Good news for Obamacare has been rarer than an igloo in the Sahara desert over the last few months. However, Walgreen (WAG +0.00%) and the Blue Cross Blue Shield Association, or BCBSA, announced a partnership today that delivered at least a little bit of good news for the Patient Protection and Affordable Care Act, particularly for the health insurance exchanges authorized by the legislation.
Cries for help
To say that there has been confusion about Obamacare in the minds of the public would be a big understatement. More than 40% of Americans surveyed in April by the Kaiser Family Foundation didn't even know that it was still a law. Considerable consternation exists about the Obamacare exchanges.
In one sense, the legislation itself anticipated the need to help people understand the complexities of Obamacare. The bill included the use of "navigators" to help educate the public about new health insurance options. In April, $54 million was allocated to begin hiring these navigators. Another $150 million will be on the way later to help local health clinics provide guidance to uninsured individuals seeking to use the exchanges.
Sensing that even more assistance was needed, Health and Human Services Secretary Kathleen Sebelius embarked upon a controversial effort to line up companies and nonprofit organizations to help promote Obamacare exchanges. Sebelius personally contacted two organizations, H&R Block (HRB +1.11%) and the Robert Wood Johnson Foundation, to ask for money to support the cause.
While the Robert Wood Johnson Foundation has kicked in several million dollars in promoting Obamacare over the past few years, as of mid-May H&R Block said that it had "not made any decision to join any specific advocacy or other health-care organization." The company does see opportunities with advising its clients on how to comply with the tax provisions in the law.
The White House also recently attempted to gain help from the National Football League. The NFL opted, though, to take a pass on promoting the exchanges. According to NFL spokesman Greg Aiello, the league has "no plans to engage" in efforts to help publicize Obamacare.
Walgreen and the Blues to the rescue
All of this makes the Wednesday announcement by Walgreen and the BCBSA especially welcome by the administration. The two organizations joined forces to launch a national campaign with the goal to help people understand the new health care reform law.
The centerpiece of their effort is a website, LearnAboutReform.com, which currently redirects to a page on the Walgreen website. This site provides explanations for what Obamacare means for consumers and how the new exchanges will work. It also answers questions about federal financial assistance and penalties for not purchasing insurance.
Walgreen will offer informational brochures about the health reform legislation at most of its 8,000 drugstores across the U.S. Details about the costs of these efforts or any other possible promotional activities by the organizations weren't provided.
What's in it for them?
Don't expect Walgreen or any of the members of the Blue Cross Blue Shield Association, which includes 14 plans owned by WellPoint (WLP 8.15%), to talk about any benefit that they might obtain from promoting education about Obamacare. That doesn't necessarily mean that they won't receive any benefits, though.
As for Walgreen, the company could gain more business as consumers join the health exchanges. Uninsured individuals are less likely to buy prescription drugs. Also, confused seekers of new health insurance might be more likely to visit Walgreen stores for filling prescription drugs than other drugstores if they perceive those stores as more helpful in navigating the Obamacare waters.
For the Blues plans that participate in Obamacare exchanges, public perception that they're being helpful could conceivably boost the numbers of people selecting their insurance offerings. The insurers also have a vested interest in promoting the exchanges for healthier individuals, whose enrollment helps offset higher costs associated with less healthy members.
Pushing Obamacare exchanges is a double-edged sword, though. WellPoint expects reduced profit margins as small employers send employees to the insurance exchanges. Susquehanna Financial Group financial analyst Chris Rigg estimates that the company could give up profits of around $400 million over a four-year period. With the delay of the Obamacare employer mandate, the start of that period will push back by a year.
What's next
The verdict is still out as to whether the exchanges will actually be operational by the scheduled date of Oct. 1. The Government Accountability Office, or GAO, says that the likelihood of a successful launch by the deadline "cannot be determined." With less than 90 days remaining, good news for Obamacare will need to be more commonplace than those Sahara igloos.
