The Patient Protection and Affordable Care Act — better known as Obamacare — is in effect, and confusion over the 2,400-page law would be laughable if the impact on how it affects access, delivery, and costs of healthcare services weren’t so serious.
One point that pundits, physicians, and policymakers agree on is that it’s unclear what Obamacare means for employers, employees, self-employed individuals, and the currently uninsured. Meanwhile, about 25 million Americans will enroll by 2021, according to a Congressional Budget Office projection.
The upshot is that insurers can no longer deny coverage or charge a higher premium because of pre-existing conditions, and the maximum lifetime benefit amount ceases to exist.
But prepare for rate shock, says Aetna CEO Mark Bertolini. In some markets, increases in premiums could “go as high as 100 percent,” he told Forbes magazine. “We’ve done all that math. We’ve shared it with all the regulators. We’ve shared it with all the people in Washington that need to see it. And I think it’s a big concern.”
Indeed, says Larry Goodwin, founder of Health Insurance Network in Palm Desert, “It’s true, ‘rate shock’ is what we are hearing from all the insurers and the industry insiders.”
Fifty-eight percent of senior financial executives cited healthcare costs as their chief concern, for the third consecutive year, in the Bank of America Merrill Lynch 2013 CFO Outlook survey.
The nation’s health insurance companies are developing coverage policies while trying to interpret the new law. The policies will be sold on public, state-run exchanges, or marketplaces. California insurers will market them as “bronze,” “silver,” and “platinum” policies. How these exchanges will operate has even long-time industry professionals scratching their heads.
“My crystal ball is so foggy, I can’t answer questions from clients asking what they should be doing about their health insurance when the Affordable Care Act takes effect,” concedes Bill Robinson, owner of Palm Canyon Insurance Agency for 31 years. Robinson, the legislative chairman for the Desert Cities Association for Health Underwriters, has spent years in Sacramento working on health insurance industry issues. “I have never been in a situation where impending changes in the law prevent me from guiding my clients,” he says.
Employers with 50 or more employees must offer health insurance to all full-time (working 30 hours weekly) workers, who can expect to pay a larger portion of their health insurance premiums.
Self-employed people purchasing costly individual healthcare coverage can expect premiums to rise even more when they purchase coverage on state-run exchanges. Policy options will become clearer, as they are expected roll out in October.
Meanwhile, small business appears pleased. “Contrary to what most of the media has been saying, The Affordable Care Act offers many financial benefits for businesses with fewer than 50 employees — which comprise 96 percent of small businesses,” says Ned Roache, chairman of the Coachella Valley chapter of SCORE, a volunteer organization that offers free business counseling and helps arrange U.S. Small Business Administration loans.
Whatever the new frontier of healthcare looks like, prepare for it to differ from what it looks like now.