Ripples of Healthcare Reform and the Effects it Will Have on Business Owners
By Kevin Williams, Managing Director, Claim Resolutions
Healthcare Reform has easily been one of the most heavily debated topics of the last few years and rightfully so. All Americans are affected by the healthcare delivery landscape we live with and we should take notice of the real effects of the changes unraveling around us. From the boardroom to the water cooler, costs, quality and availability of care are topics that demand attention from small business owners as well as employees and jobseekers.
Young and old, Americans are feeling the squeeze. Most are finding it difficult to come up with acceptable solutions given the severity of the forecast ahead, while more than 50-60 million Americans are walking the tightrope of living without coverage. Those fortunate enough to have health insurance are facing the prospect of an exponential rise in premiums with smaller and smaller networks of providers to choose from. With such widespread reach for ripples created by this healthcare debacle, everyone is looking for answers. How can we afford coverage? Can we go without coverage (and pay the $2400 per person fine mandated and enforced by the IRS!)? What can be done to curb costs and get this problem under control? Why are the looming changes so dramatic?
As a business executive working directly with healthcare providers, facilities, government agencies, and insurance carriers I can tell you that there is more confusion and misinformation than there is solid evidence of what is to come. Government officials, entities, and organizations readily admit that they are unsure of many details regarding the impending changes and in fact, they haven’t even read the bills they signed into law. Perhaps this lack of understanding stems from the recent revelation that congressional lawmakers and their staff members are exempt from current reform and resulting laws!
Healthcare providers already face a myriad of challenges and roadblocks to deal with that are completely unrelated to patient care. To be sure, these challenges add a cloudy future for delivery of care that I believe will provide a recipe for disaster. The insurance carriers are eerily silent, maybe even gratified by the multitude of changes and the looming threat of astronomical premiums. With providers already accepting less and less from insurance carriers, why the drastic increase in cost?
This article is not meant as a political rant, but there are significant issues every small business owner should be aware of in terms of healthcare and these issues will impact their business moving forward. Listed below are the five greatest challenges I see associated with this looming healthcare reform debacle:
- Benefit Costs – As a small business owner, I sympathize with those making decisions about major medical health insurance benefits. While individuals seeking coverage are surely considering quality of care along with cost, I can assure you that ethical business owners are just as concerned about their employees’ healthcare as they are. Moreover, small business owners face the challenge of balancing quality of care with the long-term costs those decisions have over the life of an entire organization. Within the last year, our organization has taken a closer look at our company benefits package. Despite what some may expect, we decided to take a more expensive and comprehensive plan to ensure that our employees’ health is taken care of. Much to my surprise, our premiums for a “Cadillac” plan are nearly half of those projected for the dawn of “Obamacare.” Recent government estimates put the cost of a “Bronze Level” Family Plan at $20,000 per year under new model. How could that “Bronze” plan be more than twice the cost of my current “Cadillac” plan? Either I have the world’s greatest benefits broker, or something isn’t right with this “Obamacare.” Don’t believe the hype!
- Hiring Policies: How do small business owners account for the mysterious and scary prospect of future benefit costs with respect to hiring new team members? Many employers around the country both large and small have already cut back full-time staff members to part-time, just to avoid the cost of providing healthcare benefits. Although some may feel these are cold-hearted business owners, many Americans are facing this reality.
- Effects on Business Growth: The rising costs and time spent ensuring compliance with new healthcare reform will likely have a negative effect on business growth nationwide, especially in the small business arena. Most small to mid-sized companies face a multitude of challenges and obstacles on an everyday basis; add drastically rising benefit costs and most small business budgets will implode on impact. Many small business owners and executives may not have the experience or fortitude to overcome these seemingly insurmountable obstacles. Success in this current environment takes a business leader with a wealth of experience as well as a truly unrelenting will to succeed.
- High Risk Pools: We have already begun to see the failure and disillusion of many of the “High-Risk Pools” throughout the country. Designed to guarantee coverage for those with serious and or long-term healthcare needs, this particular idea for reform was doomed from the start. Under previous longstanding doctrine, the costs associated with treating high-risk individuals would balance out with the other members of the group insurance plan that do not require costly or frequent care. While this may not seem like a perfect solution, it has been the name of the game for insurance carriers for decades, and it seems to be a game the insurance companies play well. After all, if we put all the “High-Risk” patients in one pool together who could possibly pay for that? Insurance carriers have made a very hefty profit on our current system for decades. If we remove all the high cost individuals, then it sounds to me like profits in the health care sector will be soaring while someone (surely taxpayers) will be left flipping the bill to cover the most expensive portion of the market.
- Wall Street: Although many refer to the equity and bond markets for insight or guidance on issues as large as Healthcare Reform, we may not need to look at the market as a whole just specifically at the insurance sector. If this sweeping reform legislation is such a great idea for the American people, then it can’t be a great deal for the insurance companies, right? After all, these insurance companies are not interested in our health nor are they interested in a doctor’s ability to make a decent living. Insurance companies answer only to Wall St. shareholders, balance sheets, income statements, and earnings forecasts. Since the introduction, debate, passage, and now looming implementation of sweeping Healthcare Reform Wall Street has seen health insurance carriers strengthen their market share and improve their earnings quarter after quarter. This is starting to look like the best thing that ever happened to insurance companies, which can’t possibly be a good thing for everyday Americans!
I hate to be the bearer of bad news, but this looming Healthcare reform package was not constructed by doctors, healthcare providers, or hospital administrators. It was drafted and signed into law by health insurance company lobbyists and irresponsible congressional lawmakers that are completely exempt from the effects they’ve mandated upon the rest of us. The best advice I can give small business owners is to read every bit of fine print in your benefits descriptions, enlist the services of an experienced benefits administration firm, and get to know your insurance carrier. The decisions we make and the laws we allow to be enacted now will generate effects that will ripple through our lives as well as the lives of our employees, our children, and our grandchildren. Choose wisely!