Reactions mixed on health care reform ruling

On June 28, the Supreme Court upheld the individual mandate – the requirement that Americans obtain health insurance or face a penalty, and a pillar of President Barack Obama’s health care reform – by a 5-4 vote.

Since the decision, many business owners and others in the Ozarks have scrambled to understand what the ruling, which reinforces sweeping health reforms passed in March 2010, means for them.

While the court ruled that the individual mandate was constitutional, the justices said the federal government could not punish states that don’t agree to expand Medicaid eligibility for adults to 133 percent of the poverty line –  $29,327 for a family of four, according to the U.S. Department of Health and Human Services.

Sen. Roy Blunt, R-Mo., attended a July 2 tour of Mercy Hospital Springfield and said he would support efforts to repeal the reforms enacted under the Patient Protection and Affordable Care Act.

Reforms – which are estimated to cost $940 billion through 2019, according to the Congressional Budget Office – are being funded by taxes such as an excise tax on tanning services, a Medicare surtax on workers with wages in excess of $200,000 for individuals and more than $250,000 for married couples beginning in 2013, and a 40 percent excise tax on “Cadillac” health plans starting in 2018.

“For several months, I’ve been saying there are really three questions to be answered with the president’s health care plan: One, is it constitutional? Two, can we afford it? and three, is it a good idea? If the answer to any of these was ‘no,’ then we shouldn’t do it,” Blunt said. “The court apparently decided it was constitutional on some pretty interesting grounds, but it decided only one of the three questions. … My view is, it is not a good idea, and we can’t afford it.”

Sen. Claire McCaskill, D-Mo., visited the new Greene County Democratic headquarters at 1771 S. Grant Ave. on July 3 and said she was pleased with the Supreme Court decision.

“Now, it’s time for people to stop listening to what they’re hearing, and get the facts. The facts are that it is not a government program – it’s all private insurance. You can keep your own insurance, and there will be a place you can go to get affordable insurance,” McCaskill said. “Now, we’re getting more people in the pool, so that health care is less expensive.”

By 2014, states are required to set up health care exchanges for businesses and individuals to have a place to go to purchase insurance or find information about coverage. The federal government will run exchanges in states that fail to set them up.

Scott Holste, spokesman for Gov. Jay Nixon, said the governor has yet to determine whether Missouri would expand Medicaid coverage or set up a health care exchange.

According to a May 2012 report from the Urban Institute for the Kaiser Family Foundation, Missouri’s Medicaid rolls would grow nearly 46 percent to more than 500,000 through expansion, which would cost the state roughly $431 million.

Business impact
Mark Rushefsky, a political science professor with Missouri State University, said the Supreme Court ruling offers little change that could impact area businesses, and costs to cover employees may still be an issue for many.

“The business stuff, from a public policy standpoint, is about trying to cover people, and is not so much about controlling costs,” Rushefsky said.

The health reform act encourages employers to provide health care coverage through subsidies and the threat of fines if they fail to do so, Rushefsky explained. Subsidies are already available under the reform law, but penalties won’t begin until 2014, according to the nonprofit, nonpartisan Kaiser Family Foundation.  

Some companies that have fewer than 25 full-time employees and cover at least 50 percent of the cost for health insurance coverage on each worker and can receive a tax credit up to 35 percent of their total costs through 2013, according to the Internal Revenue Service. The credit goes up to 50 percent in 2014. Charitable organizations can receive up to 20 percent through the end of next year, and up to 35 percent beginning in 2014. Employers that pay an average wage of more than $25,000 are not eligible for the incentives, however.

According to the foundation’s Web site, KFF.org, those with 50 or fewer employees are exempt from penalties, while those with 51 full-time workers or more will be fined $2,000 per employee – excluding the first 30 employees – for not providing coverage to those who put in more than 30 hours per week. Employers are not penalized for not covering part-time workers.

Shawn Mayr, a group benefits consultant for Hollister-based commercial insurance broker Connell Insurance, said one unintended consequence of the reforms may be that companies that employ nearly 50 full-time employees may think twice about hiring more workers.

“It could actually discourage employers from expanding,” Mayr said.

Mark Burgess, co-owner of the Aviary Café and Creperie LLC and owner of private airline Ozair, said he is ideologically opposed to the individual mandate.

“It doesn’t bode well with me. I’ve never liked the government telling me what I have to do,” said Burgess, who pays all health insurance premiums for salaried restaurant staff and key airline employees. He said Ozair employs eight full-time workers and the Aviary has about 20.  

Both companies pay for individual plans because Burgess said they’re each too small to make group plans cost-effective. In all, he said he spends around $1,500 per month on five individuals who have signed up for coverage. He said he has a couple more that he wants to insure, but due to pre-existing conditions – which will be eliminated under reform – finding a carrier who will issue an individual policy for less than $500 has proved problematic.

“I’ve been fighting with this for three months,” Burgess said, noting that he remains unclear on how his business will be impacted by the rules of reform.

Burgess isn’t alone in that confusion. Mayr said Connell has received a handful of calls in the week since the Supreme Court decision from commercial clients who want to know how they might be impacted.

Looking ahead
This August, an estimated $1.3 billion in rebates will be available to insurance customers from companies with high administrative costs, which are regulated as part of health reform. Mayr said he believes companies will be responsible for distributing those rebates to its employees, which could be complicated in cases where employees have left firms receiving rebates.

Laurie Duff, vice president of corporate communications for CoxHealth, said the health system supports efforts to increase access to care, such as the expansion of Medicaid in Missouri, adding that quality controls are part of the reforms.

“For the working poor – those who many times make too much to qualify for Medicaid, but still can’t afford private insurance – this could benefit them.”

Duff said CoxHealth has been preparing for an expected increase in demand for its nonemergency services as aspects of the reform law take hold. CoxHealth has continued its outreach through its Wal-Mart retail clinics, focused on training nurse practitioners at Cox College, and begun talks with the University of Missouri to support medical student rotations in Springfield.  

Jordan Valley Community Health Center CEO Brooks Miller said the health care provider has benefited from the president’s health care reform, pointing to a September groundbreaking on a 40,000-square-foot expansion of its Benton Avenue facility, which is being made possible with the help of $8 million in federal funding coming through the health reform act.

Miller said access to care is critical in his line of work, but philosophically, he’s torn when it comes to the individual mandate.

“It goes back to this fundamental question: Is health care a right for everyone?” Miller said. He said he believes all children should be covered, but he doesn’t think the U.S. can afford covering children on Medicaid all the way until they’re old enough for Medicare.

“If you say, ‘Everybody has to have health care,’ but only half the people have to pay for it, I don’t think that’s fair,” he said.