New coalition keeps focus on health care costs

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Much has been written in this space about the lift the Affordable Care Act will provide for the retail pharmacy business.

The addition of 30 million or more individuals to the ranks of the insured, a process that is now expected to take several years to complete, will significantly increase prescription drug volume and generate demand for other health care products and services. That prospect is particularly appealing to drug store operators, which, on average, derive 75% or more of their revenue from those sources.

The legislation is not, however, all good news for retailers.

Health care reform will result in insurance coverage, reporting and tax requirements that many in the business community think could well prove burdensome for companies of all kinds. A group spearheaded by the National Retail Federation has been formed to take on those issues by advocating policy changes that ensure the cost of health coverage is reasonable — for both patients and payers.

The Affordable Health Benefits Coalition — whose membership encompasses a wide variety of groups, including the U.S. Chamber of Commerce, the National Association of Wholesaler-Distributors, the Blue Cross and Blue Shield Management Association, the Pharmaceutical Care Management Association, and the Retail Industry Leaders Association — is focused on finding ways to ensure the ACA delivers on its promise of reining in the growth of health care expenditures.

“The coalition will promote regulations and nonpartisan policies that improve the affordability of coverage and care,” says Neil Trautwein, who is vice president and employees benefits policy counsel at NRF and the new group’s chairman.

For NRF and some of the coalition’s other members, the new initiative, an outgrowth of the Essential Health Benefits Coalition, represents a pragmatic response to the evolving health care landscape.

“NRF was opposed to the Affordable Care Act,” Trautwein notes. “It’s certainly not the legislation that we would have written. But we can count the votes in the Senate and see who’s in the White House. Given the current political alignment in Washington, we need to do what we can to make the reform process work as well as possible, because it’s not going to be overturned in the near term.”

Stacey Rampy, a principal at Mehlman Vogel Castagnetti who is also director of the coalition, adds, “We want to work with stakeholders and policy makers alike to address rising health care costs. While the immediate focus is on the health care reform law, the coalition also wants to foster a greater understanding of the multiple factors that contribute to higher health care expenditures.”

One of the group’s major priorities is to advance policies that foster the development of a risk pool with a sound mix of younger, healthy individuals and older people who are more likely to need health care services. Without it, both supporters and opponents of the ACA agree, the financial underpinnings of the system will quickly come under severe pressure, causing rates for those with insurance to skyrocket.

To achieve that objective, the coalition is asking policy makers to strike a better balance between affordability and plan design when determining essential health benefits; give employers and plan sponsors more flexibility in creating benefits programs, including in the areas of high-value provider networks and cost sharing; and adopt additional tools to promote continuous coverage.

Trautwein points out that seemingly minor policy distinctions can have a significant impact on businesses and the people who work for them.

One example is the question of what constitutes a full-time employee, which the ACA defines as someone who works an average of 30 hours a week. If that standard holds, he predicts, some companies will be prompted to rethink the composition of their labor force, and employees may not have access to as many hours a week as they would like. Trautwein and the coalition would like to see that benchmark raised to at least 35 hours a week, providing greater flexibility for businesses and workers.

While there may be room for disagreement about the definition of a full-time employee and other specific questions, the coalition’s overarching theme of ensuring that health care reform unfolds in a fiscally sustainable manner deserves serious consideration.

Unintended consequences in a sector of the economy that accounts for almost 20% of GDP could potentially have a devastating effect on companies and individuals.
NRF and the other members of the Affordable Health Benefits Coalition are to be commended for insisting that policy makers and other stakeholders remain focused on cost as health care reform progresses.

Emerson Industry Day 2022

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