One of the most hotly contested laws in our history, the Patient Protection and Affordable Care Act, signed into law in March of 2010, rarely is addressed by its correct name. Instead, the landmark legislation most often is referred to as President Barack Obama’s Healthcare Reform Initiative, the Affordable Care Act (ACA), or, derisively by its detractors, Obamacare. The law’s appellation aside, the debate surrounding what has become the president’s signature achievement—the overhaul of the nation’s health care—has polarized the nation, reaching a climactic phase in January, when the first half of the law’s open enrollment period ended.
According to official federal health enrollment figures from the first three months, more than 2.1 million sign-ups were notched between Oct. 1 and Dec. 28. Despite a nightmarish, glitch-filled rollout, the high enrollment numbers are on target to meet the Congressional Budget office’s generous projection of about 7 million enrollees by the end of 2014. Coverage does not take effect unless consumers pay their initial bill. However, there has been a lot of confusion and misinformation about the deadline to sign up, and even more confusion about when the first payment is due. Dates have changed from state to state, and from insurer to insurer. The open enrollment period for the Affordable Care Act runs through March 31, allowing plenty of time for folks to sign up.
Although some insurance industry experts contend that the good outweighs the bad in the new healthcare mandate, navigating the quagmire of related web sites, paperwork and specifics is a daunting task. The vast majority of the uninsured and under-insured in America are African-Americans, Latinos and lower to moderate income earners, and some reports indicate that health insurance marketplaces, more commonly referred to as “exchanges,” are steering these individuals into Medicaid, the federal government’s medical insurance for the poor. Under the new law, Medicaid coverage will be expanded in some states to cover anyone with income up to 138 percent of the federal poverty line, which is just under $16,000 for an individual and about $33,000 for family of four in 2013. In the northeast, New York, New Jersey and Connecticut have all expanded Medicaid coverage and Pennsylvania is negotiating with the federal government to do an alternative expansion.
Take heed, entrepreneurs
Perhaps the key to understanding the Affordable Care Act is to bear in mind that it has been designed to lower the cost of health care and coverage for all Americans, extend coverage to young adults under their parents’ insurance, and offer coverage to individuals with pre-existing conditions. When you narrow the focus of the mandate to small, minority and women-owned businesses, and its impact on these enterprises, the benefits and guidelines become a bit more complex.
The mandate provides entrepreneurs, self-employed individuals and part-time workers access to affordable health insurance coverage. However, addressing the National Minority Supplier Development Council in California in October, Janice Bryant Howroyd, CEO of Act 1 Group, a staffing and human resources consulting firm that is also the largest African-American female owned business in the country, noted that business owners must be clear about all aspects of the law, not just the insurance component. For example, when reports reach the public that the law’s implementation has been delayed, it should be made clear that the delay in question refers only to the health care compliance aspect of the mandate. Other key aspects—pertaining to taxes, for instance—are moving forward. “Small business owners must realize that new taxes are in place on some income,” Howroyd said.
One of the more controversial segments of the new health care law is a measure that requires all businesses with 50 or more employees to provide health insurance. It is a myth that businesses can avoid the mandate by reducing current employees to part time, hire more part-time workers, or classify employees as independent contractors.
“Part time employees are considered in determining whether the 50 employee rule is satisfied,” explains Elizabeth Fullington, an attorney and director of business development at Global Resources, an Illinois human resources management firm. Small businesses that use independent contractors to avoid the 50-employee rule are running a big risk, as the IRS aggressively audits worker classification. “It’s impossible to reclassify current employees as independent contractors without drastic changes in their compensation, oversight and status,” Fullington says.
Nearly every U.S. citizen will be required to have health insurance this year, and every employer with more than 50 workers must provide insurance by 2015. Individuals who fail to obtain coverage will be penalized, as will non-compliant employers. Each plan in every marketplace will be organized by tiers named for metals: bronze, silver, gold and platinum. The lower the metal on the value chain, the lower the premiums or the amount an individual pays each month. Less expensive plans have higher cost sharing, resulting in higher deductibles, co-pay and other fees.
What we still don’t know
As supporters and critics alike assess the Affordable Care Act’s enrollment environment, questions have arisen in a number of areas. These include:
Plan cancellations: How many of those who signed up for coverage previously had plans that were canceled by insurance companies? If ACA policies are merely replacing coverage that individuals had, the law won’t make the dent in uninsured figures that proponents hope for. In New York, only 44 percent of the early enrollees had been uninsured.
The overall health status of early enrollees: Age often is a clue to an individual’s overall health. Health industry experts contend they need to know more about the health of those who enrolled in the exchanges to determine if the insurance risk pool will be balanced and keeping a cap on premiums in the future. For example, Humana Healthcare reported in early January that the mix of its early enrollee pool was “more adverse than expected,” due in part to the Obama administration’s edict allowing those with canceled policies to remain in those for another year.
Impact on long-term treatment options for people with cancer: In December, the Community Oncology Alliance, a cancer research and advocacy group in Washington, urged Congress to reexamine or suspend cuts in reimbursement to seniors for cancer treatment services. The federal budget sequestration cuts to cancer drugs and physician-run community cancer-care clinics could have a devastating impact on hundreds of communities. “Oncologists are being hit by insurers that are cutting them out of Obamacare exchanges and Medicare Advantage Networks,” says Ted Okon, the alliance’s executive director. “This drives up costs and jeopardizes this country’s cancer-care delivery system.”
Who gains the most
Various studies and health-access indicators show that African-Americans and Latinos, who, research indicates, are more likely than other ethnic groups to suffer from such grave illnesses as diabetes, cancer, heart problems, hypertension and HIV/AIDS, will gain the most from the ACA. “One of the most important changes under Obamacare will be an emphasis on more disease prevention education, wellness programs and mental health treatment options for not only people of color, but for everyone,” says Jabbar Zafar, a physician at the University Medical Center of Princeton in New Jersey.