By now we all have formed our own opinions of what we think about Healthcare Reform (aka ObamaCare). But do we all really know how it will affect us? Sure the highlights sound good, coverage for those with Pre-existing conditions, preventative care for everyone covered at 100%, penalties for those employers that do not offer us healthcare; yes, these all sound promising. The question is will this really fix our healthcare system or make it worse? Another key question is who is it going to affect the largest, or should I say who would it hit the homes of the fastest?
I will take you through a few of the key components of the Healthcare reform and point out a few key thoughts from my perspective and the perspective of a bunch of my clients that I have spoken with over the year. This is purely my opinion on how I feel this will affect our economy and my fears if we keep down the road without amending Healthcare Reform. Notice, I am not saying “Repeal” it as our healthcare system is broke. I feel America should fight for an amendment on Healthcare reform to be a more profitable and beneficial system to all participants.
Starting with the parts of the Affordable Care Act – Healthcare Reform, that I feel are very beneficial to the American people.
- Children can be covered under their parents plan until their 26th birthday regardless of school status. This is very smart as in today’s society, not many children are graduating college or finding good career jobs prior to age 26.
- Unlimited Lifetime Maximums. This one is also great, as policyholders paying premium for medical coverage should not be limited on their benefit over a lifetime for medical care. As before with certain medical conditions, the lifetime maximum, expending on the diagnosis; could expire that maximum very quickly leaving a patient uninsured and uninsurable.
There are other parts of this Act that I do agree with but feel they need tweaks in order to make them work better for society and the healthcare system. For instance, the Preventative Care Coverage. Yes, I enjoy getting my preventative exams covered at 100% just like everyone else; however, my question would be is it really free? Lets put this in perspective:
Upon going to the doctor for a preventative exam, if we are insured it is covered at 100%. This means we pay nothing to the doctor, facility or lab for the exam. The doctor/facility; however, charges your insurance “x” amount of dollars for the visit and the lab charges “x” amount for the reading of your results. You pay a monthly premium to your insurance for the ability to have that preventative exam covered at 100%.
So again, I ask are you really getting that preventative exam covered for free? Now doctor’s offices are getting more people coming in for their preventative exams, which is good. With more preventative exams being performed and insurance companies having to foot the bill for the exams, this can cause the healthcare costs to go up. Instead, I say keep some cost sharing to the policyholder. Rather than paying an additional $10-$15 per month in premium to the insurance companies to have that exam covered at 100%, I would rather have a flat $10-$15 fee for the preventative exam I receive. This fee would cover the full exam including any lab readings with no balance billing to the insured. At this point the Employer could have an option to refund the employee for participating in preventative care by showing a receipt, or by offering rewards/incentives for being preventative.
Moving onto the next part of the bill I feel needs to be revisited is the Pre-Existing Condition Limitation. . I agree that everyone has the right to have access to coverage. The problem here is one that I have personally dealt with many of times. There are individuals out there that are not responsible. These individuals have had the ability to get insurance on more than one occasion but have instead decided they would rather spend the money elsewhere rather than on Health Insurance premium. Now while being uninsured by choice over several years, some of these individuals have developed what we would call a pre-existing condition and need insurance but cannot find insurance to cover that without having to wait a 1-2 years on some plans for coverage on this condition. Now, with healthcare reform we are telling them its okay that they have not been responsible over the years that we as already insured people will absorb their risk and pay into the system in order to cover their condition either by taxes or increased premiums on our own health insurance plans.
Now, there is a flip side to this, there are insured’s that have had insurance, and have either lost their job, expired their COBRA coverage, or have been on an not “Creditable” insurance plan which causes them to have a pre-existing condition exclusion applied. I completely agree with HealthCare Reform covering these people and all of their conditions with no pre-existing condition limitations as they have been paying into the healthcare system. What people do not know is that some of the states already have plans for people who have this exact problem. For example, the State of Texas has what is called the Texas State Health Risk Pool. This covers anyone that cannot get coverage elsewhere. The problem with the plan is it is too expensive. Why doesn’t government contribute more to plans like this for the uninsurable in order to assist in the cost?
There are obviously parts I strongly disagree with, and I will keep this part short. One important part of the Act that is coming to light effective as of all open enrollments January 1, 2013 is the change in the amounts employees can contribute to their FSA (Flexible Spending Accounts). Now employees that participate in a FSA can only contribute $2,500 to their accounts regardless of whether they are individual or family. This is huge for families that were contributing up to $5,000. For those of you who are not aware of what a Flexible Spending Account is, this is a savings account that is set up through your employer on a “pre-tax” basis. You are allowed to use these funds over the year for any Medical, Dental, Vision, or Pharmaceutical expenses that arise. The idea of a FSA is typically to assist in the payment of medical deductibles; which typically run at a minimum of $1,500 per Individual and $3,000 per family. Now for a family taking advantage of this FSA account is not as attractive as it was and will not save participants as much on tax dollars.
In regards to Small Business, one positive note is that any small business (meaning employs less than 25) offering health benefits to their employees will receive a tax credit as much as 35%. This is to provide incentives for offering coverages to the employees. If a company has over 50 full time employees and they do not offer health insurance to their employees they could be penalized come 2014. What does this mean? It means that if you’re a Small Business owner and you are currently employing 45 Employees, you will now either ask those employees to work harder and longer in order to avoid having to hire new employees. Or as a business owner you will ask some of these employees to go “part-time” so that you can hire more “part-time” employees. You as a business owner will do whatever it takes to not break the 50 employee threshold in order to avoid penalties should your company not have a Group Health Plan in place.
While these smaller businesses (employing under 50) won’t be penalized for not offering insurance to the employees, should the employees not have insurance they could be penalized individually on their taxes come 2014. In order to help get people covered, I feel government should make insurance companies reduce their participation requirements. This will not only help out Small Business’ to get their tax credits, but will allow more people to become covered. Right now most insurance companies that sale to small businesses requires that you have 75% participation in a business in order to offer health insurance. Many times in a small business you can get close but if you don’t meet the 75% then the insurance company will not allow that company to have group insurance. This causes anywhere from 5-10 people or more per company to go uninsured, as typically group insurance is more affordable than individual insurance. By changing the 75% to 50% participation requirement, I do feel we could improve the odds of some employees getting coverage and assist our Small Businesses in getting the tax credits they need.
Onto Medicare, we all agree, FIX IT! Right now more doctors are refusing to take on Medicare patients than ever. With healthcare reform, the fees that doctors can charge per service have been more restricted than ever. With that being said, where will our Medicare Eligible people go for treatment? The only true benefit to Medicare patients is the prescription drug part. This is called Medicare Part D. Here is where prescription drugs are better covered for participants and Healthcare Reform is trying to close the gap (Donut Hole) in coverage for participants. This is excellent for their prescriptions, but what happens when their doctors won’t see them anymore due to the restricted fees they are allowed to charge for taking care of these participants?
This seems like a lot; however, it really doesn’t even scratch the surface on Healthcare Reform. I have touched on some of the key factors about Healthcare Reform. Should you want to know more about Healthcare Reform you should visit www.healthcare.gov. Everyone needs to be educated when it comes to what our government is proposing, especially with elections right around the corner.