Own a small business? Brace for Obamacare pain

[Gingersnap]

Own a small business? Brace for Obamacare pain
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(Thinkstock)

By JENNIFER ROBISON
LAS VEGAS REVIEW-JOURNAL
Local business owners might be hoping the Affordable Care Act’s insurance mandates cover sticker shock.

The law’s employer coverage mandate doesn’t take effect until 2015, but early plan renewals are starting to roll in. And for some businesses, the premium jumps are positively painful.

Local insurance brokers are reporting spikes ranging from 35 percent to 120 percent on policies that renew from July to December. The increases are especially acute among employers with workforces made up of younger, healthier men. That’s because Obamacare prohibits offering lower rates to healthier groups. It also narrows the allowed premium gap between older and younger enrollees.

“It’s like if there were no more safe-driver discounts with State Farm,” said local insurance broker Frank Nolimal of Assurance Ltd. “Everybody has the same rate, whether you have three DUIs, or you’re a (nondrinking) churchgoing Mormon.”

The changes put as many as 90,000 policies across Nevada at risk of cancellation or nonrenewal this fall, said Las Vegas insurance broker William Wright, president of Chamber Insurance and Benefits. That’s more than three times the 25,000 enrollees affected in October, when Obamacare-compliant plans first hit the market.

Some workers are at higher risk than others of losing company-sponsored coverage. Professional, white-collar companies such as law or engineering firms will bite the bullet and renew at higher prices because they need to compete for scarce skilled labor, Nolimal said.

But moderately skilled or low-skilled people making $8 to $14 an hour working for landscaping businesses, fire-prevention firms or fencing companies could lose work-based coverage because the plans cost so much relative to salaries.

Employees who keep their coverage might see leaner take-home pay, which could hurt the economy.

Nolimal said one business client whose monthly premiums will rise from $160 to $340 in June plans to shift most of the increase onto his employees.

“Just like when you see gasoline prices going up an extra dime a gallon, it takes money out of the economy for things like buying a new stereo or having dinner out on the town,” Nolimal said.

The premium hikes could have political implications, as well. Nolimal estimated that as many as 85 percent of small-group plans will renew in November and December. Because new premiums go out 60 days before coverage takes effect, those price hikes will hit mailboxes in September and October — just before November’s elections.

That may be why Wright said Nevada lawmakers seemed keenly interested in hearing what he and other brokers had to say during a recent visit to Washington.

He said lawmakers were “very receptive” to the idea that Nevada officials should embrace a federally established transition period that would let businesses keep their existing plans for at least one more year to blunt the effect of today’s higher costs.

Nevada Insurance Commissioner Scott Kipper said March 25 that he doesn’t have the discretion to allow noncompliant plans to stay in place, based on advice from Nevada Attorney General Catherine Cortez Masto. That decision mirrored a fall conclusion that it would be illegal to reinstate the first wave of canceled plans.

But Wright said he has an opinion from a national law firm that says the small-group situation is different, because it involves policies not yet canceled. He said he and other brokers will work over the next few weeks to sway the commissioner.

Review Journal

[RobJohnson]

At some point my deductions for insurance will be greater then my take home pay.

[Novaheart]

I think there would be a better climate for cooperation and adjustment if the situation were stated more clearly and honestly.



Leading Republicans in Congress are blaming the new health care law for double-digit rate increases being sought by insurance companies in Washington state, New York and Connecticut. But insurance regulators, leading health care experts and the companies themselves mostly blame an old culprit: rising medical costs.
Improved benefits required by the new law are responsible for a relatively small portion of the increases. Furthermore, the increases apply mostly to those buying policies individually, not the majority who get private insurance through employers. Those with employer-provided plans won’t see as much of an increase in premiums, since many of their policies already include the required benefits, a spokesman for an insurance trade association told us.
Some Republicans have claimed the law is responsible for "whopping" premium increases, but they have misrepresented the facts in the process. For example:
House Speaker-in-waiting John Boehner said premiums will "skyrocket" because of the law, citing a report on rising premiums by the Kaiser Family Foundation. But the Kaiser report covered increases that took effect before the law was signed.
Senate Minority Leader Mitch McConnell points to a news story about a Washington insurance provider that blamed premium increases on the health care law. But the state insurance commissioner says the increase had "absolutely nothing to do with health care reform," and the insurance company later admitted the law is only partly at fault.
Both politicians refer to premiums for new plans on the individual market, where only about 6 percent of those with insurance now get their coverage.
Stories about some big increases may come as a shock to those who recall President Barack Obama’s often-repeated promise that the new law would reduce most people’s premiums and bring about lower medical costs — optimistic promises that remain question marks at this point. Still, Republicans go too far when they say the law, rather than rising medical costs, is chiefly responsible for big premium hikes.