Changes to Affect Businesses and Consumers Starting in 2014
The Patient Protection and Affordable Care Act (known as PPACA) has and will continue to impact many aspects of how health care is delivered in the United States. Health care providers, health insurance companies, business owners, the self-employed, the currently insured and the currently uninsured will look at how we access health care through a new lens – commonly referred to as “health care reform.”
While many of the PPACA mandates have already been implemented (e.g. broader access to preventive care; removal of annual policy limits; and elimination of pre-existing conditions for those under the age of 19), the majority of the health care reform impacts are “coming soon.”
“It’s like trying to fix the transmission while you’re driving the car,” is how Jason Alford, Director of Individual and Exchange Sales for Health First Health Plans, described the current challenge for health system providers in designing future plans to comply with the PPACA.
Timelines and Key Features
Beginning January 1, 2014, the PPACA mandates the following:
For individuals and groups of up to 100 employees, the PPACA creates a government-regulated health insurance marketplace known as insurance Exchanges. The intent of these Exchanges is to increase the accessibility and affordability of health insurance today in a society where an estimated 48 million people were uninsured in 2011.
Individuals will most likely have the option to purchase health insurance on the Federal Exchange, as the State of Florida has indicated at this point that it will not set up a state-based Exchange.
Here are some dynamics of the individual Exchange:
- Health insurance companies will no longer be able to deny coverage based upon health history. This environment is known as “guaranteed issue.”
- Subsidies that help pay for the individual insurance premium will be provided for those who meet certain household income criteria.
- Tax-based penalties will be introduced for individuals who fail to purchase health insurance.
“In Brevard County, there will be thousands of new consumers in the health care system receiving the subsidized coverage,” explained Harold Merritt, Manager of Product Development at Health First Health Plans. “While there may be some pent up demand for services initially, the strengths of an integrated system should help improve the overall health of the community in the long-run.”
Impact on Businesses
Small businesses will continue their ability to buy insurance directly from insurers or they may opt out to purchase coverage through the Small Business Health Options Program (commonly referred to as the SHOP Exchange). Here are some dynamics of the SHOP Exchange:
- Employees will be able to select coverage in the employer plan or purchase insurance in the Exchange and receive a tax credit.
- Employees may be eligible for a “free choice voucher” to use their employer’s health insurance contribution amount toward purchasing a plan on the Exchange.
- Qualified businesses may be eligible for a tax credit of up to 50 percent of the employer health insurance contribution.
Both SHOP and the Individual Exchange will be operated by federal funding rather than at a state level. Open enrollment for many of these programs will begin October 1, 2013. “While there are many unknowns at this time, our goal of partnering with local businesses to provide quality health care for their employees – in either the current competitive environment or the federal environment – will remain unchanged,” said Alford.
As 2014 approaches, the medical community, health insurers, businesses and consumers must educate themselves about the impacts of health care reform. With increased accessibility to health insurance through subsidies and mandates, the PPACA will introduce millions of new “consumers” into the health care system. Barring legislative or funding changes, January 1, 2014 represents a monumental marker of change in the timeline of health care in the United States.