Let’s be honest. Nobody thought for a second the Affordable Care Act, i.e., Obamacare, would meet its deadlines.
States are balking on setting up mandatory insurance exchanges, perhaps rightfully confident that the federal government would push the massive costs, as well as responsibilities, of implementation on them.
So, it should have come as no surprise to small businesses that the Obama administration recently announced it was putting off implementing a key part of ACA intended to provide affordable health insurance to small businesses and their employees.
That’s no small detail; that aspect of the health care law was dangled as one of its glittering assets.
The law, as passed in 2010, was designed to create a new insurance marketplace specifically for small businesses, beginning Jan. 1, 2014. It was to give workers in small businesses a choice of health plans from which to choose. It’s an option already available to workers in big companies. But, as reality sets in, workers in small businesses are realizing they will be limited to a single plan.
The small-business provision of the 2,400-page law is being delayed to 2015 in the 33 states where the federal government will be running insurance markets known as exchanges. The delay will apply to other states, as well.
The delay comes as no surprise to Dr. Keith Kantor, who headed of a House of Representatives’ blue ribbon advisory committee on health care legislation. Kantor made some proposals that he said the House approved but the Senate rejected out of hand.
The law’s legions of critics — it was passed with strict party-line majorities in the Democrat-led House and Senate — predicted there would be problems with such a massive piece of legislation.
“I believe they were right,” said Kantor, author of “What Matters: Leadership Values That Just Might Save America” and CEO of Norcross, Ga.-based Service Foods Inc., an all-natural food company.
“It’s that they’re doing it the way government always does it — piecemeal,” Kantor said.
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In this case, businesses still will have to offer insurance Jan. 1, 2014, but if they opt out and choose to pay the relatively nominal penalty for not covering employees, there will be few or no insurance options for employees outside the private market. And, because insurers have to cover everybody, including dependents under 26 years old, rates will shoot upward.
“A lot of this was inevitable,” Kantor said, adding that he read the bill cover to cover and it took 10 days to do so. He also noted that the law comes with 20,000 pages of regulations that stack 7 feet high.
Kantor said he sees preventative care is key to getting a handle on the health care mess in the U.S. And some businesses, he said, are on the right track in establishing health and wellness programs.
He also predicts a “two-tier health care system” will emerge. In the top tier, the “top 5 to 10 percent” of patients with the means to do so will sign up with “concierge” doctors who, for a prepaid fee, will see them on short notice, talk with them at length, even return their phone calls or email queries.
Everybody else will be thrown into the Obamacare system that will feature longer waits, shorter visits with doctors and mountains of paperwork, Kantor said.
For small businesses, though, the heart of the issue is cost, Kantor said.
“They’re going up, and you still have to provide all those things and small businesses can’t afford it,” he said. “They either have to give up a sizeable share of their profit or drop (coverage) and pay the penalty and that’s what a lot of them are going to do.”
Small businesses already have announced they would cut employee hours or simply not hire extra help as a way to deal with the law.
“They’ll do what they can to stay in business, and they’ll be vilified for it,” Kantor said. “But the choice is stay in business and be called names or go out of business. We put them in a hard position.”