HHS official discusses health care law’s impact at University of ToledoWritten by Erik Gable | | email@example.com
The impact of the new federal health care law on small businesses was the subject of a March 1 meeting with a top official from the U.S. Department of Health and Human Services.
Kenneth Munson, Region V director for HHS, spoke to a group of about 20 people on the University of Toledo’s Scott Park campus about the Patient Protection and Affordable Care Act, which was signed into law by President Barack Obama in March 2010 and has been dubbed “Obamacare” by its opponents. Region V includes Ohio, Illinois, Indiana, Michigan, Minnesota and Wisconsin.
Munson said cost is a key factor in preventing small businesses from offering health insurance to their employees, with 86 percent of the small businesses that don’t provide it saying they can’t afford the price. At the same time, he said, 72 percent of businesses that do offer coverage say paying for it is a struggle.
Some provisions already in effect
Munson said some of the health care law’s provisions have already gone into effect, including a ban on insurance companies declining to cover children’s pre-existing conditions and a prohibition against rescission, which refers to an insurance company canceling a member’s policy, often because of a problem with the information that member provided when they initially took out the policy.
Munson said one woman was dropped by her insurance company after being diagnosed with breast cancer because she hadn’t disclosed that she had once sought counseling for stress.
The rescission issue became a point of debate at the presentation.
“Weren’t the majority of these rescissions for things related to fraud?” asked John McAvoy, state coordinator for The Ohio Project, which organized last year’s Issue 3, a rejection of the health care bill’s mandate for individuals to purchase health insurance.
Munson said fraud is still against the law. In an interview with Toledo Free Press after the forum, he said a consumer who is dropped because of alleged fraud would likely appeal to state regulators, or possibly to the court system, if they believed their policy was canceled illegally.
Business owners weigh in
One business owner in the audience said the health care bill has allowed her to become insured for the first time in eight years. Cathy Allen of Marblehead, who owns a consulting business called Creative Option C, said she has systemic lupus that’s under control, but that prevented her from being able to buy a policy.
Allen said that changed when former Gov. Ted Strickland’s administration took advantage of a pool of federal money that was created to let states create high-risk pools before the new rules creating state-level health insurance exchanges go into effect.
“Because of the creation of Ohio’s high-risk pool, I’ve been able to purchase insurance,” she said.
The individual mandate is a concern for Tom Elder, owner of Seagate Roofing in Toledo. Elder said he offers health insurance and pays more than half of the premiums, but some — mainly his younger employees — choose not to take the insurance. Once the individual mandate goes into effect, he said, even those employees who don’t feel they need health insurance will be forced to purchase it.
Munson said those employees could buy insurance through the new health care exchange, but Elder said that’s unlikely — since he pays most of the premium for his employees who do opt for health insurance, he said, those who are newly required to buy a policy are much more likely to go through him than the exchange.
“Why would they go there when they can go to me and I’ll pay 70 percent?” he said.
Munson said later that although businesses that offer insurance may see more employees enrolling in their plans because of the individual mandate, there are other measures intended to reduce the overall cost. He said premium reductions should result from having a larger pool of people and from the bargaining power of a central exchange; in addition, he said, tax credits will be available for businesses that offer insurance.
“There are issues around your overall costs going up because more workers are coming in,” acknowledged Kathleen Gmeiner of Universal Health Care Action Network Ohio. But also, she said, “there are some tools to get your costs under control and keep them predictable.”
The Milliman report
A report commissioned by the state from Milliman Inc. and released in the fall projected steep premium increases for some consumers. Gmeiner acknowledged that report, but said the more dramatic increases result in part from Ohio currently having a large number of rate bands for determining premiums. The sharpest increases will be seen by a small number of people with the lowest rates, primarily healthy young men, she said.
Gmeiner said the law will result in people in that group paying more, but in more security as well.
The Milliman report projected that, before applying the tax credit intended to partially subsidize premiums, the average individual premium would increase by between 55 percent and 85 percent on top of regularly expected medical inflation, due partly to the estimated health status of individual premium payers and partly to the plans expanding to cover more services. The report also projected that small-group employer-sponsored premiums would increase by between 5 percent and 10 percent on top of inflation and that large-group employer-sponsored premiums would increase by between 3 percent and 5 percent on top of inflation.
The report estimated that after the changes, individual plans will cost between 8 percent and 12 percent more than small-group plans.
When the report was released, Lt. Gov. Mary Taylor said it showed that “Obamacare will result in bigger government, unsustainable costs and, ultimately, less consumer choice.” Supporters accused the administration of misrepresenting the report by cherry-picking data. The 159-page Milliman report can be downloaded at www.ohioexchange.ohio.gov/Documents/MillimanReport.pdf.