The Patient Protection and Affordable Care Act (PPACA) is changing the US health care landscape and re/insurers have been obliged to respond, often through enlarged teams and a new approach to such risks.
Hiscox is one such company, appointing Justin Keith, formerly of Ironshore, to underwrite hospital professional liability and healthcare risks. As Ian Thompson, senior vice president, healthcare at Hiscox explained: “health care has had an interesting time over the last couple of years, it’s been headline news, but as an insurance line it’s been a star performer.” He said that this success was the major driver of the expansion of their health care team. Thompson said that the company had received a “fantastic reaction from the broker and client communities” to Keith’s appointment.
Explaining the changed landscape, J.D. Piro, national practice leader for Aon Hewitt’s health law group said “the Patient Protection and Affordable Care Act requires insurers to sell a comprehensive set of benefits, requires them to sell it to whoever wants to buy it, regulates the premiums and the ability to rate premiums according to pre-existing conditions, and regulates the insurers ability to terminate coverage except in very limited circumstances. But in exchange for all those regulations, 30 million new people will enter the market for health insurance.”
Piro added that the business model had changed from “one based on margin, to one based on volume”, with insurers expected to participate in exchanges and an expanded Medicaid. Thompson commented that Obamacare was prompting considerable consolidation that the industry is having to respond to, which he described as “cause for concern”. He concluded that the best way to navigate the new environment would be building on existing positive relationships.