What you need to know about the Affordable Care Act

You may already know that the US Supreme Court upheld a challenge to the Affordable Care Act (ACA), sometimes called Obamacare because the proposal originated from President Obama’s administration. The ACA comprises the Patient Protection and Affordable Care Act (PPACA) and the Health Care and Education Reconciliation Act of 2010.

But what does this new law mean to you? It depends on who you are. The law has different implications for different groups of people. In this and following posts, I will address what the ACA means to employers, seniors on Medicare, and healthcare consumers.

According to the national Association of Healthcare Underwriters, The primary goals of the ACA are to:
“(i) expand coverage to an estimated 32 million Americans without health insurance;
(ii) reform the delivery system to improve quality and drive efficiency; and
(iii) lower the overall costs of providing health care.”

Under this law, all Americans are to have some minimum level of health care coverage. Those who do not comply will pay a fine. This is sometimes referred to as the individual mandate.

Michigan will participate in the National Health Care Exchanges, which is designed to be a place where people who do not have affordable coverage through an employer can find a health plan option and comply with the law.

In addition to the so-called individual mandate, insurers cannot exclude people from coverage if they have pre-existing conditions, such as diabetes, asthma or even cancer. And dependent children can stay on their parents’ coverage through age 26.

Most of the provisions that take effect in 2012 and 2013 involve Medicare and hospital reporting. Most of the provisions that affect employers take effect in 2014. I will focus on those first and examine the Medicare changes in another post.

By 2014

• All employers with 50 or more full-time employees must provide certain minimum health care benefits or they will pay penalty fees.

• Changes to the employer and insurer reporting requirements will be implemented

If you do not currently offer health care coverage, and you employ 50 or more full-time workers, now is the time to find a health plan that fits your needs and budget. If you have less than 50 employees, you may want to consider offering a plan, or your employees will have to participate in the Health Care Exchanges if they do not have coverage through a spouse or parent.

Also, by 2018, the government will impose an excise tax on high-cost employer-sponsored coverage. It has not yet been determined what level constitutes high-cost. We will be sure to share that information with you once it becomes available.

We do not yet know if or how much these changes will affect the cost of employer-sponsored health plans. If you have questions about your plan, please contact us.

Michigan Drops Plan for Set Age for Health Insurance

Yesterday's Detroit News carried an interesting news article about a decision to forgo a plan to make public school employees wait until age 60 to collect retirement health insurance benefits. Governor Rick Snyder and Republican legislative leaders together decided to abandon such a plan:

Setting a specific age for retired school employees to get health care coverage has been one of the most controversial aspects of a massive legislative overhaul of the Michigan Public School Employees Retirement System. 

At public hearings held by a Senate committee last month, teachers in their late 40s and 50s said the requirement unfairly disrupted their retirement plans. 

"In the interest of fairness and in response to inquiries from public school employees who have expressed concerns about making plans for their retirement, we have decided to remove the 60-year age provision under this legislation and to eliminate retroactively imposing graded health care premiums on retirees," Senate Majority Leader Randy Richardville, R-Monroe, said in a statement. 

Snyder, Richardville and House Speaker Jase Bolger, R-Marshall, announced the changes late Friday. The governor and his fellow Republicans are trying to trim long-term costs to the retirement system to address a looming $45 billion unfunded liability for pensions and health care. 

"The school employee retirement system, as it exists today, is simply unsustainable," Snyder said in a statement. "We have to act and act soon." 

MPSERS provides full health insurance to retirees until age 65 when they are eligible for Medicare and their state insurance becomes secondary coverage. 

Lawmakers also are dropping a graded health insurance subsidy for all school, community college and university employees in the system. The bill called for employees to get 30 percent of retirement health insurance coverage after 10 years of service and an additional 3 percent for every additional year. 

The bill will keep in place a flat coverage of 80 percent of health insurance costs, requiring all retirees to cover the rest out of pocket, according to Richardville's office. 

Other legislation has been introduced to require about 220 retired state legislators and 50 current representatives and senators grandfathered into a closed retirement health insurance plan to increase their premiums from 10 percent to 20 percent. Teacher unions have decried the perceived inequity. 

"They made a good point in comparing any proposal to recently adopted state employee retirement reform," Bolger said in a statement.

Affordable Health Care Act and Michigan

Today's Detroit Free Press ran a story by Jase Bolger titled "The Affordable Care Act: What's at stake." In this editorial, Bolger (the Speaker of the Michigan House of Representatives) discusses health care reform in Michigan. The article begins:

The federal government is headed in a different, and much worse direction, than Michigan. With tough decisions and hard work over the past year Michigan’s state government has turned a $1.5 billion budget deficit into a more than $450 million surplus this year. We have deposited hundreds of millions of dollars into the state’s savings account. Further, we’ve reduced Michigan’s long-term debt by more than $5 billion, removing $2,400 in debt per child that was previously piled on every child in Michigan. We’ve done so by making state government more efficient and focusing on its core responsibilities. At the same time, Michigan’s unemployment rate has fallen from about 13% to 9% through the creation of 100,000 private sector jobs. We still have much work to do, but I believe Michigan’s best days are in front of us.

Unfortunately, President Obama is taking the country down a path that lacks financial accountability, choosing to bury future generations under unimaginable layers of debt. The most egregious example of this is what should be called the Un-Affordable Care Act.

Affordable health care is indeed a challenge for our families. There are things the government can do to help. It could adopt lawsuit reform to reduce the burden patients pay for, such as doctor’s liability insurance and the many unnecessary tests caused by defensive medicine, ensure policy coverage portability between jobs, and increase competition for lower cost insurance by allowing providers to sell insurance across state lines. Employers should be encouraged to offer health care benefits. Medical decisions should be made between patients and their doctors. Unfortunately, on most of these issues Washington went in the wrong direction. Even though there is a fine, the president’s program literally provides financial incentive for employers to drop their employees’ health coverage, forcing people to go through a government plan. The president places decisions about health care with government, specifically by having a government panel make decisions about coverage for our senior citizens in Medicare. And, the president’s plan increases rather than contains, costs.

You can read the rest of the article on the Free Press website.