Healthcare Debate: ‘Settle This Thing,’ Say Execs
"Let me just thank the Supreme Court for not making a ruling today and messing up my presentation," began Kay D. Mooney, as she started her talk Monday outlining various parts of the health reform law now before the nine Justices.
Mooney, a health executive with insurance firm Aetna , and a guest speaker at the Society for Human Resource Management Conference in Atlanta, Ga., stood before a packed room of business owners and HR executives and attempted to decipher the reform bill's affect on businesses.
"So it's complicated, for sure," said Mooney at the end of her speech. "But it seems that whatever the Court decides, uncertainty about healthcare is an understatement."
For business owners and HR execs, the waiting continues to be the hardest part. While the possibility of a decision loomed early Monday, it now seems that the justices won't announce a decision until Thursday. Speculation about what the Court will do abounds. Will it strike down all of the health reform law or just parts of it? How much is this all going to cost? When do certain rules go into effect?
What many analysts and experts say is that no matter what happens, some sort of closure is needed on the healthcare debate.
"We just want the issue of healthcare to be settled," says Bill Harris, CEO of Personal Capital,a personal wealth management firm based in Redwood City, Calif.
"As a firm, we don't have to worry so much about healthcare costs, but every year we see premiums going up," explains Harris who said he would like the health care bill to stand.
"I just don't want to spend a big part of my day thinking about all this," adds Harris, who has around 50 employees and pays between 6 percent to 15 percent of his business costs on healthcare.
Many businesses and HR execs are stuck scratching their heads over the 2,140-page bill that has several moving parts and penalties.
For instance, there's this section of the bill as explained by the Center on Budget and for Policy Priorities: "A business has to pay a penalty of $2,000 per full-time employee when the firm does not offer healthcare coverage AND as long as the employer has at least one worker who receives subsidized coverage in a local health insurance exchange. This goes into effect in 2014 but the penalty will be adjusted after 2014 if insurance premium costs go up."
That kind of complicated language and timeline is making many businesses wish they could just walk away from health care, says Robert Evangelista, VP Midwest Regional for First National Administrators, a a firm that helps insurance brokers find customers and clients.
"A lot of companies would get out of offering healthcare coverage if they could," Evangelista contends. "They can't contain the cost of health care like they can with other parts of their business. But they're stuck doing it."
Some firms are out of health care already as fewer workers are getting their health insurance through their employers. Some 44.6 percent of workers got coverage in 2011, according to a Gallup poll, but that was down from 45.8 percent in 2010 and 49.2 percent in 2010. Reasons cited for the decline include rising health-care costs, businesses gone bust, coverage by a spouse and higher unemployment.
But some companies look to health coverage as a bonus in the talent wars, says Luis Rodriguez, HR manager at TheLadders, an online job matching service.
"We are a rarity maybe, but we don't mind paying health-care costs," explains Rodriguez, who is against any kind of forced employer coverage. "It's a good recruiting tool for us and others to get the best workers. But many firms can't afford it."
Parts of the Affordable Health Care Act are already in place: coverage has expanded—those up to age 26 of age can be on their parent's policy—and insurance companies can't deny coverage for pre-existing conditions. Many other parts, including the business mandate to offer coverage, roll in over the next two years.
As for the overall cost, the Congressional Budget Office says the act has a net cost of just under $1.1 trillion over the 2012–2021 period—about $50 billion less than the CBO's March 2011 estimate.
Even with that revised figure, healthcare costs will continue to soar. In 2014, healthcare spending growth is expected to accelerate to 7.4 percent—up from 4 percent in 2013 as the major coverage expansions from the Affordable Care Act begin, according to the Centers for Medicare and Medicaid.
And businesses are feeling the pain. The average cost of health care coverage for an employee is expected to reach more than $10,000 by the end of this year—up from $9,792 in 2011, and $9,111 in 2010. And even with the AHCA fully in place, not everyone gets covered. The CBO says some 20 million people could lose their employer-provided coverage through the reform bill, adding to the number of uninsured Americans that is now at nearly 50 million.
"We need big changes in healthcare products for businesses," says Evangelista. "There's really no innovation in the marketplace to help companies cut costs and cover everyone. We need transparency on prices and coverage between health-care providers and businesses for real reform."
For this current version of reform, what's clear, HR execs say, is that businesses are confused by the rules, regulations and costs. But if anyone is looking to the Supreme Court to end the battle over healthcare, they will be sorely disappointed, says Gary Kushner, president and CEO of Kushner & Company, an HR strategy and benefits firm.
"It the Court rules against 'Obamacare', getting healthcare under control will have to go back to Congress or the President, whoever he is," contends Kushner, who supports the AHCA. "If they rule for it or parts of it, the political and legal battles continue. This debate will go on for the next decade either way and health-care costs will keep rising."