Obamacare Is About To Sucker-Punch Ohio Employees
A study of small employers in Ohio shows full Obamacare implementation will cost $2,434 more per employee.
By Patrick Paule
July 6, 2015 - The Federalist
A Ohio Association of Health Underwriters survey shows that the end of
transitional relief plans—often referred to as grandmothered health-insurance
plans—will bring significant rate increases to small businesses when they renew
in 2016. Their analysis found Obamacare-compliant plans will cost employers an
additional $2,434.67 per employee per year.
The survey gathered data from 625 small businesses that are OAHU members, and
the findings are staggering. A whopping 563—more than 90 percent—will see an
average increase in premiums of 37.9 percent. In many cases, not only will the
rates be shocking, but employees will find reduced benefits. Obamacarefs
mandated metal tiers for benefits eliminate many options for small businesses,
including some of the most popular options that were sold in Ohio.
For employers with less than 50 employees, the health-insurance system was
working—not to perfection, but definitely better than Obamacare. They had
flexibility in benefit design and went through an underwriting process that
protected them from catastrophic conditions. Businesses were also allowed to
stand on their own by rating premiums on employee health status.
More importantly, the small-group market already had all of the key
protections of Obamacare. It had guaranteed issue. It had no pre-existing
conditions, with the caveat that someone had prior insurance coverage. Plans
provided coverage for many of the essential benefits required under Obamacare.
While it didnft limit the maximum out-of-pocket, according to Kaiserfs employee
benefits surveys many of these plans carried an average of around $3,000 per
person.
Compare that to Obamacarefs maximum of $6,850 per person for 2016, and itfs
easy to argue that under the law employees of small businesses have lost
significantly more than they have gained. Itfs also a key reason why the Obama
administration rushed through a rule to allow people to keep their current
plans.
The End of Transitional Relief
Transitional relief was created late in 2013 by the Obama administration for
two other reasons. First, it provided a Band-Aid for the jugular-wound lie of
gif you like your health care plan, you can keep it.h Second, the administration
knew from insurance company filings that Obamacare-compliant insurance rates
were going to be significantly higher. Thirty-four states elected to allow
insurers to continue offering old policies.
Next year, grandmothered plans will be gone. They will be replaced at renewal
on or before October 1, 2016. Now is the time when small businesses are
budgeting for next year, and benefits professionals are working with these
clients discussing strategies and sharing the impact these new benefits and
rates will have on their bottom lines. With health insurance being one of the
largest line items in a small-business budget, it will be hard for many of these
companies to continue to offer the benefits they have today.
With huge rate increases and less benefits, small-business owners will face a
tough decision. It leaves them with three options. One, they can absorb the high
cost increase. Two, they can reduce benefits to bring them to their current
costs, or they can reduce employee wages and try and maintain the same level of
benefits. The third thing they can do is simply stop offering insurance and
allow employees to purchase on their own.
Obama promised us the moon. Premium savings of $2,500 per family, if we like
our plans we can keep them, and if you have coverage through your employer
nothing will change except better benefits. His administration stood by these
promises while delaying any negative realities over and over again. We are five
years into Obamacare, and the president now tells us: gWe can now say this for
certain: the Affordable Care Act still stands, it is working, and it is here to
stay.h
Fortunately for small business and the middle-class Americans that work hard
for them, they havenft felt how it is gworkingh yet. They have been saved by the
bell time after time with delays. Now we are approaching the end of delays to
the employer mandate and grandmothered plans.
Will the Obama administration delay the law again? Maybe, but they can only
delay the inevitable for so long. Until then, I can say for certain that, while
Obamacare still stands, it definitely isnft working, and once the 80 percent of
our population who receive insurance from their employers are negatively
impacted it definitely wonft be here to stay.
Patrick Paule is a health insurance professional with Savage & Associates in Bowling Green, Ohio.