The Putnam Examiner

Putnam’s Heath Care Task Force Sheds Light on Affordable Care Act

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Healthcare professionals knowledgeable about the Affordable Care Act held a recent forum for small business owners the intricacies of the law.
Healthcare professionals knowledgeable about the Affordable Care Act held a recent forum for small business owners the intricacies of the law.

The paradigm in healthcare is shifting. With the Affordable Care Act (ACA) passed and its new rules being phased in through 2015, confusion and controversy has run rampant. Physicians, hospitals, patients, large and small businesses and the self-employed have been scrambling to understand the 1,025-page document and what it means for them.

In an effort to educate the public, the Putnam County Blue Ribbon Task Force on Health Care sponsored a forum held at Putnam Hospital Center in Carmel that drew more than 80 local small business owners.

The ACA will see a complete turnaround in the way hospitals operate, according to Michael Weber, president and CEO of Health Quest.

“We have always provided care for you when you got sick, and after the stay, you go home and move on. That is all going to change very soon,” explained Weber. “Instead of taking care of you after you get sick, our incentive, our goal and our focus going forward will be to make sure you never get sick in the first place.”

Financial incentives will be provided to hospitals that have a high quality of care and great outcomes while negative financial incentives will be applied to those who don’t. Hospitals must now stay solvent while shifting their goals to keeping beds empty rather than full while focus is shifted to preventative care and patient education.

Hospitals will no longer be the hub in healthcare, but will become one of the spokes in the wheel, connecting with other providers and working within the entire system to provide the highest level of care for the patient, Weber said. The healthcare network will now become the center.

Last October, the Readmission Penalty portion of the act went into effect. If a patient is readmitted to a hospital within 30 days of being discharged, the hospital will not be paid.

“We’re essentially providing you with a 30-day warranty,” said Weber. “The insurance company is not going to pay for it and you’re not going to pay for it, so we eat it. When I put my Joe Public hat on, that’s a good thing, but it certainly challenges us as a provider.”

With current readmission rates at 15 percent, hospitals will have to work harder during the transition to stay solvent. Population health will become the new buzz phrase as hospitals try to identify the needs and illnesses of the community and the people who are at risk to make sure that they are being treated so that they don’t end up in the hospital.

According to a 2012 study by the Kaiser Family Foundation, 25 percent of small business owners are uninsured and 28 percent of self-employed people are not covered while small firms pay 18 percent more for health insurance than large businesses. Small business health costs are projected to more than double by 2018, to $2.4 trillion without healthcare reform.

Seventy percent of businesses surveyed who don’t provide health benefits say that it is because it’s unaffordable. Of those who do offer health benefits, 72 percent say that they are struggling to do so.

Since being signed in March 2010, provisions of the ACA have been rolled out in stages and will completed by 2015.

Before the U.S. Supreme Court upheld the new law last June, many doubted whether the law would ever go into effect, but are now trying to figure out how it affects them.

“The new federal law is an attempt to build on the existing system,” said Ben GeyerhACAn, manager of the Small Business Majority’s New York office.

Insurance companies can no longer deny coverage to children with pre-existing conditions. (This provision goes into effect in 2014 for adults.) The practice of rescinding coverage for ill patients because of a technical error on an application is prohibited. Lifetime limits on essential services are banned and annual dollar limits will be regulated. Appeal processes have been instituted and consumer assistance programs established.

Adult children under age 26 (age 29 in New York) can stay on their parents’ plan. “Part of what the act is trying to do is to get healthy people onto the health insurance system,” Geyerhahn explained. “Bringing kids into the system is important because they’re healthy and they don’t go to the doctor. They still get hurt, and they still break their arms, but that’s who we need to bring into the system.”

There is increased access to care through community health centers and preventative care service is available with no cost sharing. Geyerhahn said a hospital admission that would cost thousands of dollars prevented by a $20 flu shot is an example of how preventative care will help reduce costs.

Small businesses are eligible for tax credits, retroactive to 2010. A business with fewer than 25 full-time employees, where the employees’ average annual wages are less than $50,000 a year and the employer pays at least half of the premium cost, are eligible for a tax credit of up to 35 percent of the premium expenses, based on a sliding scale. The owner’s salary does not go into the average wage calculation, nor is his premium covered in the expense.

To the many small business owners who don’t think they would qualify for the tax credit, Geyerhahn said, “You would be surprised who qualifies for this. It’s worth doing the rough math.  Accountants have not been too diligent about this.”

Individuals, and the self-employed who have been uninsured for six months and have been denied coverage for a pre-existing condition or have a physician’s letter, are eligible for low-cost coverage through $5 billion in funding over five years.

There were $9 million in grants provided in 2011 to study small employer wellness programs to reduce the risk of chronic disease among employees, promote sustainable and replicable workplace health activities and promote peer-to-peer healthy business mentoring.

As of September 2011, the new law mandated that insurance companies be required to publicly disclose and justify rate increases of at least 10 percent. In New York, insurers must obtain approval of all rate increases from the state.

By next January, Healthcare Insurance Marketplaces, also referred to as exchanges, will be established. Individuals and small businesses will be able to buy affordable and qualified health benefits plans from this competitive market. In order to be eligible for increased tax incentives of up to 50 percent, small businesses will have to purchase plans from the exchanges.

Businesses with more than 50 employees are mandated to offer affordable insurance, (costing less than 9.5 percent of the employee’s gross family income) to each employee, or pay a penalty of $2,000 per uncovered employee.

Under the bill, individuals without coverage will also be penalized.  Penalties will start at $95 in 2014 and rise to 2.5 percent of taxable income by 2016.

By Barbara O’ Hare

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