Health law to boost data management companies

President Obama's signature healthcare law will prove a boon to data companies such as Xerox and Hewlett-Packard as states begin the massive task of expanding Medicaid.

The two firms — rivals — operate data systems for Medicaid programs around the country. Both are poised to profit from the program's expansion.

"There is near-term growth and wind at your back if you can deliver," Paul Keckley, a health consultant with Deloitte, told Kaiser Health News.

Growth in Medicaid was seen a fundamental by authors of the Affordable Care Act.

The idea was to expand the low-income health insurance program to meet the bottom level of eligibility for the law's state exchanges, creating an umbrella of total coverage for people without other access to insurance.

The Supreme Court's ruling to uphold Obama's healthcare law made the Medicaid expansion optional.

But that does not detract from the major role data management companies will play in the future operations of the program, expanded or not.

Firms such as Xerox and HP build Medicaid's technical backbone, with systems to detect fraud, check eligibility and process claims.

For Xerox, the contracts are worth nearly $1 billion per year. The company is now eyeing the healthcare law's insurance exchanges as another possible source of business.

Those marketplaces require a system that will match consumers with health insurance options in a process comparable to booking a flight.

The technical infrastructure will be massive. Xerox has already won has already won Nevada's exchange contract, worth $72 million.

Read more about data companies' role in Medicaid and the Affordable Care Act at Kaiser Health News.

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