What’s next for Healthcare Reform?
Obmacare Will Not Be Repealed.
I would like to be the first to go on record and confidently make the following statement: “Regardless of who wins the election in November, The Affordable Care Act (Obamacare) will NOT be repealed or replaced.” You can quote me on this.
How can I make such a confident statement? Because the old system was bad for small-business while the ACA is good for small-business. For the first time in 18 years as an employer, my health insurance premiums did not increase at my 2012 renewal. This has never happened before and will not happen again if we repeal the ACA.
[please see my earlier post “The impact of ACA on Small Business].
The ACA currently excludes the coverage mandate for businesses under 50 employees and offers tax-credits to help those businesses with under 20 employees purchase health insurance should they elect to do so. As a matter of fact, in 2014 the ACA even affords some employees (individuals) the ability to purchase insurance directly through state-exchanges at the lowest price available to any business in the state. They pay the same low prices available to the largest employers in the state because now, the group is defined as all residents in the state. This is good for employees and gives the small-business the option to provide the insurance or not but now they at least know that their employees can directly purchase their own portable plans , stay insured, and stay healthier.
After 2 years of arguing for repeal, no one has yet to offer a vetted replacement plan that cures the ills of the pre-ACA model or the ACA model itself. Repeal and replace is nothing more than a word-phrase that hopes for acceptance. Hope is not a plan.
To date, no replacement plan has been openly debated, argued and fact-checked. The simplistic offering of parts of generic ideas or elements of concepts as the plan for replacing a law just sounds like rambling thoughts … not leadership. As far as any of us is concerned, no replacement plans really exists. Barring a presentation of a detailed replacement which can deliver positive benefits to small businesses, I do not see any reason repeal would ever succeed. Therefore the ACA will not be repealed.
As a small business owner, I am personally experiencing a number of positive benefits from passage of the Affordable Care Act and I’m not going back to the old system. Frankly, the old system was a system of poor design, foisted upon all businesses in an incredibly inefficient manner. None of the business people I know would have ever designed the old system and left it unchanged for 50 years. The old system needed to morph and improve just like every other product or service evolves out of necessity. Why would business people want:
1. Limited Group Plans that hurt small businesses and their employees.
2. Healthcare Insurance as the vehicle to finance healthcare yet be the most expensive insurance product around.
3. Healthcare premiums that were consistently increasing by double digits from 1999-2009.
4. Expensive premium costs yielding below-average general healthcare outcomes for employees.
5. Selective exclusions specifically designed to limit access to preventative care.
6. A lack of individual portability thereby forcing employers to provide insurance.
7. A lack of direct procurement options leading to a heavy reliance on expensive middlemen.
8. Perverse incentives creating contradictory outcomes
9. Duplicative health related insurance cost buried in multiple insurance products required of most businesses.
10. The inability to receive any benefit for the improving health of the workforce.
As a small business owner, I never repeat a bad business deal and I never want to go back to the old system. Therefore the ACA WILL NOT BE REPEALED AND REPLACED.
Let’s move on to the next step, improving on what we now have.
As we approach 2013, many business people want to know what’s next for healthcare and what may come from future reform. Let me focus on just one of the 10 items listed above as previous detriments from the old system and how the current Affordable Care Act can be improved even further.
Number 9 – Duplicative health related insurance cost buried in multiple insurance products required of most businesses. Let me start here.
Did you know medical is buried in many auto, homeowner, general liability, professional liability and workers compensation policy premiums? Most people assume they are a requirement of the insurance policy , however the reality is as kong as we did not have a more universal system, we all paid many tines over for those that did not have insurance. We even have been insuring ourselves against ourselves! Very expensive. The inclusion of duplicative premiums drives up the cost of business insurance and it is illogical for America to continue unnecessarily driving up the cost of business insurance.
[If you have read my blogs, you know I do not believe healthcare should be a service financed by insurance. As you know, insurance is something most of us purchase hoping to never actually use or to only use once -see Life-Insurance to understand what I mean. Healthcare is something you actually want to use. The providers actually want you to use it as well. Only the insurers have an incentive for you to use it less and less and provide incentives to your provider to offer less and less. No wonder the incentives and the outcomes are so completely out of whack and the cost of insurance so high. However, I will not focus on my “why insurance in the first place” rant for right now and instead will focus on improving the insurance products as we go forward from here.]
Let me focus on Workers Compensation Insurance as one of the duplicative insurance premium products I will reconfigure first.
I am pushing our elected decision makers to allow for the combination of Worker’s Compensation Insurance and HMO-type Health Insurance into one policy . We call this concept 24-Hour Care. 24-Hour Care will be more comprehensive, less expensive, better coordinated and will produce healthier whole-patient individualized care. The concept is not new and has been piloted in California with very positive results. Now that ACA is law, it make even more sense to expand the pilot.
If my plan is implemented every business that offers Health Insurance can add an Indemnity Rider for long-term Occupational and Disability. All care will provided by the same doctor in the HMO plan. Speciality care will work just like it already does in the traditional HMO system. I project the premium savings to be at least 20-25%. I also project we can encourage even more small businesses not currently providing healthcare coverage yet already paying their Workers Comp premiums to provide both under a new consolidated plan.
Workers Comp has been the nations most comprehensive health and safety related product available to every businesses and every employee. While it is true workers compensation is not necessarily the same system as regular health insurance, in the modern world, more and more Comp related injuries receive the same medical treatment as regular health care does. Yes, Comp is for injuries caused at work and creates a system of indemnity and care to rehabilitate the worker back to a state of work fitness. Comp also provides for and pays the basic healthcare for some workers for their entire lives. Sound familiar?
There are many other similarities in Comp and traditional HMO-type plans.
For example, as we have moved from such a large percentage of manual labor jobs in manufacturing and agriculture, the vast majority of workers are experiencing injuries related to soft-tissue and injuries solved by outpatient medical. In 2000-2009, as many companies canceled their health-insurance, their employees miraculously discovered new injuries previously covered as traditional medical, were now the result of work-related circumstances. This new influx of claims increased the use of Comp insurance which drove up the cost of comp insurance to the business making them less profitable.
It is hard to know how often an employee claimed an injury occurred at work when in fact it occurred on Friday evening at the pick-up B-Ball game. It is equally hard to know whether the shortness of breath is a result of airborne particulates in the factory or the result of a hereditary complication. And when it come to prescription drugs, it is hard to know where work related pain starts and ends but we all know that a sore elbow receives the same medicine whether the injury occurred at work or at home.
[Prescription drugs are the fastest driver of workers comp medical costs yet we know these increasing costs are also impacting regular medical as well.]
What we do know is having two systems that are now mandatory is a perfect reason to add their thoughtful merger to the next improvement to the Affordable Care Act.
What is interesting is the cost impact of two different doctors treating the same patient for a sprained ankle; one if the ankle was sprained at work – the other if sprained at home.
Lots of paper
Variable reimbursement costs and care rates
Two insurance policies
Duplication and waste
Is this the most efficient way to get care to workers as we promote a more proactive healthier workforce? I think not. My point is why are there two systems in the first place – especially now, since both are mandatory?
Comp is far from perfect and not everyone likes how it works for everyone, however Comp is Universal, has been in place for a century, and is in every state. There is a lot of good history to work from. What makes Comp work is the fact that basically every working American is already in the system. In other words every business with more than one employee is already mandated to offer workers comp. We’re all in and capitalism has still thrived in America. In the insurance world we refer to this as a large-risk pool. Large risk pools are less expensive to insure.
The other benefit of mandated Universal Comp to employers is since workers comp is mandated on every business, a competitor can not unfairly compete against you by not purchasing insurance. As a matter of fact, the safer your company is, the lower your business cost, thus making you even more competitive. A level playing field is a very important element of our successful free-market system.
In addition, employers and employees have exceptional control over their Comp costs and their medical outcomes. The safer the work environment, the healthier the employee. The healthier the employee the more productive the worker. Healthy employees cost less to insure and produce more for the business resulting in higher profits. This is the documented proof that when businesses have incentives to control their costs while improving the health and safety of their workers, they increase their profits.
I propose using the positive lessons gleaned from a century of workers comp – the first mandated universal health insurance system for all businesses – and merge the comp and healthcare systems. If we want to continue improving upon the benefits of the Affordable Care Act, merging Workers Compensation with HMO type healthcare program insurance available as a portable option for workers in a state-wide exchange can be our proposal. 24-Hour care programs will reduce costs, improve health and safety and provide a new level of integrated care for the American worker. Giving employers similar opportunities to improve the health of their workforce while lowering their premium cost is good for all business.
Our elected representatives need to see the business community as a constructive partner offering specific solutions which can improve business opportunities. If business people want to be part of solving the big problems, we have to create actionable programs that work.
Obamacare will not be repealed. Let’s get to work on the next step towards improving our business climate and improving health-related outcomes while lowering system-wide costs. Let’s work towards 24-Hour Care for workers by merging the Workers Compensation System and HMO systems into one policy with an Occupational and Indemnity Rider. This streamlined system will result in premium savings to every business and may even draw in some of our smaller businesses not currently offering healthcare coverage.