Home health: Changes hit bottom line

Phil Melugin, president of Springfield-based Integrity Home Health Care, is hard-pressed to find a positive aspect of health care reform.

His biggest concern is expected cuts to Medicare-funded home health benefits, which he said could be a decrease of $40 billion.

“(For) our business, all the folks we serve, it’s a very significant cut,” Melugin said.

Financial ramifications also are inherent with increased poverty level guidelines – which will jump to 133 percent – giving more people access to Medicaid coverage, which is federally and state funded.

“The problem is the state is broke,” he said. “It should be a positive that more people are able to access the services, but we don’t know how the state is going to pay for it.”

Exacerbating the financial pressure, he said, are the employer penalties for companies that don’t offer coverage, effective Jan. 1, 2014.

“We have 2,400 employees, and the $2,000 penalty … is incredibly troublesome to us,” he said, even though his company currently offers health coverage.

Melugin said another concern is how his company will deal with the new voucher system.

Under rules set to go into effect in 2014, workers who qualify for affordability exemptions to individual policies but don’t qualify for available tax credits can take an employer contribution – 60 percent of the expense – to find coverage on an exchange.

Melugin estimated that half of his employees don’t participate in the company’s health insurance plan, and some are covered with their spouses, which makes it hard to gauge how much the changes will ultimately cost.

“It’s not going to be a win for us,” he said.[[In-content Ad]]