Local employers gathered Friday afternoon to listen to Jesse Patton — healthcare guru who spent months in Washington, D.C., working on the Affordable Care Act (ACA).
Patton spoke for two hours to local business owners and staff at IowaWORKS building in Creston, and explained healthcare in this country is changing dramatically right now and will continue to month by month over the next six years as legislators continue to add and delete regulations to the law.
But, while there is uncertainty, Patton said one thing is for sure — ACA will be costly. The Congressional Budget Office (CBO) estimated the 10-year cost for Obamacare will be $1.32 million. However, Patton said over the past three years, as legislators added regulations, the cost has continued to rise. Patton estimated before it's all said and done the 10-year projection will be close to $2 trillion.
Essential benefits defined in the Affordable Care Act show every American must be covered for emergency services, hospitalization, maternity and newborn care, mental health and substance use services, among others.
"The CBO makes clear, average premiums would be 27 to 30 percent higher because the law demands greater insurance coverage," Patton said.
The CBO emphasizes it would have a greater impact on premiums in the non-group individual market than in the small-group market, and no measurable effect on premiums in the large-group market.
The administration released comprehensive proposed rules on the major employer-coverage requirements under ACA in December. Employers can rely on these rules until final rules are released.
On Oct. 1, exchanges/market places will begin open enrollment period. Then, by 2014, employers must generally be in compliance with coverage requirements. The individual mandate and premium tax credits begin in 2014 as does the expansion of Medicaid.
The individual mandate requires all American citizens and legal residents to purchase qualified health insurance coverage. In 2014, those without insurance will pay the greater of $95 or 1 percent of household income that exceeds personal exemption that year.
That rises to $325 or 2 percent of gross income, whichever is greater, in 2015, and then $695, or 2.5 percent of gross income in 2016.
Employees who smoke cigarettes could get hit hard in the pocketbook by ACA. An employee can be charged up to 50 percent higher premiums for an individual policy. As well, government tax credits that will be available to help pay premiums cannot be used to offset the cost of penalties for smokers.
"A 60-year-old smoker could wind up paying nearly $5,100 on top of normal premiums (under ACA)," Patton said.
Other info from Friday's seminar:
Name change: Patton said the "exchanges" to open later this year are now being called "market places" because there is no Spanish word for exchange.
Processed foods: Preventative care is a major component to the Affordable Care Act. Patton said the biggest problem right now is what consumers in the United States are purchasing. Patton said Americans only consume 7 percent of the fruits and vegetables in the world, but consume 90 percent of the world's processed foods.
Small or large group: Patton said the first thing an employer needs to determine is if they are a large group, small group or both. The definition of small employer and large employer varies by provision, so it's entirely possible to be a small employer and large employer at the same time.
Summary benefits: Under the new law, a uniform summary of benefits and coverage must be given to people who apply for or enroll for in individual or group health plan. A copy must be given to a participant or beneficiary within seven days of their request. A copy must be given to new hires, presumably, within seven days.
For non-compliance of the summary benefits and coverage rules, penalties are severe, carrying a $1,000 fine for each failure.