Is There A Solution?
Stanley Feld M.D.,FACP
MACE
The health insurance exchanges look like they
are going to make healthcare more expensive because of 20,000 new
regulations. Employers are looking for
ways to avoid Obamacare and get out of the healthcare coverage business.
Employers
are realizing they can avoid certain penalties under Obamacare by offering very
limited plans that lack key benefits which satisfy the true definition of
healthcare insurance.
Benefits
advisers and insurance brokers are increasing their commissions by offering low
benefit plans that cover minimum benefits such as preventive services. The
healthcare plans provide just enough minimum benefit requirements to avoid Obamacare’s
penalty. If an employee wants real coverage he is on his own.
Obamacare’s
promise was that healthcare insurance coverage would broadly enrich at lower
affordable costs.
It is unclear how many employers will adopt the strategy this year.
There are dozens of brokers and benefit administrators discussing this strategy
with their clients. I bet many will adopt this strategy.
"There
had to be a way out" of the penalty for employers with low-wage workers,
said Todd Dorton, a consultant and broker for Gallagher Benefit Services Inc.,
a unit of Arthur J. Gallagher AJG -0.44% &
Co., who has enrolled several employers in the limited plans.”
Obamacare
requires employers with 50 or more workers to offer coverage to their workers
or pay a 2,000 per worker penalty.
The
employers and benefits experts initially thought the rules required robust
insurance with a long list of "essential" benefits.
Federal
officials confirm the mandates affect only plans “sponsored by insurers” that are sold to small businesses and
individuals.
Healthcare
insurance “sponsored by insurers”
that are sold to small businesses and individuals affect only about 30 million
of the more than 160 million people with private insurance.
Employers
provide these “insurer sponsored plans”
to 19 million out of the 30 million people. These plans are going to disappear.
Some benefits advisers feel they face
regulatory uncertainty. New regulation can cancel older regulations. These
advisors say they would adjust to new regulations as regulators clarify the
law.
According
to Obamacare, regulations written by the multiple new agencies, larger
employers with more than 50 workers only have to provide preventive services,
without a lifetime or annual dollar-value limit, in order to avoid the
across-the-workforce penalty.
Such policies would generally cost far
less to provide to employees than paying the penalty or providing more
comprehensive benefits.
Most low-benefit plans would cost
employers between $40 and $100 monthly per employee, according to benefit
firms' estimates.
These
plans essentially provide no insurance for healthcare problems if someone needs
insurance. The financial burden falls directly on the consumer.
Obama
administration officials confirmed in interviews that the low benefit plans
would be sufficient to avoid the across-the-workforce penalty.
Several
Obama administration officials expressed surprise that employers would consider
the low benefit approach.
"We
wouldn't have anticipated that there'd be demand for these types of band-aid
plans in 2014," said Robert Kocher, a former White House health adviser
who helped shepherd the law. "Our expectation was that employers would
offer high quality insurance."
Another trick benefit managers are offering
small employers in order for them to avoid higher costs of premiums due to
compliance with some of the provisions in Obamacare is early yearly renewal of
preexisting healthcare coverage. UnitedHealth, Aetna and Humana are offering
small companies this option. The savings is significant.
Self-insured
companies face fewer changes under Obamacare. Many small companies are now switching
to self-insurance. Large corporations have been self-insured for years.
I
have previously discussed the large trend to hire only part time employees to
avoid the penalty as well as the requirement to provide insurance.
Many
employers are trying to get out of providing healthcare insurance to employees.
Employers fear they will be penalized by the Obama administration at a later
time. The administration is constantly changing regulations. This has lead to
tremendous uncertainty.
Some
Obama administration regulators worry that some of these strategies will be
widely adopted. If this happens it could decrease the effectiveness of
Obamacare’s online health-insurance exchanges.
Only
older and sicker workers, who need real healthcare insurance coverage will opt
out of low benefit employer coverage and join the health insurance exchanges.
The
premium cost for good coverage in Obamacare’s health insurance exchanges is
high already. The adverse selection will drive these costs even higher.
The
whole idea behind Obamacare’s health insurance exchanges is to force healthy
people to pay for the resources used by sick people. (“Redistribution of
wealth”)
The
Obama administration refuses to believe options to avoid Obamacare will be a
widespread trend.
How
come? Didn’t congress exempt itself from Obamacare?
"Any
activities that take place on the margins by a small number of employers would
not have a significant impact on the small group or the individual
market," said Mike Hash, director of the department's Office of Health
Reform.”
These
new plans are a substitute for the Obamacare exempt Minimed plans. Companies
that provided Minimed plans received over 13,000 waivers for Obamacare until
January 2014. Companies such as McDonald and Burger King provided Minimed Plans
to employees.
All
of these twists and turns make Obamacare look like it is unworkable. It is!
President
Obama’s goal is to create more chaos and dysfunction in the healthcare system.
Only
then can the government really step in and say let me help you.
Then
the government can provide a single party payer system and complete the journey
to socialized medicine.
Based
on past experience in many other countries, the result will be skyrocketing costs
and increased deficits.
Americans
have a lot to look forward to. The only was out is to repeal Obamacare and
replace it with a consumer driven healthcare system.
The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone
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