ACA: For pharmacy retailers, is it helping or hurting?
WHAT IT MEANS AND WHY IT'S IMPORTANT — Pharmacy retailers have a relationship with the healthcare-reform law more complicated than most individuals and businesses.
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On the one hand, healthcare reform means a whole slew of new patients who will be lining up to get their medications at drug stores, supermarkets and mass merchandisers. According to a study published in the July 2012 issue of the journal Health Affairs, the Patient Protection and Affordable Care Act will reduce the number of uninsured people by about 30 million by 2012. As a result, retail sales of prescription drugs are expected to reach $483.2 billion by 2021, compared with $277.1 billion in 2012. In an analysis of the study, Pembroke Consulting's Adam Fein estimated that healthcare reform would add nearly $26 billion in annual drug spending by 2021, with prescription drugs accounting for 10.1% of healthcare spending, compared with 10% today.
At the same time, the ACA, which the Supreme Court ruled to be constitutional late last month, will impose penalties on employers that don't offer affordable health insurance to full-time employees when the full law takes effect in 2014. After the decision, the human resources consulting firm Mercer polled more than 4,000 employers, with a majority saying they had been waiting for the court's decision before developing a strategy to respond to the law's provisions. Forty percent said they would begin taking action now, while 16% said they would wait until the November elections; Mercer itself said it advised employers to "stay on track" to comply with the law as enacted.
Mercer president for health and benefits David Rahill said that employers with large numbers of part-time employees — including healthcare organizations and retailers — would have the difficult choice of increasing the number of employees eligible for coverage or having them work fewer hours. "With the average cost of health coverage now exceeding $10,000 per employee, a big jump in enrollment is not economically feasible for many employers," Rahill said.
The National Retail Federation represents retailers in a variety of markets that the ACA will affect in a variety of ways, but for pharmacy retailers in particular, it remains to be seen whether the law will be beneficial, detrimental or will even itself out in the end.