Both the percentage of employers who offer insurance and the percentage of people covered will be important to watch as the changes brought about by the Affordable Care Act (ACA) continue to unfold. New coverage provisions and financial assistance provided in the ACA affect employers’ decision to offer coverage and employees’ decisions to take up any coverage they are offered at work. The employer shared responsibility provision, for example, requires employers with 50 or more full-time equivalent employees to offer coverage to full-time employees and their dependent children or face a financial penalty.
The administration has decided to explore the ‘next chapter’ of healthcare reform, rather than focusing on the issues of access and affordability.
The administration continues with an aggressive agenda to make administrative changes that impact millions of people without benefit of congressional input.
The latest changes that the Obama administration wants to make to Medicare Advantage plans offered to retirees of companies, labor unions, and municipal governments—called Medicare Advantage Employer-Group Waiver Plans (EGWP, pronounced “egg whips”).
Most of the criticism of Obamacare by its right-of-center opponents has focused on its regulatory mandates, botched implementation and rising premiums for less-favored purchasers. Far less attention has been paid to how little the new health law accomplished in fulfilling its advocates’ promises to boost the growth of small business and new entrepreneurial start-up firms.
The Bureau of Commercereports that new business formation inched up slightly for a few years from its low point in 2010 – after four years of decline. But its 2013 figure of 406,000 new businesses remains far below the recent pre-recession peak number of 560,000 in 2006.
Similar measures of entrepreneurial activity by the Kauffman Foundation find modest evidence of recent upticks, but levels still below historical norms.
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Liberals have been claiming for decades that U.S. companies are at a disadvantage because they help finance health insurance for their workers while their competitors in nations with government-run health systems don’t bear those costs.
Instead of addressing the problem, ObamaCare made it worse.
- The law mandated that U.S. firms provide their workers with health insurance or pay a fine of $2,000 to $3,000 per worker, and imposed significant regulatory compliance burdens on them.
- The American Action Forum estimates that the Affordable Care Act has imposed costs of $50.1 billion in state and private-sector burdens and added 177.9 million annual paperwork hours.
- The Congressional Budget Office estimates that the law will result in a reduction in work hours equivalent to the loss of two million jobs over the next decade.
Highmark Health is cutting reimbursement to doctors by 4 percent effective April 1 for care provided to patients with health insurance bought through the government exchange — the latest effort to trim losses in a market segment that has caused headaches for carriers nationwide.
All Pennsylvania doctors who participate in Highmark’s health insurance plans and treat patients with coverage required by the Affordable Care Act will be affected by the reimbursement cut, said Alexis Miller, senior vice president of individual and small group markets.
The doctors’ pay cut is needed to stem losses in individual health-law coverage as the insurer looks for other ways to stop the bleeding, Ms. Miller said.
According to the Kaiser Family Foundation (KFF), average premiums in the workplace were up 24 percent for individual plans and 27 percent for family plans. The vast majority of privately insured Americans – 9 out of 10 – purchase coverage through their employers.
Cost-sharing grew even faster. KFF reports that the average deductible for all workers was $1,077 in 2015, up from $646 in 2010—a 67 percent increase.
Over the past 5 years, a typical family of four faced 43 percent higher health costs, including both premiums and out-of-pocket expenses. The Milliman Medical Index also shows that employer costs increased by 32 percent, from $10,744 in 2010 to $14,198 in 2015. That’s nearly $3,500 that could have gone into paychecks if health costs had not soared.
The Affordable Care Act changed employers’ role in the U.S. health care system. The ACA fundamentally altered the employer-based system by making the provision of health benefits mandatory rather than voluntary for employers with more than 50 employees and establishing minimum criteria for affordability and coverage. In addition, a “play or pay” model was created, providing employers with an exit: employees would no longer become uninsured if their employers dropped benefits but could instead purchase guaranteed and potentially subsidized insurance through public exchanges.
Two financial milestones are leading employers to evaluate whether they want to play or pay. In 2015, employers with more than 100 employees became subject to a shared-responsibility penalty for coverage that didn’t meet federal standards; further down the road, a 40% excise tax on coverage over a maximum dollar value (the so-called Cadillac tax) is due to go into effect (implementation was originally set for 2018, but Congress recently voted to delay it by 2 years). Although it’s still early in the game, employers are making key decisions that affect patients, health care providers, and insurers.
Many contractors who provide farm labor and must now offer workers health insurance are complaining loudly about the cost in their already low-margin business.
Some are also concerned that the forms they must file with the federal government under the Affordable Care Act will bring immigration problems to the fore. About half of the farm labor workforce in the U.S. is undocumented.
“There’s definitely going to be some repercussions to it,” said Jesse Sandoval, a farm labor contractor based in Stockton, California. “I think there’s going to be some things that cannot be ignored.”
President Barack Obama is having a tough time winning friends for his Cadillac tax.
His plan to dial back the unpopular ObamaCare tax on high-cost health plans, to be detailed in the fiscal 2017 budget he’ll release Feb. 9, has won him no applause from employers, labor unions or health insurers. The tax still must be repealed, they say, not merely modified.
“The ‘Cadillac tax’ cannot be fixed,” James Klein, president of the American Benefits Council, a nonprofit representing employers, said in a statement. “We’re glad the administration recognizes the ‘Cadillac tax’ is seriously flawed. But its impact in high cost areas is just one of its many problems.”
he Cadillac tax was apt to be politically unpopular. It was particularly apt to be unpopular with politically active groups, such as unions. It therefore seemed somewhat unlikely to us that the Cadillac tax would ever be actually allowed to take effect. Don’t be alarmist, we were told; the administration knows that all the parts of this law hang together. It will not start disassembling the complicated structure it spent so much time and political capital putting together.
And to be sure, the administration has not capitulated in the face of considerable political pressure. Well, it has not capitulated much. The White House did agree to push the implementation date back to 2020 from 2018. That ObamaCare’s principle architects want to be safely away from 1600 Pennsylvania Avenue before the Cadillac tax is implemented gives you a pretty good idea of how politically viable it is.