By Joy Hampton
The Norman Transcript
NORMAN — Like it or not, the Affordable Care Act is here to stay, attorney Karen Rieger told Norman Chamber of Commerce members this past week. The Supreme Court upheld it, President Barack Obama was re-elected, and businesses and individuals need to be ready.
“There’s nothing that would appear to stop the Affordable Care Act at this point,” said Rieger, whose practice includes mostly health care clients. “We have to forge ahead.”
The chamber’s luncheon panel on the “Patient Protection and Affordable Care Act — Understanding the Changes and Business Implications” was hosted Thursday at the Chamber office. Panelists included Rieger, with Crowe & Dunlevy, Kelley Grace, CPA with Eide Bailly LLP, Tim McFall of INSURICA — Agar-Ford-Jarmon & Muldrow Insurance, and Norman Regional Health System President and CEO David Whitaker.
Gov. Mary Fallin declined federal money and refused to set up a state-sponsored insurance exchange, but Rieger said, “We’ll have a federal exchange in Oklahoma.”
The Oklahoma attorney general filed a lawsuit challenging the obligation of Oklahoma employers to pay penalties for insurance purchased by employees through the federal exchange available in Oklahoma. That lawsuit challenges the availability of tax credits for individuals and employers.
Since there is no state exchange, there will be no tax credits. Therefore, employers should be exempt for the penalties, the AG argues. The feds say Oklahoma has no case.
“The government has filed a motion to dismiss,” Rieger said. That case is pending, so businesses will need to “stay tuned” for what comes next.
Grace said there are 46 million to 54 million uninsured people representing 16 percent of the population, which is what got the state to the point where lawmakers intervened. The highest rate of uninsured is in the 19-to-29 age group. Additionally, 25 million more are underinsured.
A new law allowing dependent children to stay on a parent’s plan until age 27 may help alleviate the problem with the uninsured in that age group, Grace said.
Coverage must be offered to full-time employees and their dependents, but under the proposed rule, spouses are no longer considered dependents, Rieger said.
Anyone who works 30 hours a week is considered a full-time employee.
Total health care spending last year was about $2.5 trillion, Grace said. She said statistics indicate that growth of health insurance premiums and workers’ contributions to premiums has far exceeded growth in workers’ earnings and inflation, adding to the health care crisis.
Some components of the new law may make residents better health care consumers. McFall said the flex spending account limit at $2,500 will make employees using those accounts more mindful of how those dollars are spent.
Not all news is bad, McFall said. Health plan design changes for this year establish new women’s preventative services with no deductible or copay. But some of that coverage has caused controversy. Hobby Lobby, for example, has protested requirements to pay for coverage that includes the morning-after pill.
In 2014 the individual insurance mandate begins, and people will be required to have health insurance or be fined. The first year, fines will be $95, but those fines will go up each year, increasing to $695, McFall said.
The panelists agreed that one of the most confusing areas for businesses will be figuring out the number of FTE — full-time equivalent — positions that will be counted. While only employees working 30 hours or more are considered full-time for the purpose of insurance benefits, how many FTEs an employer has will determine which category the business falls into, as far as requirements. Companies employing more than 50 FTEs will be subject to large employer requirements and penalties.
For very large or very small companies, this is not an issue. But mid-sized companies will apply a formula using the number of full-time, part-time and seasonal employees to determine if their FTE count hits 50, knocking them into the large employer category.
Whitaker said while the other panelists spoke about the “Affordable Care” aspect of the act, he would talk about the “Patient Protection” aspect. He said the new health care law is still evolving, and about 45 percent of the regulations and 50 percent of the law has not been proposed yet.
“I think early on, the changes you will see will be based on the coverage you have,” he said. “I encourage everyone to have actual conversations with your employer and your insurance provider.”
Medicare will continue the shift toward outpatient treatment. That trend has been in effect for four years, Whitaker said.
Accountable care organizations will be assigned for total outcomes of care. People seeking providers outside of the ACO will have fewer benefits, he said.
Medicaid will expand with 17,000 newly eligible persons in Cleveland County alone.
“Who is going to take care of them?” Whitaker said.
Many doctors don’t take Medicare and Medicaid patients, but for the hospital, this Medicaid expansion will be a plus.
“We’re taking care of them right now,” he said.
The hospital serves everyone, regardless of ability to pay. Now there will be reimbursment for more of those people, adding $9 million to $11 million in revenue.
The uninsured should be looking ahead, but often they are people who have the fewest resources to research their options, Whitaker said.
“They need to be preparing,” he said. “They need to be researching.”
Another trend is many doctors are discontinuing their hospital coverage, allowing the hospital group to treat patients once they have been admitted. Whitaker said it’s important for residents to find out if family doctors will still treat them in the hospital setting.
Changes will be required at Norman Regional Health System for it to survive the next five years, he said. Those changes include improved efficiency and outcomes, reduction of operating costs and improved patient experience.
“You have to do better with less now,” Whitaker said.
There will be a shift in how Medicare reimburses hospitals, but that shift will phase in over time, so for a few years, the hospital will have to meet two different sets of goals to collect full payment. The new model is a movement toward “value-based purchasing.”
“The old ways of doing things are not going to work anymore,” Whitaker said. “It’s going to be an interesting 10 years.”
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