Hispanic Chamber Brings Focus on Affordable Care Act
A SHOP for Small Business
Philadelphia – The Affordable Care Act (ACA) is working: “There finally is real competition and you have real choices for health insurance.”
That was the message delivered by Joanne Grossi, the Regional Director of the Department of Human Services, and echoed by Natalia Olson-Urtecho, Mid-Atlantic Regional Administrator of the U.S. Small Business Administration, addressing some fifty small business proprietors and leaders of community-based organizations, Thursday, at a seminar on the impact on small business of ACA or what is also known as Obamacare.
“This piece of legislation will change America dramatically,” said Varsovia Fernandez, President of the Greater Philadelphia Hispanic Chamber of Commerce, opening the discussion from the GPHCC’s Broad Street headquarters.
With access to affordable health care the “number one concern” of small businesses for decades, Ms. Grossi noted that the United States had been spending more than any other nation in the world on health care, up to $2.8 trillion annually. Yet, “we were not getting the outcomes we wanted. We were 29th in the world in infant mortality and 45th in terms of life expectancy.”
Since the Affordable Care Act went into effect in 2010, Ms. Grossi noted that health care costs -as a proportion of the nation’s GDP- have dropped to 17.2 percent. Moreover, as various provisions of the law have unfolded the number of uninsured has steadily declined.
By allowing young adults to remain on their parents’ health care plan until the age of 26, for instance, 3.1 million young persons – and 913,000 Latino young adults- now have health coverage, enabling them to pursue college or job training. With 3.9 million Latinos over 65, Ms. Grossi dismissed the alarms raised by critics of the health care overhaul and the Affordable Care Act’s impact on Medicare, arguing that it has “strengthened” it, and according to the most recent Medicare Trustee report, “the system will be solvent until the year 2026.”
Other provisions of the ACA prevent discrimination against those with pre-existing conditions; and of the 10.2 million uninsured Latinos, some 6.1 million have a pre-existing condition.
Small Business & ACA
Under the Affordable Care Act any small business with fifty or fewer full-time employees can provide health coverage for employees and they will qualify for a Small Business Health Care Tax Credit to lessen the cost. Among the parameters of the health care credit, the full-time employees must earn wages below $50,000 and the employer must contribute at least 50% toward the employees’ premium costs.
In order to take advantage of the credit, Ms. Olson-Urtecho explained that the small business must buy coverage through the new small business health insurance marketplaces or exchanges, known as the Small Business Health Options Program, or SHOP.
The business exchanges spur competition for customers based on prices and quality; and by pooling risks for small groups they lower overall costs. Beginning this year, businesses are eligible for a tax credit of up to 50 percent, “a credit which is limited to two consecutive taxable years,” noted David Dickson, District Director of the SBA.
The ACA also provides for free preventive services under Medicare, so older employees can have blood tests, screenings, colonoscopies and other preventive services that carry no out-of-pocket costs or copays.
In addition, the ACA reform addressed the so-called ‘donut hole” of the Medicare Part-D, Prescription Drug program and its gap in coverage.
The gap left in the Prescription drug program, begun under Pres. George W. Bush, left beneficiaries to pay 100 percent of prescription costs at a certain threshold level. The ACA, however, will “completely close that donut hole by the year 2020.” In the interim discounts of 53 percent for brand name drugs – that gradually increase – are available to mitigate the cost.
In Pennsylvania’s exchange there are as many as nine insurance companies participating, offering plans that are differentiated by “Metal Levels,” allowing consumers to compare the levels of coverage. So a young person may choose a “Bronze” plan, which has lower premiums and higher deductibles and copays; while an older employee might select a “Gold” or “Platinum” plan that has higher premiums but lower deductibles.
Both Ms. Olson Urtecho and Ms. Grossi repeatedly stressed that the Affordable Care Act prevents “discrimination based on pre-existing conditions” and that every health plan is required to provide a range of “essential health benefits.”
In highlighting some of the other benefits of the ACA reform, Ms. Grossi spoke of the 80-20 rule, requiring Insurance companies to spend at least 80 percent of premium dollars on “your medical care.” As of 2012, insurance companies are required to report to the Department of Health and Human Services that they are adhering to the spending specifications or be compelled to pay a rebate to customers.
Since the law was enacted more than 8 million people have received rebates, ranging from direct payments of $512 and $457, to as little as $72. Others, those receiving coverage through an employer, often received the rebates indirectly through credits.
The Vice President of El Zol radio 1340 am, Uriel Rendon, raised several questions about businesses with a dozen employees or less, as well as on the high cost of family coverage. Meanwhile Mr. Gonzalez, a Legislative Aide of State Sen. Stack, questioned Ms. Olson-Urtecho about the availability of tax credits, as well as penalties, for local businesses of more than fifty employees.
While there are 727,000 small businesses in Pennsylvania, employing some 8.7 million people, according to an SBA summary report, the ACA apparently affects just four percent or less than 30,000 of all small businesses in eastern Pennsylvania.
Cecilia Munoz, Director of Domestic Policy Council for the White House says, under the health care reform, the “expanding coverage options and increasing purchasing power’ are giving consumers and not insurance companies control over their own health care. “That’s good for our businesses and our workers.”