I was recently asked if when deciding on a healthcare plan for our company do I first consider what’s best for the company or the employee. It dawned on me that some think company owners consider healthcare an obligation. I explained. Companies provide healthcare plans as part of the compensation/benefit package. Employees migrate from one job to another based on the total package, which usually includes a healthcare component. Companies can provide healthcare to employees at a lower cost than an employee can purchase for themselves. And then the answer—we determine what we think is the best plan for anyone, myself included, since I’m on the plan, and then negotiate with the provider for the best deal on that package of benefits. Some have come to work for our company when the healthcare package was the deciding factor. That’s not unusual.
And another person asked me if, as a conservative, I really wanted the Obamacare website to work.
These two questions asked in a short period of time prompted me to blog about the current state of affairs with healthcare.
Obfuscation is the act of intentionally confusing and making something difficult to perceive or understand. I think the Affordable Healthcare act is a prime example. Few have read the entire bill. The conversation the past few weeks has been entirely about the problems with the website. And now the conservative news programs are showing clips of promises made that evidently won’t hold true as Obamacare rolls out. Liberals brush this off as conservatives hoping Obamacare won’t succeed or not giving it a chance to succeed. This is obfuscation at its best. Everyone is focused on the peripheral and few are learning the facts. Each side says the other side is wrong or biased and neither side is addressing the facts. There’s talk about cost but little conversation about what is meant by cost. And cost conversation is cost of healthcare coverage.
Since I help run a medium sized company, it’s almost impossible for me to be unbiased in this arena. But I will try to point out some facts for all to research on their own. Illumination is the key.
First, specific rules and regulations regarding to Obamacare continue to be defined. Deadlines are being extended and exemptions are being made almost daily. With regards to Obamacare, the line between the executive and legislative branch of government is almost non-existent.
The good news about Obamacare is that it provides a healthcare solution for everyone, including those with a pre-existing condition. Everyone knows someone who can’t get healthcare coverage due to a pre-existing condition. Few deny that this is a good idea.
The law requires companies that employ 50 or more to provided coverage. It actually says 50 or equivalent to 50 and full time is anyone working 30 or more hours per week. So, if two different people are working 15 hours each week, that’s equivalent to one full time employee.
Insurance companies are limited to a 5% gross profit. Profit in excess of 5% must be returned to the policy holders. This rule essentially insures that insurance companies will make a 5% profit and unintentionally drives up the cost of insurance for all.
Where the law becomes murky is the minimum benefits required for every policy, including maternity for men and women of all ages. Most companies will be required to provide premium insurance coverage to all employees. These types of requirements will drive up the cost of healthcare for many, but that increased cost for ‘them’ will lower the cost for ‘others.’ So, while one group pays more, the other pays less. The problem in this scenario is that one group is being forced to pay for something they’ll never use.
In my opinion this is akin to making everyone on the street pay the same for electricity regardless of usage. So, the older retired couple pays the same as the family with five kids whose house looks like something out of a Chevy Chase movie. It’s a great deal for the family of five, but not so good for the retired couple.
Essentially, everyone will have healthcare coverage. Those who don’t have a healthcare plan will pay a fine if two things occur. Those without coverage will be identified only if they need healthcare, which will be paid for by the government. And the fine will be assessed on their next tax return. This assumes they are filing a tax return, which millions of Americans do not. It’s my guess that many of those who won’t bother to get healthcare coverage are the same people who don’t file a tax return. How this conundrum will be solved isn’t being discussed. We’re focused on the crummy website.
In order for the government to pay for all of this, many new taxes are being levied. There’s a new Medicare tax on investments and Medicare payroll tax has been increased. All healthcare plans have a Health Insurance Tax, drug companies are being assessed a tax on prescription drugs and medical devices, including things as mundane as a tongue depressor. There is a lower cap on HSA and FSA accounts. All of these additional taxes are being passed along in the form of higher prices.
The law calls for employers to report on the employee’s WII, the value of the healthcare benefit provided to the employee. Now, there’s no provision for the employee to pay taxes on this benefit, but I think the proverbial writing on the wall is clear. Eventually, everyone will be paying income taxes on their employer provided healthcare benefit. No wait, that provision has been delayed until 2015.
Talk to someone with diabetes and learn how their prescription drug experience has changed. Doctors used to be able to simply write a prescription for diabetic medication. Doctors now must provide the pharmacy with all kinds of medical history on people needing diabetic medication. I’ve yet to fined anyone who can explain why it’s necessary to send this additional personal medical history to the pharmacy, often via a fax machine for all to see.
What’s the biggest problem with Obamacare? Glad you asked. Obamacare doesn’t address the central problem with healthcare. Cost! Obamacare does an exhaustive job of providing healthcare to every person living in America, including illegal aliens. And the plan provides for the funding of this expansive initiative. One can debate the merits of the plan, but revenue will be collected by the government, in the form of new taxes.
Drug companies will continue to profit from treatment rather than cure. Doctors will continue to perform unnecessary tests and prescribe unnecessary drugs in order to comply with liability insurance requirements. And too many Americans, knowing healthcare will be provided, will continue lifestyle habits that contribute to poor health.
The murkiest line of all is the one that separates need, want, and entitlement. People will work first for need, and then for want. Few will work for that in which they feel entitled. The government is telling us that healthcare is an entitlement. Is it?
We do what’s right for our employees. I hope the Obamacare website starts working soon. It can only help people learn about the true consequence of the elusive law.