The picture of health

Proposed new law could bring big changes to individuals, small businesses

Posted on Mar 31, 2017 :: Health Insurance
Jessica Thiel
Posted by , Insight on Business Staff Writer

Chris Booth never thought she’d find herself in this position. On her wedding day, her husband developed severe pain in his foot, which eventually developed into a debilitating neuropathy condition.

Booth, who makes her living as a musician and music teacher, and her husband have long been self-employed, and when they needed health care, they turned to the exchanges.

Booth credits the Affordable Care Act for getting her family through a difficult time in which her husband’s ability to work as a carpenter was limited. “The timing of what it was couldn’t have been better.”

Now the mom of a 2-year-old son who’s covered under BadgerCare, Booth says while the ACA hasn’t paid for all her husband’s treatments, it’s covered many of his medications. 

Things have begun to improve for Booth’s husband, but with the future of the ACA uncertain, she feels uneasy. Booth says she knows the system is flawed, and now that her family’s income is increasing, she hopes to someday purchase better insurance.

Chris Hanson, president of Hanson Benefits, is familiar with anxiety of the kind Booth is experiencing. The complete picture of the ACA replacement remains far from certain, but one thing is for sure, Hanson says. “Change is coming.”

At the same time, in Hanson’s experience, that change moves slowly. Just look at the ACA, she says, which was signed into law in 2010 and took until 2014 to take effect.

“I tell clients, in 2010 when the law was signed, it wasn’t the train that left the station; it was the vapor that left the station,” Hanson says. “One pen stroke is not going to pull in seven years of vapor.”

People shouldn’t worry about the remainder of 2017, Hanson says. “Regardless of whether Obamacare stayed exactly as is and continued to move forward, no one would know what 2018 would hold.”

Hanson, who works with small companies and individuals, says the ACA hasn’t done what it’s intended to do and needs an overhaul. The individual market began with eight providers and has now shrunk to four, and she foresees the possibility of that shrinking to two.

“You can see the writing on the wall. Competition is shrinking, not expanding,” Hanson says. “Price is increasing, not decreasing. Choice is decreasing, not increasing.”

The ACA’s employer mandate, which dictated that businesses with 50 or more employees must offer health insurance to full-time employees or pay a penalty, also was ineffective, Hanson says. Some employers decided they simply wouldn’t expand, and others realized it would be less costly to pay the penalty.

The proposed American Health Care Act would do away with the employer, as well as the individual, mandate. Despite that, Marty Anderson, chief marketing officer for Security Health Plan, says most small employers he encounters still offer health insurance.

“Employers really do need to offer competitive benefits packages to retain good employees,” he says, noting that employers also want their employees to be well and have a stake in that.

Kristen Klug-Jabas, vice president and CEO of Fox Cities Crane & Fab, an 11-employee company, agrees. Her company faces the challenge of balancing coverage with costs, and at that same time, they want to outpace benefits for companies of that size.

“Because we don’t have the benefit of a large employee pool, the expense is a little larger for us on a proportional basis than larger employers,” Klug-Jabas says.

Until six years ago, Fox Cities Crane covered 80 percent of employees’ health insurance costs. Today, due to rising costs, the company covers 75 percent. Klug-Jabas says she feels an ethical obligation to provide employees with as much coverage as possible. 

Robert Buss, senior manager of employee benefits services for Wipfli, says that providing health insurance is more of a struggle for smaller employers. He sees one large benefit that could come from the AHCA.

“The good thing here is getting rid of some of the administration,” he says. “It’s just a burden on the employers.”

While the AHCA would largely affect small businesses and individuals, Barb Kieffer, director of compensation and benefits for Fox Valley Technical College, says FVTC still faces challenges.

“A challenge always is cost, and along with cost, it’s maintaining a level of benefits that we can attract and retain employees,” says Kieffer, whose college has found success offering employees a high-deductible plan.

Regardless of the outcome of the AHCA, Coreen Dicus-Johnson, president and CEO of Network Health, says her organization is ready. She acknowledges the uncertainty, but says her company is ready with a plan A, B and C.

One of those that could help smaller employers is Network’s Assure, a level-funded plan that Dicus-Johnson says allows employers to pay a fixed amount and only pay for health care employees actually use.

“We’ll be able to meet and exceed the expectations of the employers that count on us,” she says. “We feel very confident that we can pivot with the changes that occur.”