On today's episode of Denim Rivet, we're joined by a repeat guest and friend of Gregory's, that's Iowa Insurance Commissioner, Nick Gerhart. Shortly after recording this episode, Nick announced his resignation and that he would not seek another term as Commissioner. We at Denim™ wish Nick and his family all the best as they continue creating their story and we thank Nick for his leadership over the years. You can call it a gut feeling, but we believe Nick will be sticking close to insurance technology and innovation in the years ahead.

Nick has had his hands full discussing the potential changes promised by a new administration regarding the Affordable Care Act (ACA). Keeping an eye on advancements in insurance technology and innovation, Nick was the only sitting Insurance Commissioner at the inaugural InsureTech Connect conference in Las Vegas. He's also given testimony before the United States Congress as they seek to learn more about the ACA. Nick has been warning that things are going to be changing, and has pointed to the need for a modern day Manhattan Project related to healthcare. What he means by this is getting a lot of smart people together to work toward a solution on a difficult problem. As of now the ACA doesn’t address cost in the system. Discussions need to be had across multiple industries, with hospital groups, insurers, consumers, and drug manufacturers. It won’t surprise many that information isn’t always easily conveyed to consumers - in fact, many people spend more time researching a new refrigerator purchase than they investigate their own health care options. Nick is looking forward to a future where innovation and streamlined communication help bridge the current gaps in the system to propel the industry forward.

Key Takeaways

If you haven’t already, please read Nick’s recent post on Ten Points to Help Improve the ACA. While he admits it's not perfect, it is a great starting point to address some of the major issues. One of these points directs attention to innovation in product design while encouraging limited underwriting so that healthy people can be rewarded for their behaviors.

Nick believes insurtech startups can help stabilize some current issues in the ecosystem. Many opportunities are going to rise on the education side, informing consumers in a meaningful, digestible way. The same goes for using risk assessments and rewarding individuals for their healthy behaviors. While there is ample data in the current ecosystem, knowing what to do with it in order to get people to be more healthy and make smart purchasing decisions is a small slice that seems like it is up for grabs.

If President-elect Donald Trump phoned Nick and asked him what they should call the changes to the ACA, whether it was a reform, a repeal, or restructuring; this is what Nick would have to say: it doesn’t matter what you want to call the changes, they are all going to take an incredible amount of work to implement. Keep in mind, carriers have to price their 2018 products and file them by May 3, 2017. Nothing makes carriers pull their products out of the market like uncertainty, and as of now that is the predominant message being sent.

Looking forward to 2017, Nick believes that the insuretech herd will be thinned out quite a bit. Businesses that aren’t working will go under and those that have merit will stay. Some of this is due to using “hope” as a strategy, and developing technology for a business strategy. Nick says that having a business strategy and developing technology to fit it is a more efficient, safer way to make a mark in the industry.

Links

Nick Gerhart’s Previous Episode on Season 1 of Denim Rivet

Nick Gerhart’s ACA LinkedIn Post