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Humana CEO Mike McCallister on the impact of the Supreme Court health-care law ruling on insurers.
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Insurer Humana dropping this morning right after the health care decision was announced but the stock -- come back -- -- intraday lows later this separate actually closed in the green look at that.
Investors seemed to -- maybe a little confused as to what the law means for Humana -- business going forward so we're bringing in the chairman and CEO Mike McCallister.
To see how she sees it welcome -- good to have you are the law is now upheld for now at least the part about.
The insurance aspect of -- that mandate what will it mean for your business.
Well.
You know for the time being we've -- we're gonna keep keep doing -- and we were implementing the -- the law of the land today didn't change that has so we'll continue to do that we have to get ready for 2014 where some of the more significant.
Regulatory changes are gonna happen so we have a lot of work to do but we've been that it will just keep going.
By the way the moment the health care decision you look at daily tick of the stock.
It had a big drop when that when the help decision was finally announced correctly that that in fact the mandate had been approved -- called the tax instead of a penalty.
Our Humana stock went right down you can see -- it is at the red dot that was at the worst of it that it came back.
What was happening with the stock why did it take such a hit on the announcement that the mandate.
Would be sustained.
Well I think there was some confusion initially whether they're the -- this is saying you're not mean there -- reports were out all that -- was an hour after the decision it was a steady decline in the stock.
In and then CEO of this company for over twelve years I can always understood what pollsters think you're doing so.
I won't I won't try to answer that we'll tell you that.
That you know we have a lot of work to do this bill has some things I think -- gonna need to be.
I changed or adjusted over time there's some taxes and -- that it had been just disproportionately placed on.
Small businesses and seniors so you know we will work with the administration and others -- to go about the implementation try to.
Smooth that out as much as we can that 2014 is gonna be a really difficult a year and disruptive if we don't find a way to transition some of this work in.
What is the most difficult part of that you have to absorb and deal with that you'd like to see -- and if so what again what is it and how would you like to see change.
Well I think the biggest thing that's out there this of the some challenges the issue print of the taxes on the premiums.
-- -- we were trying to do all this you know affordable health care for for people we would all agree with that but in the process of doing that we've funded the bill by raising the premiums to everyone by putting taxes on -- so.
You know I think and it wasn't broad based it was done on insurance premiums and not the entire marketplace so as a result you have -- -- proportion.
Disproportionate part of those are portion of those taxes falling on small group -- smallest small employers which tend to have fully insured coverage.
And seniors -- private Medicare Advantage plan so I think that following the top of the list.
Do you expect premiums to continue to go up you think that they have made it may be found a new level because of all the new coverage you've been forced to absorb and and maybe they'll be steady now instead of that pop that we've seen over the past year and a half.
Well insurance in our for medical cost trends have a softening up some over over a number of years so little bit lower than they once were they're still multiple of the GDP growth so we've got -- -- the same issue in the economy.
I would say premiums are gonna continue to rise the underlying drivers of why premiums have gone up have not changed with this bill.
We will have more people in the system that'll shift some dollars around we are currently taking care of them and -- your miserable places now they'll have coverage.
But at the end of the day the drivers of health care costs which are.
First formal -- -- health status of the of the public.
Is it continuing to -- deteriorate.
Be a consolidation on the provider side.
That we had a lack of connectivity and insight insight into price equality the sort of things those things are evolving we're building those things out.
They were happening were and we're beginning to accelerate -- without the bill system those sort of things of the key business.
So that we can get at the actual actual drivers of costs because that's what drives premiums is really quite simple -- medical cost become premiums.
Well Mike can we can be just ask you what you think about the belief that by making sure everybody gets insurance that they don't -- show up at their worst possible moment.
On the front doorstep of a hospital and then that of course costs the rest of us more money that perhaps they will go for preventative care before it gets so -- Well we'll have a better opportunity now because they will have coverage you know the other things going on the marketplace is an evolving capacity to deliver care lower levels now you see.
These mini clinics and pharmacies around the country.
Nurse practitioners and her -- -- more for for basic thing so.
We're gonna we're gonna continue to move some of the basic health care down into more productive environment that's going to be less costly.
Having these people covered now is gonna give them an opportunity to access those new things as well some of the more traditional.
Places of case of care we clearly need to keep them out of emergency rooms are very expensive places to be treated and it's just not appropriate place for for much of the health care -- -- delivered.
My -- qualitative reading quantitative question here -- the best way I think a lot of people believe the best way to stay in the cutting edge.
Of technology.
And innovation in health care is in the private sector not the government's I think everybody would agree on that.
Are you afraid that as you see more parole of the government in the payment schedule for health -- you're gonna see less innovation on the part of the private sector.
I think that is one of the big dangers as the government is further corporate health care because it.
There's some wonderfully innovative things going on out here today.
It's under the Medicare Advantage business we do we're collaborating with providers and setting up organized systems we're getting much better -- do -- data analytics predictive modeling type of things.
Taking care of chronically ill people helping them stay in their homes getting transportation some of the stuff pretty basic getting transportation to -- the doctor's office making sure they take.
The right drugs and they're not taken things a conflict we've -- each other making sure they do take them -- -- -- pretty technology and -- so that they can interact with nurses and other so.
A lot of innovation and -- that's one of the dangers of having.
The government take on to bigger owner Mike McCallister Humana CEO -- to -- thank you Mike secular.
