CURRENT EVENTS: Can you keep pace with changing health care laws?

john_englishHere’s an understatement: the Affordable Care Act (Obamacare) is confusing. And because it has been so deeply politicized, it’s difficult to decide whether the “news” that we’re hearing is slanted one way or the other. Whether you love it or hate it, the bottom line is that it very much looks like it’s here to stay.

After a very rocky start, the website for signing up is making progress, but still has a long way to go. New revelations also indicate that a small number of people will not be able to hold onto their current insurance plans and that some folks with expensive policies will actually end up paying more.

One big recent concern was that, because the website (healthcare.gov) is so awful, it might be susceptible to hacking and identity theft. According to CNNMoney.com, in a report published on Nov. 5, that actually isn’t an issue. That’s because one doesn’t give a whole lot of information to the government site (just addresses, birth dates and phone numbers): the personal data is actually given to individual insurance companies who have secure networks.

That points out another misconception: the Affordable Care Act doesn’t turn the government into an insurance company or a healthcare provider. What the law does do is attempt to regulate how insurance companies treat their customers, to level the playing field. From one-man shops to woodshops employing hundreds of workers, that involvement by Uncle Sam is going to impact how the woodworking industry buys health insurance.

Under Obamacare, the latest word is that “almost” everyone who already has health insurance will be able to stay with the plan they have, if they so choose. The president initially said that everybody would be able to retain their plan, but now the White House has changed that message because there are apparently a number of policies that don’t meet the new federal guidelines.

One thing that hasn’t changed is that parents can still keep dependent children on their plans until the kids are 26, which should get most of them through college.

The biggest impact of the law will be on that huge portion of middle-class America that doesn’t currently have health insurance (an estimated 30 million) because they can’t afford it. And of those who do have a policy, a large percentage currently have to settle for poor coverage.

My wife and I, for example, are in our mid-50s and self-employed. We live in rural South Dakota, so we have very few choices because most companies don’t cover places with low population density. Our deductible is about the price of a brand-new, entry-level automobile with rollup windows and no CD player. On top of stiff monthly premiums, we pay for everything except a major catastrophe.

Under Obamacare, people who don’t have coverage — or have awful policies like ours — can enroll in the federal health insurance marketplace (that infamous website). This allows one-man shops or small-shop employees who don’t have a company plan to enroll in one that covers essential benefits and pre-existing conditions. When it’s finally working, you’ll be able to click on a button and select your state.

You can also call 800-318-2596, 24 hours a day, seven days a week and apply over the phone. Or you can apply with a paper application (just download the form — that part of the website works) or in person with an assister (to find one, go to localhelp.healthcare.gov).

Open enrollment in the federal health insurance marketplace started Oct.1 and, as of the first week of November, is supposed to run until March 31, 2014. My guess is they’ll extend that. The concept was to have a one-stop store where people could fill out one application and then learn if they can get lower costs based on income or compare all of their coverage options side-by-side and then enroll in the plan they choose. It was designed to eliminate the overwhelming challenge of contacting every company that offers insurance in a geographical area and make it easier for us to find policies.

Why most Republicans oppose it

Health insurance, by its nature, is designed to spread the cost of providing health care across the widest population, so that healthy people can help pay the bills for sick people. We all get sick and well over time, so the concept is a good theory. It works well in the auto insurance field, where good drivers all across America subsidize my youngest son.

So, Obamacare took that model, where all drivers are required by law to have auto insurance before they start their vehicle, and applied it to the health care industry. All of us at some time require medical attention. By spreading the risk across 300-plus million people, we should be able to reduce the costs for everyone, right? Well, it’s not that simple. We have an aging population, so there are more people at the old end of the scale than the young end, and us old folks are the ones who tend to have the most expensive illnesses, except for pregnancy/childbirth.

The law says that people who don’t obtain coverage must pay a per-month fine on their federal income tax return for every month they are without health insurance. In 2014, that fine is $95 per adult and $47.50 per child, or 1 percent of income, whichever is higher. The family max is $285. People who make less will be asked to pay less. A woodworker making less than $45,960 as an individual or $94,200 as a family of four might be eligible for tax credits through the federal exchange that would reduce his/her monthly premium.

Many Republicans think this smacks of socialism, which Webster defines as “a way of organizing a society in which major industries are owned and controlled by the government rather than by individual people and companies.”

The government doesn’t own the health care industry and it obviously doesn’t control it either. What it is seeking to do is regulate it as it does in lots of other industries like banking and the stock market. But Obamacare does mandate universal participation: that is, we all have to be part of it. That limits free choice, an essential element of free markets and a cornerstone of American philosophy. People who object to the law point out that there is no law saying we have to buy stocks or open a checking account or even drive a car. They have a point.

Unfortunately, we all do need health care. And, as with other essentials such as food, it needs to be regulated. How much is the question.

The impact on self-employed woodworkers

First of all, there is no law saying that self-employed or uninsured woodworkers have to buy health insurance through the new exchanges. We are absolutely free to stay with our local agent, if we already have one. However, it does seem like it would be worthwhile to use the exchanges to check how much premiums will be with other companies. And we can also use it to see if we qualify for tax credits that might reduce our monthly premiums. If you’re a younger woodworker with kids, you probably qualify.

Perhaps the biggest thing this law does is to eliminate the ability of insurance companies to deny or restrict insurance for people who have pre-existing conditions.

And here’s another critical change: you can no longer be dropped from coverage when you are sick. In addition, companies can’t place lifetime or even annual limits on your coverage. And preventative tests and treatments must now be included at no additional out-of-pocket cost.

Keep in mind that Medicare is not a part of the new law. If you already have Medicare, you just hang onto it. Both Medicare and CHIP (the Children’s Health Insurance Program, which provides free or low-cost health coverage for more than 7 million kids up to age 19) will be expanded to provide insurance for up to 16 million more Americans who simply can’t afford private healthcare premiums. If you fill out an application on the federal exchange, it will tell you if you or your family qualifies for these programs.

If you’re a woodworker who can get health insurance through your employer, then you can only receive exchange tax credits (the ones that reduce monthly premiums) if the boss covers less than 60 percent of the premium cost or doesn’t provide quality insurance or provides insurance that will cost you more than 9.5 percent of your family’s income.

The impact on bigger shops

Shops with more than 50 employees will be required to provide health coverage to all of their workers by 2015 and employers who don’t comply will have to pay a per-employee fee. That sounds harsh, but the reality is that almost all big woodshops already take care of their people. Forbes magazine thinks that, in an effort to circumvent this requirement, many companies will divide their employees into divisions that will stand alone and each will have fewer than 50 employees.

Small businesses with fewer than 50 full-time employees can use the exchanges (specifically, a section of the website called SHOP, or “small business health options program”) to purchase group health plans for their employees.

Woodshops with fewer than 25 full-time employees can use the exchanges to get subsidized insurance for their crew. Enrollment in most of the small-business SHOP exchanges (that were scheduled to open Oct. 1) weren’t able to enroll online until November. As coverage doesn’t start until January, that shouldn’t be too much of a problem. Earlier, the government had said that it would delay implementing a SHOP feature providing employees more flexibility to choose their health plans until 2015.

Stay tuned …  

This article originally appeared in the December 2013 issue.

Comments (1)
1 Friday, 20 December 2013 23:15
Paul Miller
I don't think John really did much research into the Affordable Care Act (AHA). The current policy he describes for himself and his wife will not longer be available and that is the a problem. John and his wife choose a policy that fit their needs and something they felt they could live with. They no longer have that option.

John also makes a point that under the new law, all doctor visits will be totally free without any co-pays. This feature along with many other mandated coverages will drive the costs up tremendously, and the insurance companies have no way of knowing how much. Therefore, the insurance companies must estimate those costs and price policies high to cover the anticipated costs. For many, more than a few, this will make health care costs unaffordable.

Also, I do not think John knows what a "pre-existing condition" is. A pre-existing condition is a condition that someone has "prior" to obtaining health insurance. Insurance companies cannot deny coverage to someone that develops a medical condition provided that they had insurance prior to the condition. Under the new law, I could go without coverage, pay the fine and if I develop a major illness, I could then get an insurance policy. There will be more than a few people that will choose this option and this will only increase the costs for the current policy holders.

The bottom line is that the AHA is a government mandate not only that everyone must have health care, but also what type of health care policy is allowed and eventually who will get what type of care. All of these decisions will be made by the government rather than by people like John and his wife.

Finally, John implies that it is only Republicans that dislike this law, he is wrong. This law is disliked by both sides of the political spectrum for many reasons.

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