A different perspective
Restaurant owners are popularly supposed to hate the Patient Protection and Affordable Care Act, right?
Last week, I heard from one who doesn't.
His name is Eric Blinderman. He co-founded a couple of restaurants, and he's part of the Small Business Network Council.
He's also from New York, which matters for two reasons: First, that I heard him speak because I was there for a health care reform conference presented by the Society of American Business Editors and Writers and The Commonwealth Fund. This is the first of several blogs you'll be reading as a result of that experience.
Second, and more importantly, that New York's health insurance market is much more regulated than ours. Many of the actuarial changes that PPACA will bring in 2014 are already in effect there and have been for a while.
Here's an overview of what Blinderman said.
Frustrated: Blinderman has provided health insurance for his managers for years, but receiving renewal increases of 20 to 70 percent for years in succession forced him to cut coverage — and even then, he ended up paying 10 to 20 percent more. He wanted to offer insurance to his other full-time employees, but it was so expensive that no one signed up.
Baffled: In 2012, for the first time, he received a renewal notice with an increase in the 1 to 2 percent range. "My broker told me it was a result of New York and Affordable Care Act regulations," he said.
Jubilant: "From where I sit it's the best of both worlds," Blinderman said of the ACA. He doesn't expect to cut employees or employee hours, and he does expect to be able to provide a plan for all full-time employees.
So, is Blinderman's experience analogous to that of business owners here? Not exactly.
Because New York's regulations are already stricter, 2014 will bring employers there mostly higher small-business health care tax credits and access to exchanges — er, that is, marketplaces (federal officials recently pulled a terminology switch on these). Whatever pain or joy the actuarial changes bring, they won't feel much of it, because they've already had it.
Pennsylvania, however, will get both sides of the equation.
I should also note that the equation excludes tax changes, which are important and arguable and not fully known yet.
But what of the employer mandate? In New York, as here, misunderstanding of this concept flourishes. The requirement to provide health insurance or pay a penalty in 2014 applies only to employers with more than 50 full-time-equivalent employees. Employers that big constitute only about 4 percent of businesses, both in New York and nationwide, so for 96 percent of you, it's a moot point.
Related note: If you do have more than 50 full-time equivalent employees, splitting your business affairs into smaller chunks may not be the equivalent of a "get out of health care reform free" ticket. This blog has a good explanation.
Also, a 2011 study sponsored by The International Franchise Association concluded that the PPACA "will have negative effects on the franchising industry's ability to grow and create much-needed jobs for the U.S. economy."
One key argument was that the law creates a competitive disadvantage for franchisees who own multiple locations — which, if they count as separate businesses, would indeed indicate that the employer mandate might affect more than 4 percent of business owners.
National health care spending held steady in 2011 even as personal health care expenditures accelerated, according to a report from the Office of the Actuary at the Centers for Medicare and Medicaid Services.
In words that I thought would never flow beneath my fingers, I think the abstract says it better than I can.
"In 2011 US health care spending grew 3.9 percent to reach $2.7 trillion, marking the third consecutive year of relatively slow growth. Growth in national health spending closely tracked growth in nominal gross domestic product (GDP) in 2010 and 2011, and health spending as a share of GDP remained stable from 2009 through 2011, at 17.9 percent.
"Even as growth in spending at the national level has remained stable, personal health care spending growth accelerated in 2011 (from 3.7 percent to 4.1 percent), in part because of faster growth in spending for prescription drugs and physician and clinical services. There were also divergent trends in spending growth in 2011 depending on the payment source: Medicaid spending growth slowed, while growth in Medicare, private health insurance, and out-of-pocket spending accelerated.
"Overall, there was relatively slow growth in incomes, jobs and GDP in 2011, which raises questions about whether US health care spending will rebound over the next few years as it typically has after past economic downturns."
This article has some additional insights.
The contract for Service Employees International Union Healthcare Pennsylvania nursing home members, which covers 7,000 people in 80 facilities across the state, is set to expire this year.
Accordingly, on Jan. 15, "approximately 150 negotiating committee members traveled to Harrisburg to meet with industry representatives from Golden Living Center, Genesis, Extendicare, Reliant and Guardian nursing home chains as well as independent nursing homes."
I can't even visualize negotiations involving that many people.