Q&A about health reform

I’m speaking to a group of 100+ insurance agents at an event hosted by a general agency in San Antonio, Texas this coming Friday. Yesterday, to help promote the event, the owner of the agency interviewed me for a talk radio show that airs every Sunday morning in San Antonio. I thought I’d share my answers (paraphrased) to the questions I was asked on the program:

With the recent announcement about the employer mandate being delayed, opponents of the legislation are calling for more provisions – like the individual mandate – to be pushed back as well. Do you think the entire bill will end up being postponed?

No, I really don’t, but I also didn’t think the employer mandate was going to be delayed, so the truth is that nobody knows for sure what’s going to happen. I’ve often compared this law to a hurricane – it’s really big and it’s unpredictable and it’s going to do a lot of damage, but we won’t know the magnitude until it actually hits. So the best we can do is prepare for all scenarios and be ultra-prepared for the most likely ones.

So what do you think about the employer mandate being postponed until 2015? What exactly does that mean for employers?

Well, for small employers, it doesn’t have any impact. They aren’t required to offer coverage, so they can make a decision based on what’s good for their employees and whether the group health plan is perceived by them as a valuable benefit. Large employers, though, have had to factor this penalty into their decision-making process. Now, with the mandate delayed, they can make their decision the same way they currently do and the same way small employers will next year – based on what their employees want them to do. The difference next year for employers of all sizes is that some employees may no longer want them to offer coverage. That’s because many of the benefits of a group health plan are no longer benefits, and it could actually end up hurting some of the employees by blocking them from a government subsidy.

You said that if an employer offers health insurance that could end up hurting the employees. Can you elaborate a little on that?

Sure. Starting next year, there will be “low income subsidies” available to help people without employer-sponsored insurance pay for health insurance through the government’s new online marketplace. The only thing is, it’s not just for low-income individuals. They’re available all the way up to 400% of the federal poverty level, and about two-thirds of all Americans earn less than that. Unfortunately, if the employer coverage is considered affordable based on the employee’s single premium and the household income, not only the employee but his entire family is ineligible for the premium tax credits.

A lot of our listeners are either close to or already on Medicare. What can you tell me about how the law impacts them?

This law was designed primarily to help uninsured and underinsured Americans. While there are changes to the Medicare program, many of them are positive changes – like expanded preventive care and the closing of the coverage gap, or “donut hole”. Some money was diverted from the Medicare program – primarily by reducing payments to Medicare Advantage plans – to help pay for the law, but most of these plans will survive. Employers, employees, and individuals under age 65 will feel much more of an impact than people with Medicare.

Most of the opinion polls that have been conducted find that the public is still pretty divided on this law and that half the country is opposed to it. Why would the government pass and continue to promote such an unpopular piece of legislation? Does any good come out of it? In other words, does anyone benefit from it?

I’ll start with the last question. Yes, – some people definitely benefit from the Affordable Care Act. It would be difficult to design such a massive piece of legislation and not to help someone in the process. The problem is that for everyone who wins, someone else loses – and many would argue that there are more losers than winners. Those who are paying less because of the current system will likely pay more, while those who are paying a lot right now may end up paying less.

As for the opinion polls, it is true that the law has been and continues to be unpopular, but it’s also true that the vast majority of Americans don’t really understand it, and over 40% of the population isn’t sure if it was repealed or not. So it will be more interesting to see people’s reactions after the law really starts impacting them.
Since the public is so uninformed about the law – or at least unaware of many of its provisions – how would you explain the law to someone in 60 seconds or less?

For our listeners, what one piece of advice would you give them heading into 2014?

I would tell them to be open minded. Too many people have made up their mind about the law without actually seeing how it will work. Yes, some people will be hurt by it, but others will benefit – it’s not all good and it’s not all bad. The good news is that the government agencies that are working to implement the law, like the Department of Health and Human Services and the IRS, really are trying to make this work, and they are making some good decisions. For example, the government has been very open to working with insurance agents and brokers, so consumers aren’t in this alone – they’ll have access to licensed insurance professionals who can help them pick a plan that’s right for them.

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