Experts: Health reform to produce winners, losers next year
Published: Wednesday, May 1, 2013 at 8:17 p.m.
Last Modified: Wednesday, May 1, 2013 at 8:17 p.m.
ALACHUA — The Affordable Care Act will produce both winners and losers when the individual mandate begins in 2014, a panel of insurance and accounting experts told a trade group Wednesday.
For individuals, the cost of health insurance premiums will go up or down based on their age, gender and health.
For employers, the cost of providing insurance or paying penalties for not providing it depends on how many people they employ and the quality of insurance they already provide.
The North Central Florida Chapter of the Construction Financial Management Association, made up of people involved in finance and accounting for construction companies, hosted "A Look Inside the Intricate Panorama of Obamacare" at the National Center for Construction Education building in Alachua on Wednesday.
For people who do not have access to health insurance through an employer plan, the law calls for a health insurance exchange to be available online starting Oct. 1 so they can shop for plans from different insurers and enroll by Jan. 1, 2014. Florida has decided not to implement an exchange, so state residents will have to use the federal exchange.
For people on employer plans, the provisions of the ACA kick in whenever their plans renew in 2014.
The panelists said the winners include people who can't currently get insurance because they have pre-existing health conditions and people eligible for subsidies through health exchanges because they make within 400 percent of the federal poverty level, currently $46,000 for an individual or $94,000 for a family of four.
The losers in the cost structure are younger, healthier men who will pay more to bring down the costs to young women and older adults, said Brad Bentley, senior vice president of AvMed Health Plans.
Many young and healthy people are expected to opt out of buying insurance and instead pay a $95 penalty next year, driving up the average cost for everyone else.
"The big unknown is how many will remain uninsured," Bentley said. "Our best estimate is about half because it will be cheaper to pay the penalty."
"That's one facet that makes absolutely no sense at all in relation to what the intent of the ACA was — to get more people participating," he said.
The penalty goes up each year, however, so at some point depending on what premiums cost, it will make sense for young people to buy insurance, said Lee Brockway, owner of D&B Insurance Services.
People at small companies with high-deductible, low-premium plans will see their premiums increase since the law will limit deductibles to $2,000, Bentley said.
Businesses with more than 50 full-time equivalent employees will be required to provide insurance with a minimum level of benefits and an affordable level of premium costs to employees or have to pay penalties.
For some large employers, it might make financial sense to redirect some low-wage workers to Medicaid and pay a $3,000 penalty per employee, said Jay Hutto, partner with James Moore Certified Public Accountants and Consultants.
Panelists said the formula for determining full-time equivalent employees is affecting worker hours. Full time is considered 30 hours per week, while part-time worker hours are added together to determine the number of full-time equivalents.
Hutto said some smaller companies are cutting hours to stay below the 50-employee threshold, and larger companies are cutting hours to reduce the penalties they will have to pay based on the number of uninsured full-time equivalent employees.
Companies also are cutting low-wage staff and using temporary workers instead, Brockway said, adding that moves creates another winner from the law — temp agencies.