Las Vegas Sun

September 21, 2014

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HEALTH CARE:

Small businesses have their own issues with Affordable Care Act rollout in 2014

Americans now know that President Barack Obama erred when he told the nation that people can keep their health plans if they like them.

In Nevada, about 25,000 people in the individual health insurance market received cancellation notices, leading to an apology from the president and a proposed fix.

But this isn’t over.

The same principle that led to people receiving cancellation notices also applies to businesses. Workers will face a lot of changes to the health care market in late 2014 as business owners seek to comply with business-related provisions of the health care law that start Jan. 1, 2015.

The timing means workers and business owners will face disruptions in the health insurance market right as Republicans and Democrats are competing to win votes in the Nov. 4, 2014 election.

“It’ll be what you’re hearing now about the individual (health insurance) plans times 10,” said one health insurance broker with large-business clients in Las Vegas.

That’s because the individual insurance market is small. Many more people get insurance through small-group or large employer health plans.

Many of these plans already provide better coverage than individual health plans, but they’ll still have to comply with the law come 2015.

So small businesses are already starting to do the math; should they continue providing insurance, or is it cheaper to dump employees onto Nevada’s health insurance exchange, where employees could be eligible for subsidies to buy their own insurance?

Some businesses may get a better deal — more coverage for less money — and some may end up paying more for insurance because of how the health care law changes the way insurers calculate the premiums they charge.

All the uncertainty has led many small businesses to wait and see how the law plays out in 2014.

Technically, small businesses have to comply with the law by Jan. 1, 2014, but many have opted for an “early renewal” option that allows a one-year extension for companies to keep their health insurance if they like it.

“It’s about rate preservation,” said Chris Campbell, director of the health and benefits division of Craigin & Pike, a Las Vegas insurance agency.

The insurance and benefits plan offered by the Las Vegas Metro Chamber of Commerce offered this option to its 2,700 small-business members so they could lock in coverage and current rates.

“We are simply offering a renewal of the current plan,” said Bill Wright, president of Chamber Insurance & Benefits. “We heard our membership saying they want to keep their current plan and their current physicians.”

But the Chamber will have to change its plan next year because the organization will need to fully comply with the health care law.

Businesses with more than 50 employees will also have to consider providing insurance at this time or paying a penalty for not doing so.

Many business health plans provide more coverage than individual plans, so they’ll likely be more compliant with the new law.

But they still could face price increases.

“An insurance company can’t just add coverage for free,” Campbell said. “They’ve got to adjust their rates to account for it.”

That’s why individuals with cancelled plans have sometimes seen their rates go up, because the new policies they’re offered have mandated coverage for things like maternity care.

“Maybe you don’t want to have kids or you’re done having children, so you don’t want a policy that covers maternity,” Campbell said. “Now they don’t have the option to not buy that type of policy so it automatically drives up their rates.”

Democrats who voted for Obama’s law have said all along that these changes in the market will help people get better insurance.

The Patient Protection and Affordable Care Act requires that health insurance plans cover “essential health benefits” that many insurers didn’t previously cover. The law also mandates coverage for people with pre-existing conditions, removes annual and lifetime limits for what insurance companies spend on customers, and directs insurance companies to spend at least 80 percent of the money they charge to customers on actual medical care, not profit or administrative overhead.

All plans offered in Nevada need to offer these essential health benefits.

So Democrats can say that transitioning to these new policies provides insurance products that are better, more comprehensive policies than the old, cancelled policies.

Of course, consumers may say they don’t care. They may have liked their old, less comprehensive policies.

But hundreds of thousands of Nevadans who have no insurance now will have a good chance to get it because of the health care law.

About 22 percent of Nevadans don’t have health insurance. That’s the second-highest rate in the nation. Nevada is also the worst in the nation for the percentage of its children who are uninsured.

The Nevada Department of Health and Human Services estimates that more than 265,000 Nevadans will get insurance through the state’s health insurance exchange or through the state’s expanded Medicaid system next year.

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