A look at the health care horizon

This year, the HHS has issued a truckload full of directives, at the “discretion of the Secretary,” about new federal guidelines relative to continued implementation of the Act (PPACA).

The frenzy of activity and paperwork surrounding these new initiatives has been staggering and almost overwhelming to states, businesses, advisors, agents and brokers, legal and financial analysts, employers and virtually everyone else who is concerned about how health care is going to shake out by 2014. And that is assuming that the Supreme Court doesn’t toss the whole mess into the depths of a legal abyss dependent upon on whether the Act stands or falls based on the Court’s consideration and interpretation of its Constitutionality.

In light of the new legislation, much of it being made up as time goes along each day, it behooves all stakeholders to step back before the end of this calendar year to analyze what may work best for the potential outcomes and what is already in place. Regardless of your feelings about ObamaCare, the reality is that the industry is moving toward permanent adoption of some of its tenets, whether good or bad. And, what is its interpretation by the ever fickle voting public? How do most Americans view the health care Act?

The short answer is that it depends upon your political camp. Conservatives see PPACA as a huge millstone around the neck of Americans, and the weight of it bankrupting the businesses and families of the nation for generations to come and drowning everyone in massive debt for decades. Liberals see it as the new panacea to fix all things health care. The answer, realistically, is somewhere in between.

One year after the passage of sweeping health insurance reform legislation, the lasting impact of the Patient Protection and Affordable Care Act (PPACA) on the small-business community remains to be seen. However, according to a new study by the National Federation of Independent Business (NFIB), the overwhelming majority of small-business owners don't expect the law to reduce cost or regulatory burdens, and nearly two-thirds agree that the law will result in premium increases but not in better care.

When it comes to health insurance reform, perception is reality. The majority of America’s small employers simply do not believe that the law will accomplish most of what it promised to do.

The first significant tangible consequence of the new law for the small-business community is the elimination, or looming elimination, of health plans that small employers purchase; 12 percent reported that their plan is or will be on the chopping block, and that percentage is likely to rise when the law takes full effect. Other major study findings are summarized below, according to the NFIB:

Small Employers Who Offer: The net number of small employers (those employing 50 or fewer) who provide coverage is largely unchanged (42 percent) from the number offering prior to the passage of PPACA, suggesting that the law did not provide significant reason for non-offering employers to begin covering employees. Small employers who do offer health insurance are also unlikely to drop their coverage over the next 12 months. Generally speaking, employers that offer health insurance have a far more pessimistic view of PPACA and its anticipated effects, as compared to those who do not offer insurance.

Changes to Plans: Twenty (20) percent of small employers currently offering coverage expect to significantly change their benefit package and/or their employees’ premium cost-share the next time they renew their health-insurance plans. Almost all expected significant changes involve a decrease in benefits, an increase in employee cost-share, or both.  Employers who even slightly alter their benefits packages to reduce costs will likely be exposed to more regulations and cost increases in the future.

No Incentive to Start Offering: The new law was expected to increase the rate of employer-sponsored insurance. However, today’s study suggest that PPACA will not encourage non-offering employers to begin providing coverage; nearly 87 percent of non-offering employers say they are either “not too likely” or “not at all likely” to be offering coverage a year from now, suggesting that the law’s incentives to providing coverage are ineffective.

The Tax Credit: The law’s tax credit for small businesses acts almost exclusively as a windfall for those who currently offer health insurance rather than as an incentive to encourage its purchase. Considering eligibility and awareness issues, the full credit incents, but does not necessarily change behavior, of only about 2 percent of small employers having fewer than 25 employees.

According to the Administration’s estimates, nearly 4 million small businesses would be eligible for the tax credit. However, today’s study found that only an estimated 245,000 (out of 5,228,000 employers with fewer than 25 employees) are eligible for a full PPACA tax credit and 1.165 million are eligible for the partial credit – less than half of the estimate produced by the White House.

So, the end result is that some benefit and some don't. Has there been improvement in some areas of coverage? To a degree, yes, but the burden of proof has been on the government. And so far the results are lacking. Costs are increasing, not decreasing as promised. More regulations are being made up daily versus using existing laws that if reworked could help streamline the process instead of strangling health care providers, insurance companies, businesses and the American public.

Is there room for improvement? Yes, quite a bit. But the overall affect of the current federal plan is more onerous than it is helpful. Maybe cooler heads will prevail as time moves forward, but the concept of health care for all as a right needs serious soul searching by those promoting it as a legal agenda. The Constitution names only a few rights, and health care is not named as one of them.

Can the health care and insurance industries do a better job of service, delivery and improvement of care? Yes, they can. But the government does not need to take ownership – just provide direction without heavy-handed mandates.

Viewing the future is difficult. It takes perception, vision, insight, ethical conduct and a strong desire to see the greater good accomplished. It’s never easy and often can be painful. Change is never easy, and based on how much is required, the end results are sometimes different than the original intent.  

When the Founders were drafting America’s operating manual, they did have the foresight to draft controls. Now, 235 years later, looking forward, the concept of Constitutionality is more important than ever before.

About the Author
Mark Roberts

Mark Roberts

Mark Roberts’ professional sales background includes 30 years of sales and marketing in the tax, insurance, and investment markets. Mark is a licensed life, health and accident insurance agent in all 50 states and D.C., for insurance products, and discount health plans. He serves as Manager of National Accounts at Careington International ( www.careington.com ). Additionally, Mark has been writing a health care blog for the past three years, found at www.yourbesthealthcare.blogspot.com , which is a topical weblog about various health care issues. He also regularly contributes articles to magazines for both medical and dental topics both in the U.S. and the UK. You can reach Mark at markr@careington.com.

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