A panel of experts assembled by the McPherson Chamber of Commerce Wednesday morning discussed how implementation of the Affordable Care Act will affect local residents.
Despite the U.S. Supreme Court’s ruling that upheld most of the provisions of the Affordable Care Act, some states are still trying to get the law struck down.
Jeff Houston, city attorney and attorney for Wise & Reber, L.C., said don’t plan on any of those attempts being successful.
However, some aspects of the Act are still being considered by the court.
The U.S. Supreme Court has not agreed to accept a case that will decide if some religious-minded businesses and organizations will be able opt out of a requirement to offer contraception.
The 10th Circuit Court, which Kansas is a part, has ruled it will not grant injunctions on the contraception issue. In Kansas, organizations will be required to follow the interim rule. The rule will exempt churches or organizations that only serve members of their religion.
Businesses like Hobby Lobby or Chick-fil-A that have expressed opposition to the contraception requirement on religious grounds but serve the general public will be required to offer contraception.
The 7th Circuit Court has ruled it will grant injunctions on the issue. It will allow organizations to opt out of contraception requirement on religious grounds.
Effects on local business
For local employers, Houston said the Affordable Care Act may affect local businesses’ decisions on expansion. The Affordable Care Act requires businesses with 50 or more employees to pay for insurance or pay a fine.
Houston said those businesses who are close to that threshold will be carefully considering if they want to expand.
Greg McCullough, vice president of human resources for Farmers Alliance Mutual Insurance, spoke in regards of businesses with 50 or more employees.
He said some of the company’s employees already have lost a tax advantage because the Act put a cap of $2,500 on flexible spending accounts.
These accounts allow employees to set aside money tax free to be used for medical or child-care expenses.
“This is just a revenue generator for the federal government,” McCullough said.
Health care exchanges
McCullough expressed further frustration because businesses have not been given any information on health-care exchanges that will be required by the Act.
If a company does not offer health insurance, individuals and families will be able to go to a state or federal exchange to purchase insurance. If the companies opt not to provide insurance, they will have to pay a fine that will go toward support of the exchanges.
Kansas has not set up a health care exchange system, and the state’s uninsured likely will have to opt for federal exchange policies, members of the panel said.
McCullough noted paying the $2,000 per employee per year fine would be significantly cheaper for his company than the company’s current contribution to its employees health plan. However, he said the company does not wish to do this because of its concern for its employees and a need to stay competitive when recruiting employees.
McCullough said he had concerns about the bureaucracy the health exchanges would create.
“Anything that goes to the federal level, when you look at the struggles they have had with other programs, you have to ask what can a person get going to a federal exchange,” McCullough said.
He also expressed concerns about consumers being able to navigate the difficult decisions they may face in choosing a policy through the exchange system.
“Do individuals have the knowledge to make choices about something that is that important,” he said.
Health care costs
McCullough said he was unsure how the act will reduce premiums.
The average cost for a family plan is about $15,000 per year, and the cost for an individual plan is about $8,000 per year.
An Aon-Hewitt survey estimates premiums will increase 6.3 percent in 2013 compared to average increase of 4.9 percent in 2012, McCullough said.
Janet McMurray, Group Consultant for Blue Cross Blue Shield, said new regulations will not allow premiums to be determined by risk or preexisting conditions.
This means there will be three rate tiers — one rate for those younger than 20, one rate for those 20 to 64 and one rate for those 65 and older.
This change will mean premiums for older consumers will go down, and rates for younger consumers will go up.
McMurray, who has a 25-year-old son, said she thought she could convince her son to buy health insurance for $100 per month. If the rate goes up to $300 to $400 per month, she said many young people likely will opt to pay the penalty instead of buying insurance.
McMurray also said the Affordable Care Act does not require employers to cover spouses and requires insurance coverage for employees working 30 hours or more instead of 40.
Spreading the cost around
Dr. Dan Lichty of Midland Family Practice said premiums will go down as more people become paying parties in the system.
Currently the uninsured use expensive emergency room services. About a third of these debts are not paid and end up being recouped in charges to insured patients.
Lichty said a visit to the emergency room could cost $3,000 compared to a visit to a primary care physician, which would cost about $75.
Lichty, who worked in New Zealand, which has universal coverage, praised the Affordable Care Act.
He said universal coverage in New Zealand allowed small mom-and-pop businesses to thrive.
“Just relax. It will be OK. It is all going to work out,” he said.