Many questions remain about impact of Obamacare
The one certain thing about the impact of the Affordable Care Act is that it will vary from business to business and individual to individual.
That's the assessment of Nicole Fallon, a lead consultant on health care for CliftonLarsonAllen, a nationwide accounting firm that has an office in Hudson.
"From an industry perspective, you can't generalize what the approach is or what the impacts will be," Fallon said in a recent phone interview. "There's just so much variability that there's no way to easily say this is what an employer of this size or in this industry should do, or what the impact that it will have."
Fallon was the presenter at a Nov. 13 program on the Affordable Care Act at the Hudson Golf Club. CliftonAllenLarson offered the program as an appreciation event for its clients. About 30 individuals and representatives of local businesses attended.
The Affordable Care Act, commonly referred to as Obamacare, is the far-reaching health reform law passed in 2010 and scheduled to go into full effect in 2014. The main goal of the act is to reduce the number of Americans without health insurance.
It does that by offering subsidies and tax credits to employers and individuals, and mandating that individuals purchase insurance or pay a penalty.
Will employers drop coverage?
One often-heard prediction from opponents of the act is that employers will drop health insurance coverage for their employees and let them purchase it from the new insurance exchanges.
CliftonAllenLarson has a health insurance penalty calculator that it uses to determine the financial impact to a business if it were to drop coverage. The act requires only businesses with 50 or more employees to offer coverage or pay a penalty.
Fallon said the typical response she gets from company representatives after running the calculator is: "Well, geez, why wouldn't I drop coverage? I could save so much money."
Her reply is: "Why don't you drop coverage today? You could save so much money, and you won't have the penalties."
The fact is that employers offer benefits for a variety of reasons -- including recruiting and retaining quality employees -- that won't go away after the Affordable Care Act goes into full effect a year from now, Fallon said.
Also, the decision-makers in companies have incomes above 400 percent of the poverty rate, the level below which individuals will receive subsidies to make health insurance affordable through the exchanges.
"Where do the CEO and the HR director fall? They have to buy their own insurance, too. Going forward, they will have to pick up the full cost (if their company drops coverage)," Fallon said.
She said that of the 100 companies or so around the country that she has consulted with, a couple of them have said they are going to drop health insurance coverage.
"Most of them are trying to figure out how they continue to offer coverage," she said.
"Most employers don't really know how this all works. They're just reacting to what they've heard," Fallon said. "And most of what has been out there has been political rhetoric on both sides."
Something known, she said, is that the law requires companies to make insurance coverage affordable for their employees, but not their spouses and children. The result is that some companies may redirect money to subsidize individual plans more, and take money away from spouse and family plans.
Fallon said she doesn't see how premium prices can come down, but she's hedging her bets.
"There are too many moving parts for anybody to know for sure," she said.
The theory behind the individual mandate is that the larger risk pools will lower premiums, because healthier, younger people will be forced to participate.
But that act also contains a new yearly fee of up to $63 per person to cushion the expense for insurance companies of covering people with pre-existing conditions.
"I've heard both sides," Fallon said regarding predictions about what will happen when the Affordable Care Act is fully implemented.
"The Republicans say things that are true. The Democrats say things that are true. And they both say things that are misleading. Truthfully, I think we need to see how this plays out. There's too many moving parts for anybody to know for sure."
Businesses interested in CliftonLarsonAllen's help in translating the Affordable Care Act may contact Fallon at firstname.lastname@example.org.