Healthcare 2014: ‘Clunky, Inconsistent, Unstable’
In a little over seven months, most of the requirements of the Federal Affordable Care Act go into effect. What should businesses expect from the new healthcare universe?
“The reality is that the rollout on January 1 will be clunky, it will be inconsistent, and it will take at least three years for things to stabilize,” said Kevin Counihan, CEO of Access Health CT, the state’s planned health insurance exchange.
“It’s an imperfect law, this will be an imperfect implementation, and the hope is that we all come together to make things better.”
Counihan was speaking at Healthcare 2014: What the Affordable Care Act Means for Business conference in Southington. He is responsible for launching and managing the state’s ACA-mandated, taxpayer-subsidized exchange.
He told the audience of 400 business leaders that healthcare exchanges, public or private, were a “mega trend” and that the healthcare market was going to change markedly in the next few years.
“The healthcare market is going to see change,” he said. “But there is that 800-pound gorilla in the room, and that’s the question of how do we control costs?”
Phil Vogel, senior vice president with CBIA Service Corporation, which operates Health Connections, the state’s leading private healthcare exchange, said businesses, particularly small businesses, can expect major upheaval because of the ACA.
“Federal healthcare changes mean higher costs for individuals and for most groups,” Vogel told the audience at the Aqua Turf Club. “Many employers should expect major sticker shock when the law’s requirements go into effect on January 1.”
New rules for determing rates, penalties for failing to provide or assume coverage, differing federal and state guidelines, new taxes and fees, and new benefit provisions are among the numerous factors driving up costs and causing employers headaches.
“What employers tell us they need is more certainty, less upheaval, and the ability to provide employees choices when it comes to healthcare,” Vogel said. “Healthcare is a very personal decision and people want more and more choices.
“What we are doing in this marketplace is giving employers the ability to provide employees choices at the best possible prices, with the best possible services, and the best possible outcomes.”
Vogel noted that private exchanges were best suited for serving the business market, while the state exchanges should serve the uninsured and subsidized markets, and Counihan supported that.
“We are not interested in pursuing those who have healthcare coverage,” Counihan said. “We are going to focus on those who don’t have coverage and our success will be measured on how we perform in that area.”
Small business executive Kim Sirois Pita [pictured above with Business Insurance’s Jerry Geisel and Ray Gorman from Community Mental Health Affiliates] said it was critical that employers have the ability to offer their employees options with health insurance.
“We chose the Health Connections private exchange because of the choice of multiple plans and the ability to manage costs,” she said. “I also like that I can pick up the phone and get my questions answered.”
The ACA’s ramifications for non-profit groups “are not pretty,” said Ray Gorman, president and CEO of New Britain-based Community Mental Health Affiliates.
“We don’t see the ACA providing additional healthcare coverage for those who need it,” he said.
Paul Grady, a partner with management consultants The Mercer Group, told the conference one of the problems with the country’s healthcare system was consumer isolation.
“People are too insulated from the real costs of providing healthcare and that prevents them from being good, well-informed consumers,” he said.
“This employer movement toward private exchanges, where there are a range of plan options and greater choices for employees, is basically where things are going.”
Grady also cautioned that Connecticut faced additional cost pressures as state lawmakers continued to consider new healthcare mandates, which under the ACA now must be funded by state taxpayer dollars.
The ACA means significant changes for employers and the health benefits offered to employees. It brings compliance deadlines, reporting and noticing requirements, financial consequences, new fees and taxes, and play-or-pay penalties.
Jackson Lewis partner Joseph Lazzarotti told business leaders they must address the ACA’s administrative burdens now, warning it would be “too late on January 1.”
Lazzarotti was one of a number of panelists urging businesses to start preparing employees for coming changes in benefits and requirements by communicating with them ahead of time.
“Navigating the federal healthcare reform landscape can be a really daunting task,” said Vogel. “Finding help will be very important.”
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