Health MATTERS:
How will healthcare affect your small business?

And what are you—the employer—going to do about it?

By Ted Blotsky, Reprinted with permission from the Spokane Business Journal

In 2007, national health care spending grew by 6.9 percent—which at that time was twice the rate of inflation. This year, Washington state's health insurers estimate an average 22 percent rate increase—or more. In retrospect, it’s likely that most employers would consider a 6.9 percent increase a pretty good deal.

Given the passage of the 2000-page Patient Protection and Affordable Care Act, and the Supreme Court's subsequent ruling that validated the legislation's constitutionality, one may be tempted to think there's nothing more to be done. But it's not the end, folks; it's only the beginning.

Careful reading and analysis of the Court's ruling—as well as wrangling over many of the details—will likely take months, if not years. Teams of lawyers at the Department of Health and Human Services are still filling in the fine points to this massive legislation, and if there is a change of power in the White House, subsequent budget cuts could take the teeth out of the landmark legislation.

Health insurance is already one of the most heavily-regulated sectors in our state's economy, but the reform act has triggered even more expansion and regulation of state health plans. Even as analysis drags on, there is a time table built in to the law, and employers will soon have some tough decisions to make.

To insure or not to insure

We hear every day from business owners who are trying to make those decisions, but are confused. For example, beginning in 2014, employers who choose to not provide employee coverage, and employ more than 50 people, will be penalized to the tune of $166.67 per month for each full-time equivalent (FTE), minus the first 30 employees, who are excluded.

Here is a simplified example of an employer with 55 FTEs: Subtract 30 from the FTE count of 55, to get 25; multiply that number by $167 per month to get $4,175 monthly; and multiply that by 12 to get $50,100 annually.

There are pages of variables to determine the dollar impact, but they depend on possibly-confusing terms such as "full-time equivalent" and "temporary" versus "seasonal" employee as well as factors such as an individual employee's household income. There is more to this calculation. But you get the idea.

Furthermore, employers that decide to provide coverage may also be assessed a penalty if their employees decide to go for the option of subsidized coverage from their state’s Health Exchange, in which case, an employer could be assessed a penalty as high as $3,000 per employee!

Confused? That’s understandable. And it’s just a short list of issues employers need to consider that could cost their business thousands of dollars. Issues still being developed or debated but likely to affect the bottom line include the possible closure of “grandfathered” health plans, whether insurers will be forced to provide certain types of plans and questions regarding expansion of powers within the Insurance Commissioner Office.

No matter how these details shake out, until the new law takes over, you still have decisions you'll need to make about medical coverage for your employees. For the short term, you’ll need to know your options and compare apples to apples. During these confusing transitions, you’re going to need a knowledgeable health benefits partner that can work with you. If you don’t have a producer (broker), find one.

Someone is getting into your pocket

By far the greatest impact is likely to be felt in regard to the financing of the state Health Exchange provisions of the act. The various state exchanges will require a substantial infrastructure and deep pockets. We are seeing estimates that between now and 2017, the Washington state deficit will grow an average of more than $50 million each year because of the Exchange.

Where will the money come from? It’s likely that the dollars needed to finance Washington state's planned health care provisions as well as ACA directives, will partially come from insurers, through assessments. In addition, employers will pay the piper through increased premiums and new employee taxes. Ultimately, however, the health care bill will be paid out of your pocket and mine, in the form of increased taxes and burgeoning national debt.

As a business owner, it is critically important for the health of your business as well as the health of your employees and families to get informed and find out where your elected officials stand on healthcare-related issues.

Looking for more information? On Tuesday, Oct. 23, Associated Industries and our health care partners at ODS Health are providing sponsorship of an AWB Healthcare Forum: “Healthcare: What’s at Stake in Washington state?” – an informative, understandable discussion about health care reform and what it means to your company. Learn more at at www.awb.org.

Health MATTERS:
Recent health tracking poll finds negative public mood regarding health reform la

I think the following Poll – conducted by Kaiser Family Foundation – resulted in some interesting opinions on the healthcare reform. The October poll is the latest in a series designed and analyzed by the Foundation’s public opinion research team.

-- Ted Blotsky, Senior Vice President,
Employee Benefit Services

The October health tracking poll finds a more negative overall public mood about the health reform law, driven largely by changes in support for the law among Democrats.  The poll also asked the public’s impressions of the Massachusetts health reform law enacted under then- Gov. Mitt Romney, who is now a candidate for the Republican presidential nomination.   Findings from the poll include:

After remaining roughly evenly split for most of the last year and a half, this month’s tracking poll found more of the public expressing negative views towards the law. In October, about half (51%) say they have an unfavorable view of the Patient Protection and Affordable Care Act (ACA), while 34 percent have a favorable view, a low point in Kaiser polls since the law was passed.

While Democrats continue to be substantially more supportive of the law than Independents or Republicans, the change in favorability this month was driven by waning enthusiasm for the law among Democrats, among whom the share with a favorable view dropped from nearly two-thirds in September to just over half (52%) in October.

Health MATTERS:
First numbers are in on federal plan, but full impact is not yet known

by Ted Blotsky

The Pre-Existing Condition Insurance Plan, one of the early, big steps in the Affordable Care Act, went into effect July 1^st, and state-run and federally-managed programs alike began accepting applications. To be eligible an applicant must have been uninsured for at least six months and have a pre-existing condition.

Through August 9^th,2010, about 2,400 people had applied for coverage through the federally-managed program, which is administered by the U.S. Department of Health and Human Services. The federally-managed program is in effect in the 22 states that have declined to operate their own program.  Of the 2,400 applications to the federal plan, 750 had been approved, and about 140 people were enrolled and getting coverage.

The 22 states under the federal plan cited cost of administration as the main concern when declining to operate their own plans.

Washington State had a high-risk insurance plan in place before the federal law went into effect. Known as “the Washington Health Insurance Pool,” it has 3,600 people enrolled with an annual cost of $71million and is available only to people who have applied for individual insurance and have been rejected by health insurers.

Effective July 1^st, Washington began receiving $102 million, which will be doled out over three years, for the high-risk program. In all, the National Health Care Reform included $5 billion to be allocated to states for high-risk pool applicants to be used before new regulations go into effect in 2014. To be eligible, an applicant must have been uninsured for at least six months and have a pre-existing condition.

These pools are a temporary fix designed only to last until 2014, when new regulations will go into effect requiring insurance companies to accept all applicants, regardless of pre-existing conditions.

The 2,400 enrollees-to-date figure cited above does not include state-operated plans, such as those in Washington State and 37 other states. With state data unavailable at this time, we don’t know the full extent to which uninsured people are taking advantage of the plan. Concerns still exist that the $5 billion allocated will be spent long before the regulations go into effect. This is something we’ll be monitoring closely in the coming months.

Health MATTERS:
High-risk pools set to begin, but funding, fairness questions remain

by Ted Blotsky

This month, the high-risk insurance pools called for by the new healthcare reform law will be established, and the first $5 billion allocated under the law will start to be released.

The high-risk insurance pool is designed to provide healthcare coverage for high-risk patients who otherwise might not be eligible for insurance benefits.

High-risk pools already exist in 35 states—Washington State is among them—but the programs are underfunded and only cover about 200,000 people nationwide. The high-risk pool option will be available to people in every state.

These pools are a temporary fix designed only to last until 2014, when new regulations will go into effect requiring insurance companies to accept all applicants, regardless of pre-existing conditions.

States had to let the U.S. Health and Human Services Secretary know by April 30whether they would run the pools themselves at state level or opt to let the U.S. Department of Health and Human Services administer the pool.  Washington State elected to handle the pool itself.  Eighteen states declined to administer the risk pools, citing cost of administration as the main concern. The federal government will establish pools in those states, with money allocated based on population size and a few other factors.

The main concern about these pools is that the $5 billion allocated will be spent long before the new regulations go into effect in 2014. The chief actuary at the Centers for Medicare and Medicaid Services has predicted that the new program will run out of money as early as next year. In coming years, state officials could be forced to reduce health coverage, raise premiums or ask state taxpayers to pay for these high-risk pools once federal funds run dry. We’ll be monitoring this issue closely.