| |
| |
| |
| Posted on: Friday, October 16, 2009 |
| |
Healthcare Reform – Senate Finance Committee Bill Passes
Employers of America…”Start your engines!” The Baucus bill is closer to becoming law. While its impact on providers, patients, States, the Rx and medical device industry, insurance companies, employers and all tax payers will be significant. employers will continue to be the preferred vehicle to cover the majority of Americans. However, there will be many more mandates, regulations, taxes and even greater cost shifting from the public to the private market. While the phase-in period ostensibly begins in 2013, higher costs are already being felt as healthcare and insurance companies interpret and begin to adapt to the legislative requirements.
No final bill or law has been passed, but here is a short list of perspective-setting observations employers should immediately consider in their future benefit planning process:
1. Federal and State regulation control of the practice of medicine and
health financing is already significant and will grow. Medicare and
Medicaid alone currently provide coverage for roughly 30% of Americans.
2. The new law along with its regulatory, judicial and congressional
“interpretations” will increase Federal government control exponentially
resulting in de facto Federal control of the practice and financing of
medicine.
3. Most of the new cost of the legislation will be paid by employers,
taxpayers and employees via cost shifting and explicit taxes, fees and
mandates. These factors will, in the future, push annual healthcare rate
increases beyond the current +8% to15% range. Ultimately, these results
will be reflected in higher product and service costs paid by consumers.
4. Individual and Small Group (1-50 employees) markets will be affected
first via underwriting mandates such as age, gender, pre-existing
conditions, portability, renewability, and plan design mandates. Provider
and insurer rate controls by the States and the Feds are likely.
5. Employers that do not provide qualified coverage will be taxed with
individuals being required to buy coverage in the private market. Lower
paid or unemployed individuals will be eligible for tax subsidies, which of
course, will be funded through taxes, fees or deficit spending.
6. Options available to employers and individuals when selecting health
Plans will be marketed as flexible and wide-ranging, when in fact,
eligibility, levels of coverage options and pricing will be tightly controlled.
7. Rationing of health care will be implicitly implemented via price controls,
i.e. setting provider reimbursements and the dictating of
"allowed/covered" services being subject to the approval of government-
directed medical outcome evaluation committees.
8. The Feds will pay lip service to State involvement in this process. If States
don’t tow the Federal line, Fed rules will supersede and/or States will
lose Federal funds.
9. National "non-profit" insurance pools will be encouraged via Federal
loans and grants to "compete" with the private, for-profit insurance
market. While the initial grants may be time limited, we predict they will
be extended with the non-profit pools becoming the "federal options."
Question: Now, what is an innovative employer to do in these already tough economic times? A This is a new Employee Benefits World, Let’s Master It strategy is the only one that makes strategic sense.
Answer: As a practical matter, you don’t have to win the checkered flag in this race, you just have to finish ahead of your competitors. Together, that can be done by doubling down on the essential risk management principles that we at Denman practice every day. To get started, click here: AWARDS
Should you have any additional employee benefit questions or would like to discuss this material in detail, please don’t hesitate to call the Denman Team. |
| |
 |
| |
| Information
on this site is for general information only. It does not constitute
nor should it be construed as legal, financial, health or any
other kind of professional advice. This site makes no claims,
promises or guarantees about the accuracy, completeness, or
adequacy of the information contained in or linked to this website. |
| |
| |
|
| |
| |
|
