Astonishment and apprehension ”“ that”™s how many Connecticut employers, insurance carriers and providers are reacting to the onset of federal health care reforms.
While the deadline for most of the Patient Protection and Affordable Care Act is 2014, directions on how to get there are incomplete, confusing and ever-changing. And, by the way, there are stiff penalties for not complying.
At CBIA”™s recent Healthcare Update Conference in Cromwell, several professionals talked about the reforms. Speakers were Mickey Herbert, a member of the board of directors of Connecticut”™s new health care exchange; Michelle Zettergren, senior vice president, chief sales and marketing officer for ConnectiCare; and Stephen Frayne, senior vice president, Connecticut Hospital Association. Jill Bergman, assistant vice president, Cohn Benefits Consultants, reviewed the timeline for reform.
Herbert said Connecticut is actually ahead of most states in setting up one of the first landmarks of health care reform. By 2014, each state has to create a health insurance exchange through which individuals and small businesses may shop for affordable, quality coverage ”“ and Connecticut already has a board of directors and some federal funding.
While national politics ”“ the 2012 election ”“ and a probable Supreme Court decision next summer ”“ on states”™ court challenges ”“ could change what ultimately happens to reform, said Herbert, Connecticut is going ahead to meet what it knows to be guidelines and deadlines for the exchange.
Still, in a refrain repeated by the other conference speakers, Herbert said the federal government is far from issuing regulations on how to make the exchange work. Yet, “If we don”™t move ahead,” said Herbert, “the federal government will come in and administer its own exchange.”
Berman described a dizzying array of new reporting requirements facing Connecticut”™s employers, health care providers and insurance carriers.
One of the biggest, said Berman, is the Uniform Summary of Benefits and Coverage that insurance carriers will have to provide to plan participants by the end of March 2012.
Intended to give employees a clear picture of what their health plan is providing, the summary will put carriers through many regulatory hoops just to produce the documents ”“ from strict deadlines to precise printing requirements.
In addition, and among other things in the next couple of years, employers will have to:
- Report to the U.S. Department of Health and Human Services on their wellness initiatives. There”™s no guidance on the report yet, said Bergman, but the feds have determined penalties for noncompliance.
- Report to their employees about the state”™s new health insurance exchange, where workers may choose to shop for coverage.
- Pay new withholding taxes for employees over certain wage levels ($200,000 for individuals).
- Offer their full-time employees “affordable” health insurance coverage or be subject to a new penalty, when the individual mandate becomes effective in 2014. What defines “full-time,” “affordable” and all of the other nuances of how this mandate would work are still unknown, said Bergman.
ConnectiCare”™s Zettergren said carriers are also facing new regulations on “medical loss ratios,” that is, being able to prove they are paying out 80 percent to 85 percent of premium revenue on direct care and activities that improve the health of their members ”“ such as disease management and promoting health and wellness.
If they don”™t hit the required level, carriers will have to issue rebates to employers and employees. Again, the regulatory rules are complex “and they can change at any time,” said Zettergren.
And the “one-size-fits-all” approach to the summary is simplistic, said Zettergren. All in all, she said, it”™s “an administrative nightmare.”
Today, hospitals”™ operating margin in Connecticut is 25 percent lower than other New England states and about 40 percent lower than the national average. This means Connecticut hospitals are doing a delicate balancing act of providing services and staying afloat fiscally.
If the economy improves and the reforms work, then a good balance can be maintained. But if reforms and the economy move even more people into subsidized programs, hospitals will be put between the proverbial rock and a hard place.
All in all, dealing with the realities of impending federal health care reform “is like tiptoeing in a minefield,” said Herbert. It has to be done, but there”™s a lot of healthy fear and trembling.
Dave Conrad is a senior writer at the Connecticut Business & Industry Association. Reach him at dave.conrad@cbia.com.
