the piece that isn't going so well is the next step with states. A number of states have done a great job and are getting ready to go for 2014. But a lot of states are uncertain and there are other states that are, unfortunately, playing a terrible political game at the cost of their state residents in not developing exchanges.
Which states, specifically?
In terms of moving the legislative process forward, California, Maryland and Connecticut come to mind. Massachusetts was already there, of course. There are probably 10 states total that are ready for opening exchanges. Then there are the ones that are part of the large middle group that are sort of tip-toeing around legislation and preparedness for the law. The last group is the one that's the most worrisome to me. They're the states that are those stick-it-to-the-man conservative states that are trying to make political hay out of doing nothing.
What's your role in the rollout?
My biggest role is in Massachusetts where we have a lot of work to do to coordinate the existing law with new federal law. I've also worked with a handful of states to help them understand the implications of the new law for insurance coverage and premiums. I've done that with five or six states. Otherwise, I'm not doing that much - just out there as a cheerleader for the law and talking about its success in Massachusetts.
I have a comic book, a graphic novel, [Health Care Reform: What It Is, Why It's Necessary, How It Works] which explains health care reform, so I work with that too.
What do you think will happen for brokers in health exchanges?
Basically, it is hard to say. You think of brokers and agents as having two roles: one is presenting options to consumers and the other is advising consumers on the best option to choose. The second role fundamentally doesn't change - firms, employers will always need advice on the best option to pick. But the first role is going to change, and so the question is to what extent can they evolve to recognize that it's less necessary because that information is laid out more clearly?
So on the other hand, they'll have many millions of new customers who need their help with that second part. Brokers and agents need to evolve their role to be more of an information adviser.
What do you think advisers should know about PPACA that they might not already?
The main thing for them to focus on is this is not a government take-over. There are two senses in which they can be worried, and one sense is valid. One sense is, 'Gee, the government is promoting more direct information to the consumer.' The other sense is that it's going to be government-run - but that isn't true. This is an enormous expansion for private insurance - it's a whole new market for them. One half of their pie of responsibilities may be shrinking, but the whole pie is growing.
It's probably no secret to you that some brokers have not taken so kindly to PPACA. What would you say to a broker if he told you that, face to face?
I would give them my sympathy. They do a good job and I know they like their job and it's hard to evolve. I know a push is much harder than a pull, and that's what's happening to them here. But the medical world is changing for everyone and everyone will have to evolve. Doctors are going to have to accept more financial responsibility for the decisions they make, hospitals' reimbursements are changing, patients are paying more for their health care.
We just have an untenable situation with our level of health care spending in America and that's got to be addressed on multiple levels.
What do you see the health care landscape in America looking like 10 years from now?
Well, I think brokers and advisers will be more valuable than ever. I know they're all afraid of becoming travel agents, in terms of an industry model that's changed - they don't want to be a group of professionals that becomes obsolete. But the alternative is tax preparers. I see advisers growing into a robust advisory market akin to tax preparers. People will always be afraid of taxes - it's hard to keep up with the law and codes. There's going to be a market for who can play that role in health care.
Exchange or marketplace, which word do you think is better vernacular and why?
I think marketplace makes more sense - that's showing its role as the connector. These are going to be like Orbitz, but for insurance. It's all private insurance products and the government is setting out a better way [for people] to purchase them.
Anything else?
I don't want to belittle what the law will change, but I would recommend for your readers to not lose sight of the opportunity this provides for them. Recognize the opportunity.
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