WSJ: ‘Small Firms Hit by Big Changes in Health Coverage’ | ‘Some Kicked Off Group Plans & Struggling With Higher Premiums
Bill Smith, Editor's Notice: Most of my contacts at the Capitol are now on leave or with their elected official while Congress is on their district work sessions. Thus, the "Today in Washington, D.C" reports will be limited over the coming weeks until the branches of Congress are back in session.
Today in Washington, D.C. - Aug. 7, 2014
President Obama's approval ratings continual to plummet. Even his former ardent supporters a grumbling, mumbling, or ducking questions. Droves of Democrat candidates may appreciate the campaign money he raises but don't want to be with him in their home districts. William Warren's humor mixed with reality sums up the situation in the editorial cartoon included with today's update.
The House and Senate are not in session today. However, the Senate will reconvene for a pro-forma session on Friday at 9:15 AM. Thus keeping President Obama from appointing unconfirmed nominees for positions. The Senate will return for legislative business on Monday, September 8th. But additional pro-forma meetings and the return of support staff are expected before that date.
Reflecting on the news reports, it appears that the President Obama and his advisers are more detached than ever form the majority of American citizens, Then there are the ongoing failures by the various agencies. As we quoted yesterday, veteran Massachusetts Democrat said he was “appalled” at the “bad” roll out of Obamacare last October. He said in an interview with the Huffington Post , "I don’t understand how the president could have sat there and not been checking on that on a weekly basis. But, frankly, he should never have said as much as he did, that if you like your current health care plan, you can keep it. That wasn't true. And you shouldn't lie to people. And they just lied to people."
Aside from the almost daily news about Democrats’ broken promises on Obamacare, the 2700 page law and the sprawling regulations it spawned continue to result in all sorts of unintended negative consequences.
The Wall Street Journal reports today, “Smaller employers aren't required under the Affordable Care Act to offer coverage for their full-time workers—as larger firms must by 2016 or face penalties, for instance. But many owners of small ventures and startup entrepreneurs are nonetheless facing big changes to how they obtain their own health coverage, as well as to the benefits they're able to offer employees. ‘It's a myth that smaller firms aren't being hit’ by the health law, albeit in less obvious ways, says James Schutzer, president of the New York State Association of Health Underwriters, referring to employers with fewer than 50 workers. Several thousand of the nation's smallest business owners—sole proprietors and the self-employed—were kicked off their small-business plans by carriers earlier this year. That is because new guidelines define ‘employers’ as having at least two full-time employees, not including a spouse, in order to be eligible for group plans. In all, more than 78% of the estimated 28 million small businesses in the U.S. have no employees, according to the Small Business Administration. These business owners must now seek coverage as individuals, or face fines. . . . [S]ome of the business owners who were excluded from group plans as a result of the health law are struggling with higher premiums, less robust benefits or uncertainty within a new, unfamiliar network, says Scott Lyon, vice president of the Small Business Association of Michigan. In December, the association's own group plan, which currently has 4,000 small-business members and covers about 40,000 workers and their families, was forced to kick out 700 sole proprietors, he says.”
The Journal writes about the experience of Raymond Pezonella, who owns an engineering firm in Reno, Nevada. “Raymond Pezonella currently receives health coverage for himself and roughly 30 workers at his Reno, Nevada, engineering firm through a local builders' association. He pays about $9,000 a month into the plan, known as an Association Health Plan, or AHP. . . . By pooling together with other employers, Mr. Pezonella says he was able to save nearly 14% on annual insurance costs for his company, which designs foundations for homes, schools and other buildings. ‘You want to do right by your team, not just to keep them around, but to keep them healthy, too,’ he says, adding that his firm has been on the group plan for more than two decades. But earlier this year, his policy, administered by the Builders' Association of Northern Nevada, was defined as a ‘small group’ plan under federal guidelines, because none of its members have more than 50 employees and each pay separate rates, says Mike Dillon, the builders' group executive director. As a result, the plan faces a number of new requirements, such as a ban on charging higher premiums to riskier members. Most large group plans are exempt from that requirement. Mr. Dillon estimates the change will boost the cost of members' monthly premiums by 40% on average next year. ‘Most members with low rates now are going to see them go up, and a few with higher rates may see them go down,’ he says. Tony Novak, an independent small-business benefits consultant in Newport, N.J., says many small-group plans, like Mr. Pezonella's, are becoming less attractive under the health law. ‘Most small firms would be better off financially by canceling group coverage and giving taxable bonuses to let employees purchase coverage on the individual market,’ he says. Mr. Pezonella might now opt out of the plan. He's worried the company's workers won't be able to find comparable plans on their own. He's also worried about losing access to his longtime network of doctors and physicians by switching plans.”
Meanwhile, another WSJ story reports, “Almost 90% of the nation's 30 million uninsured won't pay a penalty under the Affordable Care Act in 2016 because of a growing batch of exemptions to the health-coverage requirement. The architects of the health law wanted most Americans to carry insurance or pay a penalty. But an analysis by the Congressional Budget Office and the Joint Committee on Taxation said most of the uninsured will qualify for one or more exemptions. . . . The Obama administration has provided 14 ways people can avoid the fine based on hardships, including suffering domestic violence, experiencing substantial property damage from a fire or flood, and having a canceled insurance plan. Those come on top of exemptions carved out under the 2010 law for groups including illegal immigrants, members of Native American tribes and certain religious sects. Factoring in the new exemptions, the congressional report in June lowered the number of people it expects to pay the fine in 2016 to four million, from its previous projection of six million. Also bringing down the total: At least 21 states have opted not to expand the Medicaid insurance program for lower earners under the health law, and those residents may be exempt from the penalty.”
The problem here is that “[t]he exemptions are worrying insurers,” The Journalwrites. “The penalties were intended as a cudgel to increase the number of people signing up, thereby maximizing the pool of insured. Insurers are concerned that the exemptions could make it easier for younger, healthier people to forgo coverage, leaving the pools overly filled with old people or those with health problems. That, in turn, could cause premiums to rise. Patrick Getzen, vice president and chief actuary at Blue Cross and Blue Shield of North Carolina, said he saw more ‘older and sicker people’ enrolled in 2014 than projected. He attributed some of that to the weakened mandate. ‘With a stronger penalty and less broad exemptions, that would be better for the risk pool.’ The Obama administration argued before the Supreme Court in 2012 that the individual mandate was an essential component of the law's insurance-market changes, and the court narrowly upheld it on the grounds it is a tax. Now, Republicans who oppose the law say the administration has undermined that requirement with the exemptions and should waive the mandate entirely.”
Tags: Congress, recess, working sessions, Obamacare problems, changes in health coverage, kicked out of Group Plans, struggling, presidential poll, editorial cartoon, William Warren To share or post to your site, click on "Post Link". Please mention / link to the ARRA News Service. and "Like" Facebook Page - Thanks!
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| Editorial Cartoon By William Warren |
Today in Washington, D.C. - Aug. 7, 2014President Obama's approval ratings continual to plummet. Even his former ardent supporters a grumbling, mumbling, or ducking questions. Droves of Democrat candidates may appreciate the campaign money he raises but don't want to be with him in their home districts. William Warren's humor mixed with reality sums up the situation in the editorial cartoon included with today's update.
The House and Senate are not in session today. However, the Senate will reconvene for a pro-forma session on Friday at 9:15 AM. Thus keeping President Obama from appointing unconfirmed nominees for positions. The Senate will return for legislative business on Monday, September 8th. But additional pro-forma meetings and the return of support staff are expected before that date.
Reflecting on the news reports, it appears that the President Obama and his advisers are more detached than ever form the majority of American citizens, Then there are the ongoing failures by the various agencies. As we quoted yesterday, veteran Massachusetts Democrat said he was “appalled” at the “bad” roll out of Obamacare last October. He said in an interview with the Huffington Post , "I don’t understand how the president could have sat there and not been checking on that on a weekly basis. But, frankly, he should never have said as much as he did, that if you like your current health care plan, you can keep it. That wasn't true. And you shouldn't lie to people. And they just lied to people."
Aside from the almost daily news about Democrats’ broken promises on Obamacare, the 2700 page law and the sprawling regulations it spawned continue to result in all sorts of unintended negative consequences.
The Wall Street Journal reports today, “Smaller employers aren't required under the Affordable Care Act to offer coverage for their full-time workers—as larger firms must by 2016 or face penalties, for instance. But many owners of small ventures and startup entrepreneurs are nonetheless facing big changes to how they obtain their own health coverage, as well as to the benefits they're able to offer employees. ‘It's a myth that smaller firms aren't being hit’ by the health law, albeit in less obvious ways, says James Schutzer, president of the New York State Association of Health Underwriters, referring to employers with fewer than 50 workers. Several thousand of the nation's smallest business owners—sole proprietors and the self-employed—were kicked off their small-business plans by carriers earlier this year. That is because new guidelines define ‘employers’ as having at least two full-time employees, not including a spouse, in order to be eligible for group plans. In all, more than 78% of the estimated 28 million small businesses in the U.S. have no employees, according to the Small Business Administration. These business owners must now seek coverage as individuals, or face fines. . . . [S]ome of the business owners who were excluded from group plans as a result of the health law are struggling with higher premiums, less robust benefits or uncertainty within a new, unfamiliar network, says Scott Lyon, vice president of the Small Business Association of Michigan. In December, the association's own group plan, which currently has 4,000 small-business members and covers about 40,000 workers and their families, was forced to kick out 700 sole proprietors, he says.”
The Journal writes about the experience of Raymond Pezonella, who owns an engineering firm in Reno, Nevada. “Raymond Pezonella currently receives health coverage for himself and roughly 30 workers at his Reno, Nevada, engineering firm through a local builders' association. He pays about $9,000 a month into the plan, known as an Association Health Plan, or AHP. . . . By pooling together with other employers, Mr. Pezonella says he was able to save nearly 14% on annual insurance costs for his company, which designs foundations for homes, schools and other buildings. ‘You want to do right by your team, not just to keep them around, but to keep them healthy, too,’ he says, adding that his firm has been on the group plan for more than two decades. But earlier this year, his policy, administered by the Builders' Association of Northern Nevada, was defined as a ‘small group’ plan under federal guidelines, because none of its members have more than 50 employees and each pay separate rates, says Mike Dillon, the builders' group executive director. As a result, the plan faces a number of new requirements, such as a ban on charging higher premiums to riskier members. Most large group plans are exempt from that requirement. Mr. Dillon estimates the change will boost the cost of members' monthly premiums by 40% on average next year. ‘Most members with low rates now are going to see them go up, and a few with higher rates may see them go down,’ he says. Tony Novak, an independent small-business benefits consultant in Newport, N.J., says many small-group plans, like Mr. Pezonella's, are becoming less attractive under the health law. ‘Most small firms would be better off financially by canceling group coverage and giving taxable bonuses to let employees purchase coverage on the individual market,’ he says. Mr. Pezonella might now opt out of the plan. He's worried the company's workers won't be able to find comparable plans on their own. He's also worried about losing access to his longtime network of doctors and physicians by switching plans.”
Meanwhile, another WSJ story reports, “Almost 90% of the nation's 30 million uninsured won't pay a penalty under the Affordable Care Act in 2016 because of a growing batch of exemptions to the health-coverage requirement. The architects of the health law wanted most Americans to carry insurance or pay a penalty. But an analysis by the Congressional Budget Office and the Joint Committee on Taxation said most of the uninsured will qualify for one or more exemptions. . . . The Obama administration has provided 14 ways people can avoid the fine based on hardships, including suffering domestic violence, experiencing substantial property damage from a fire or flood, and having a canceled insurance plan. Those come on top of exemptions carved out under the 2010 law for groups including illegal immigrants, members of Native American tribes and certain religious sects. Factoring in the new exemptions, the congressional report in June lowered the number of people it expects to pay the fine in 2016 to four million, from its previous projection of six million. Also bringing down the total: At least 21 states have opted not to expand the Medicaid insurance program for lower earners under the health law, and those residents may be exempt from the penalty.”
The problem here is that “[t]he exemptions are worrying insurers,” The Journalwrites. “The penalties were intended as a cudgel to increase the number of people signing up, thereby maximizing the pool of insured. Insurers are concerned that the exemptions could make it easier for younger, healthier people to forgo coverage, leaving the pools overly filled with old people or those with health problems. That, in turn, could cause premiums to rise. Patrick Getzen, vice president and chief actuary at Blue Cross and Blue Shield of North Carolina, said he saw more ‘older and sicker people’ enrolled in 2014 than projected. He attributed some of that to the weakened mandate. ‘With a stronger penalty and less broad exemptions, that would be better for the risk pool.’ The Obama administration argued before the Supreme Court in 2012 that the individual mandate was an essential component of the law's insurance-market changes, and the court narrowly upheld it on the grounds it is a tax. Now, Republicans who oppose the law say the administration has undermined that requirement with the exemptions and should waive the mandate entirely.”
Tags: Congress, recess, working sessions, Obamacare problems, changes in health coverage, kicked out of Group Plans, struggling, presidential poll, editorial cartoon, William Warren To share or post to your site, click on "Post Link". Please mention / link to the ARRA News Service. and "Like" Facebook Page - Thanks!
Posted by Bill Smith at 2:01 PM - Post Link
2 Comments:
When I was a teen, my parents owned a small family grocery store in Oregon. One day my dad came back from town very irritated about something. Suddenly he burst out, "The gov is setting it up so that if you want to be in business you will either have to be very very big or very very small!" I did not question, just listened and wondered what happened to make him say that. But after all these years - and being a small business owner myself - I can see that he was right. The gov hates competition...
Anita, I really appreciate comments that share personal comments. And your father's feelings and comment were right on the mark. Thank you!
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