Will Obamacare Help - or Hurt - Rhode Island Businesses?
Wednesday, October 02, 2013
HealthSource RI, the state's health insurance marketplace, officially kicked off open enrollment period yesterday, on Monday, October 1.
Between 70,000 and 100,000 Rhode Islanders are expected to enroll for coverage this year. According to Dara Chadwick with the Health Benefits Exchange, there were 1,889 calls, 30 walk-ins, and over 600 e-mails sent on day one, despite website issues in the morning that were addressed by mid-day.
However, some members of the state's business community are questioning if the exchange will have a positive impact on their bottom line -- or possibly not.
"Many businesses have yet to determine if the Exchange will prove itself to be a resource that is helpful by delivering value-based affordable insurance," said Lisa Blais with taxpayer advocacy group OSTPA, "Businesses are interested in receiving more information on the long term costs to run HealthSourceRI."
However, Blais questioned how the program could be sustained moving forward. "The fact that the Exchange is supposed to be self-sustaining once the federal dollars run out point to increased premiums over the long-term. There is only one of two ways that revenue will be available for the Exchange to operate: 1. Premiums increase to cover those structural costs and, 2. the money comes from the State's general revenue. Both revenue streams translate into increased health insurance premiums and/or new taxes."
Day One Off to Big Start -- and Big Concerns
In addition, the new portal is also offering health plans for Rhode Island small businesses with 50 or fewer employees -- which some in the business community are questioning its merits.
"I think in large, everyone's aware of the impact, the info that's out there is certainly sufficient," said Bill McCourt with the Rhode Island Manufacturers Association. "I don't know of anyone who's been able tout any success stories though."
McCourt continued, "I think what most people have learned is that this will negatively effect their rates, but how much so is uncertain, or if it's worse that what they would have experienced otherwise. I don't think this is doing anything to reign in the costs of healthcare. The employer in the end might be able to contain costs, but then it falls on the employee."
However, McCourt saw an upside to the exchange. "As a positive, some companies might see this as a way of "getting out" of the health care industry. Over the years, they've had to spend more ande more time dealing with their company's health care.
GoLocal spoke with small business owner Chad Callanan, owner of a vet clinic in East Greenwich, who said he had "absolutely no understanding" of what the new health insurance exchange entailed.
"No information by any governmental body has touched this organization. No representative has visited, nothing but lightweight commercials saying it exists but no hard data," said Callanan.
He continued, "You need folks who can explain this, not 30 second spots saying how great it is and how its available. It needs to be tailored to the business owner not the 20 something with no job no future and no ambition," of the television spot that is currently being aired.
Academics Weigh In on the Record
"Most businesses are against the Health Exchange even though they do not understand the purpose and benefits of the Exchange. They assume that it is going to raise their rates of health insurance on a continuous basis," said Mazze.
He continued, "The Health Exchange will not affect businesses that offer health insurance to their employees unless the employees are paying an unaffordable rate based on their earnings. The Health Exchange is a market-place for individuals to compare insurance rates. The insurance offered is by well-known companies with a national presence such as Blue Cross/Blue Shield."
"Although businesses believe that the effect of the Exchange will be increased rates in the future, there is no evidence that these rates would have stayed the same without the Exchange. There is a good chance that rates may be lower once everyone is insured, the risk is spread, there is more competition among companies and hospitals and other health providers become more efficient and responsible," stated Mazze.
"The Health Exchange will make it easier for individuals to get health insurance who have fallen between the cracks such as graduate students, new entrepreneurs, the individual working at a job where there is no insurance, the person with medical preconditions and the household that can not afford insurance. A benefit of the new program, when fully implemented, will be that fewer people will need to file for bankruptcy because of health costs. It is about time we provide health insurance to everyone."
Providence College Professor of Health Policy and Management Dr. Robert Hackey, who has taught such classes "American Heath Care System", and "Policy Analysis in the Health Care Sector," offered additional perspectives on small businesses on the exchange.
"Your options as a business depend on where you are at the moment. If you haven't been providing coverage, there are subsidies for 25 or fewer workers, if your average salary is less than $50,000," said Hackey. "The catch is that you have to cough up the money. That's why a lot of folks don't know what's going to happen."
"This is supposed to be the healthcare equivalent of Expedia, Orbitz, Hotels.com," said Hackey. "Blue Cross is really the only player in the individual market in Rhode Island, United has several plans on the small business side as well though.
Hackey said that the limited market puts the onus on the individual -- and doesn't necessarily drive costs down. "It certainly doesn't contribute to lower prices. When folks select plans, they need to be careful, and make sure it fits their needs. We've seen a lot of the offerings have high deductibles, while the focus so far has been on the affordability of premiums."
Unlike Callanan, Hackey thought the current HealthSource RI television spot was effective.
"I thought the commercial was well-done," said Hackey. "Rhode Island is in the vanguard on this one. A lot of the other states have lagged, they didn't want it. 36 states are letting the Federal Government run it. We've been committed to the exchange from the get-go....our roll out should be smoother than other states."
"The jury's out -- I think it should be a plus, but small businesses will find they get better choice for their workers," said Hackey. "We're pooling our purchasing power here, and it's entirely voluntary for small businesses if they want to participate or not.
Mix of Optimism and Caution
"Many small employers we've talked to are excited to hear about the Full Employee Choice option, which lets them designate a plan at a particular contribution level while still giving employees the flexibility to choose the plan that's right for them," she continued. "One thing we do want small employers to know is that they can continue to work with their broker."
Former Director of Administration and Founding Director of the Hassenfeld Institute for Public Leadership at Bryant University Gary Sasse was cautious in his look at the exchange. "It is too early to say if business has a good understanding. I am hearing a lot of questions which indicate that a lot will depend on the effectiveness of the Exchange's public engagement campaign."
"I think the more important policy issue is whether or not ACA will have a positive or dampening impact on the growth of full time jobs. The jury will be out for awhile before we can measure the impact of ACA on jobs. Initial national reports do raise some concerns," said Sasse.