Applied Strategy – Current Event – State Powered Insurance
Plans
Authors: LEVEY, NOAM N. Noam.levey@latimes.com
Source: Health Affairs; Apr2012, Vol. 31 Issue 4, p663-666,
4p
Database: Business Source Complete
This article covers the new healthcare reform that is to be
established in 2014. The main topic discusses how the federal government has
decided to shift responsibility of determining healthcare plans to the state.
Previously, many people were eased with the idea of the federal government
taking charge and creating standards for healthcare that would be the same
across the country. This would make consumers know that they are not being
taken advantage of with the federal government enforcing regulations to promote
fair affordable healthcare for all. With the shift of responsibility, each
individual state will be allowed to tailor healthcare plans to their liking. A
decision that was announced by Kathleen Sebelius, health and human services
secretary, argues that this will give states the “flexibility as they
administer the massive coverage expansion”. Those against the change argue that
states will design plans that mirror private health insurance coverage and thus
will not ultimately be the governmental takeover in which they previously
wanted.
This topic is important because the standards that are ultimately
chosen will be the ones in which employers must abide by. It is unknown as to
how each state is going to proceed with insurance plans and how it will affect
costs. Employers at this time pay about 70% of their employees’ healthcare
cost. Currently everyone is involved in this shift in responsibility. Employers
will have to meet state standard coverage and individuals will have to purchase
private healthcare on their own.
With this new decision states are required to make
“benchmark” plans for the essential healthcare package. Those states that are
not able to create one will default to the largest small-group plan in that
state. Some states that are against the change have stopped all work on
creating plans in hopes that the decision will be overturned. Small businesses
of 50 or more employees must provide healthcare or pay a fine of $750 a year
per full-time employee.
The implications of the outcomes will affect overall costs
for companies providing healthcare benefits to their employees. One good thing
to point out for small businesses is that those who “pay more than 50% of
employees' health benefits, have fewer than 26 employees, and pay average annual
wages of less than $50,000 can claim a tax credit of up to 35% of the cost of
premiums from the 2010 tax year through the 2013 tax year.” If the decision is
overturned back to the federal government costs might stay down and if the
state takes over and implements coverage plans that are unreasonable cost might
rise. For practicing managers it is best to stay up to date with all changes
related to the healthcare reform. A manager must forecast expenses and employee
benefits accounts for a large portion for costs in some businesses. They need
to have an idea of what to expect so that they can make any adjustments needed
to ensure the company can still operate.
This new healthcare law is confusing to me. I think that many of the points it covers are good for the average person. It is good that small business employers are offered a tax credit to cover thier employees. I have a relative that has a small business, and this credit is food for their business.
ReplyDeleteThe Insurance exchange is also good, it allows small business to enter into a co-op agreement with other like businesses to buy affordable healthcar for their employees.
I think that states should be allowed to design thier plans around the needs of their state, but they should be made to adhere federal mandated guidelines.
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ReplyDeleteThe new healthcare bill is completely confusing for the average consumer, or even the average politician, to read and comprehend. I honestly believe we can do better than giving small businesses tax credits for adopting their own plan. These politicians in the white house are missing the point here, we need to create jobs first and pay down our debt before adopting one of the most expensive expansions of government in history. Inflation has increased at astronomical rates over the past ten years and the government fails to point out this basic function of economics. If we do not repeal this before it comes into place, then prices will increase for private insurance companies and families will be hurt even more than they are now in this current economic state.
ReplyDeleteyes, the healthreform is very confusing. i have insurance through blue cros blue shield that was purchased before healthreform act. i called on it to upgrade to healthreform and it ends up being that yes it is true that there are more benefits but they charge more money. in the long run, insurance companies are here to make more money. i have argued with my insurance company to reduce premiums but that is a lost cause.
ReplyDeleteI dont think that it is fair to the consumer to have each individual state dictate how the Reform will be utilized in their state. First off it is confusing enough for us just to determine how this is going to work, but to add the responsibility of knowing who is going to do what in each state is just to much. Then it makes me wonder, will some states have influxes of people moving to their state because of better healthcare privileges? That happens with the job market and people target certain areas because of the school system. Healthcare is right up there with those two items. Paying for healthcare can definately determine how a person's cost of living will be.
ReplyDeleteThis whole scenario scares me because will my employer paid healthcare expenses increase to a point where it affects my take home pay largely. I don't mind small shifts in the amount that I have to pay if it will benefit individuals that don't have coverage and help them to acquire it. But I don't want to have to cut down on my way of life because of healthcare costs. It is already pretty expensive just to cover your dependants.
I agree with everyone that the new healthcare reform is very confusing. Especially with the federal government deciding to move the responsibility to the states. The whole idea is to make healthcare uniform all over so that it is fair to everyone. I hope that we as a people and our government will be able to find a system that can work for everyone sooner than later.
ReplyDeleteI too am very confused with all this health care stuff. I am very nervous for the future and to see what is going to happen with health care. I believe there are going to be lots of rough patches through the process and have prepared myself that it is going to take time to get things straightened out. We just need to be fortunate that we are able to go to college and put ourselves in a better situation to afford healthcare.
ReplyDeleteI can't say that I completely understand the new health care reform either. I think that our government should look into to ways to pay off our nations debt and create more jobs first. Im not saying that our health care system couldn't use some work but i just think that there are more important things that this country's leaders should be focused on. The new reform seems to cost everyone a pretty penny and I have a hard time justifying spending money on that without first fixing other issues that we as Americans deal with daily.
ReplyDeleteTo say that this stuff is confusing is like saying niagra falls is a waterfall.... All this talk about healthcare lately has everyone up in arms about it. Personally...I have health insurance that is incredibly high priced and provides almost no coverage until a large deductable is met. I also work at a job with a total of 4 employees with only 1 being full time. That being said, I dont think my job would be affected much but saying that the state gets to decide is kinda scary and inpsiring at the same time. Texas is a great state, but it all comes down to who is in office at that one time and who decides what laws for the state. Have the right people in there and it could be great, but the wrong people.... you get the idea. It seems like to me tho that if all that happens is they pay a $750 fine each year.... the cost of insurance is probably more then that so it almost seems like paying the fine would be the cheap way out. I know my insurance is way more then that a year.
ReplyDelete