From the governor on down, Pennsylvanians have been complaining about lack of detail when it comes to implementing the Patient Protection and Affordable Care Act. Now hard numbers are emerging on the cost side, and they aren’t pretty.
Employers braced for increases are shocked when they learn how high those may be and why, according to insurance brokers in the midstate. When these normally reserved actuarial types use terms
like “scary” and “tsunami,” everyone should sit up and take notice.
Even apart from the still-numerous unanswered questions about how PPACA will work and allowing for differences among companies, the bottom-line impact for both employers and employees will be significant. Next year alone, premiums may rise 30 percent or more. Businesses’ internal administrative costs also are likely to rise because of heightened compliance requirements.
The health insurance landscape isn’t just changing, it’s being bulldozed. No longer will insurers be able to use medical underwriting — the use of a person’s health data to determine coverage — or differentiation, except in limited categories, to set rates. At the same time, coverage must be expanded to include wellness and preventive care.
PPACA also includes 20 new or increased taxes, many of which are expected to be passed on directly — yet the law caps how much employees can be expected to pay as their share of the premium.
It gets even more complicated when you factor in the federal mandate that coverage must meet minimum benchmarks for adequacy.
The simple answer for employers, it has been argued, will be to just calculate the penalty for not providing health insurance, drop coverage and let employees find their own in the “marketplaces” that have yet to be established.
But we know that answer is unacceptable for many companies in the midstate, which practice broad corporate responsibility, value their employees and understand that it takes more than a paycheck to keep workers satisfied and productive.
Others may find themselves offering lesser coverage or tiered coverage based on hours worked, raising employee contributions or some combination of these.
Enrollment time for 2014 is only months away, and the sticker shock is going to be universal. It is imperative, therefore, that employers get up to speed as quickly as possible on the options available to them — and share that knowledge within their companies. A recent Kaiser Family Foundation study found that public awareness of PPACA’s implications has actually dropped over the past three years!
Knowledge is power for everyone involved. In this case, consider it the early warning system for the approaching tsunami that is PPACA.