There are few things as divisive and misunderstood than healthcare reform in the United States. That’s why local insurance firm, the Healy Group, hosted a conference Thursday to give its clients some clarity on upcoming and indefinite changes.
Several points of discussion were reiteration of well-known facets of the Patient Protection and Affordable Care Act, while others surprised even insurance veterans themselves.
“As much as we've done with all of the training for the Affordable Care Act which goes into effect 2014, we still have a lot to learn because a lot of it's still being rolled out…it’s a moving target,” said Pat Griffey of the Healy Group.
President of Blue Water Benefits Consulting, Ruthann Laswick flew into town to deliver addresses to two sessions of Healy Group clients. She candidly answered questions and spoke frankly of the realities and complexities of healthcare reform.
Originally, healthcare reform called for large employers to pay a penalty for each employee if they didn’t offer coverage. That provision has since been delayed until Jan. 1, 2015.
“So the net effect is that premiums will suffer,” Laswick explained, “from an individual employers' point of view it gives them more time to get their house in order. From a big picture point of view there are repercussions attached to it.” Those repercussions, according to Laswick, include prolonging the budget shortfall to cover current Medicaid and federal health expenses as well as delaying the inevitable decision to be made by employers.
Another major concern is that many Americans have the popular misconception that the Affordable Care Act means insurance will be free.
“There's nothing free about this. The only time it appears to be free is if you have a very low income and you're eligible for the full tax credit, or you're eligible for the Medicaid expansion,” Laswick said.
The only individuals eligible for “free” insurance are those who qualify for a complete tax credit, namely those with income between 400 percent of the national poverty level and the poverty line itself. Laswick said that the public option for insurance will require people to apply online and submit tax and work-related documentation.
The online submission to the IRS has some concerned that the government will have more information at their fingertips. But Laswick explains that in order to verify the income and determine eligibility tax information makes the most sense.
Starting Oct. 1, 2013 employers must issue notices of the public option to their employees—regardless of whether or not they currently offer plans. Risk manager for the Healy Group, Anthony Nyers said the details of the exchange haven’t been worked out just yet.
“What this is going to look like from the individual perspective is really not baked at all. Indiana is using the federal exchange model, but the federal exchange model is not out there so the carriers are working with the feds to get the essential benefits in there, and they're putting thoughts and ideas out there” Nyers added. But even with the collaboration no official plan for the exchange has been given the stamp of approval.
As a marketplace, the exchange is designed to be available to a certain population. The confusion comes into play when individuals waive purchasing a plan that is “affordable” by federal standards i.e. costs 9.5 percent of their annual income and therefore become ineligible for tax credits.
Laswick explained, “So the unfortunate part is if someone takes a tax credit that they're not eligible for they may have to pay part or all of it back depending on where they are in the federal poverty level.” Affordability standards provide an easy line in the sand with clear demarcations.
Despite some confusion and constant learning, as a member of the insurance field Nyers feels that there is enough information out there for employers to make big decisions. The information that is not out there Nyers said is on the more individual side: what the exchanges are going to look like and how expensive they’re going to be.