ACA, affordable care act, Bay Area financial planning, economy, employee benefits, full-time employees, government, health care reform, health insurance, health insurance cost, increased premiums, medicaid, medicare, obamacare, pre-existing conditions, state exchanges, state insurance exchanges, Wealth Management Associates
Can the federal government follow through on its ambitions?
Provided by Brian Damiani
In 2014, we were supposed to see profound health care reform per the 2011 Affordable Care Act – but how much of that reform will roll out on time?
The federal government has already conceded that it can’t enforce the employer mandate portion of the Affordable Care Act by 2014. On July 2, the Obama administration gave businesses with 50 or more employees a 1-year reprieve from having to provide affordable health insurance to full-time employees (people working 30 or more hours weekly).1,2
So how about the state health insurance exchanges that are scheduled to be up and running by October 1? How about the planned expansion of Medicaid? Will these reforms also be delayed? The House of Representatives has scheduled a mid-July vote to attempt to do just that. Lastly, do small businesses have any enthusiasm about health care reform?3
What’s the progress on the state exchanges? The progress report isn’t good. As the Wall Street Journal noted last month, even the Government Accountability Office thinks that a “timely and smooth implementation of the exchanges by October 2013 cannot yet be determined.”4
Small businesses and the self-employed are supposed to be able to find affordable coverage through these online marketplaces. The small business exchange rollout has already encountered glitches. In some states, only one insurance carrier has shown interest in them; the state of Washington is simply postponing its exchange because no carrier wanted to provide small business plans statewide. In 2014, businesses will be asked to select and offer one insurance plan from the exchanges to their workers. In the initial conception, they could elect to offer employees multiple insurance options. The federal Centers for Medicare & Medicaid Services are overseeing the implementation of the individual exchanges in 33 states; 17 other states and the District of Columbia are setting up their own exchanges.4
Individual exchanges in 34 states will be created via the federal government – but on July 5, it quietly granted another concession. The Department of Health and Human Services relaxed a requirement for the 16 other states and the District of Columbia to verify the income and health coverage status of applicants to those individual exchanges. These 17 exchanges will only check the income eligibility of applicants at random next year, and they will wait until 2015 to check if applicants are getting employer-sponsored health benefits.5
The WSJ learned that states running their own exchanges had missed, on average, 44% of the interim deadlines for these projects through the end of March. Still, DHHS chief technology officer Todd Park told CNBC that the state exchanges are “on track” and will allow open enrollment beginning October 1.4,6
Where do things stand state-by-state with the Medicaid expansion? Just 23 states and the District of Columbia have signed up for it. (You’ll recall that the Supreme Court allowed states to opt out of it when it ruled that the ACA was constitutional in 2012.) In these states and in Washington D.C., those with earnings of up to 138% of the federal poverty level may qualify for Medicaid (that works out to earnings of $15,856 for an individual and $32,499 for a family of four). The expansion of Medicaid in these states doesn’t require the federal government to recreate the wheel, but delays could happen in other ways. In Michigan, for example, state legislators have passed their own version of a Medicaid expansion requiring a 90-day federal review process, which will put Michigan weeks behind in enrolling participants in expanded Medicaid coverage.6,7
Do employers even care about the ACA’s incentives? The ACA opens the door for employers to markedly increase the percentage of employee benefits represented by wellness incentives. Yet in a survey of 1,000+ employers conducted by Virgin HealthMiles and Workforce Magazine, just 25.8% of companies surveyed said they intended to draw on wellness provisions of the ACA to enhance employee health benefit offerings. A lack of information about such incentives may be a factor here for both employers and employees. In fact, the survey also polled almost 10,000 workers at these companies and found that while 87.2% looked at health and wellness packages when considering a job, half of the respondents said they were “not aware of, or need to know more about, health and wellness programs offered by employers.”8
Frankly, what’s to get excited about? An analysis from insurance consulting firm Millman says that individual premiums could grow 25-40% costlier due to the ACA with small market group premiums rising 6-12%. On the other hand, Humana estimates that by renewing individual and group health plans before 2014, a workplace with predominantly younger and healthier employees could see rates rise by 15% or less. Unsurprisingly, a number of major carriers are expected to offer early renewals.9
President Obama noted the possibility of “glitches and bumps” along the way to the ACA’s full implementation. They are evident now.
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1 – kansascity.com/2013/07/03/4328512/qa-on-impact-of-health-law-delay.html [7/3/13]
2 – money.cnn.com/2013/07/03/smallbusiness/obamacare-employer-mandate/index.html [7/3/13]
3 – abcnews.go.com/blogs/politics/2013/07/house-to-vote-next-week-to-delay-individual-mandate/ [7/11/13]
4 – online.wsj.com/article/SB10001424127887324520904578553871314315986.html [6/19/13]
5 – reuters.com/article/2013/07/08/us-usa-healthcare-obamacare-idUSBRE96700R20130708 [7/8/13]
6 – webmd.com/health-insurance/news/20130711/is-us-health-care-reform-on-track-for-2014 [7/11/13]
7 – lansingstatejournal.com/article/20130707/NEWS04/307070073/Clock-ticking-Michigan-Medicaid-expansion [7/7/13]
8 – benefitspro.com/2013/06/03/employers-ignoring-ppaca-wellness-incentives [6/3/13]
9 – benefitspro.com/2013/05/31/putting-off-ppaca-with-early-plan-renewals#.UdQRNFW13Vk.email [5/31/13]