Gnostam Consulting, [http://www.gnostamconsulting.com] a Seattle WA, based management consulting firm that specializes in developing effective strategies for businesses wishing to substantially improve productivity and financial results through internet based solutions, has just released a comprehensive study on the financial impact of Healthcare reform on different sized businesses. The methodology used for this study, was to review the literature, and also to undertake a survey of the business needs of small, medium and large sized businesses when it comes to managing their employees healthcare costs.
The results of this Gnostam Consulting study include the review of an extensive employer survey which Gnostam Consulting has conducted. The survey highlighted the differences that large employers and smaller employers face in terms of understanding the impact of the Affordable Healthcare Act ["ACA'] on American businesses from 2014.
The survey findings reflect substantial confusion in the employer's understanding of the financial impact of the ACA. Notwithstanding the plethora of Governmental projections and statistics, it is hard to understand the impact of this Government data as well the complexity of the Health Care Reform implementation process in 2013-14. Many of the financial impact models employed both by the government and think tanks are based either on static models, or they make basic assumptions about the costs they are supposedly going to control, in order to show the adverse or favorable financial impact on the federal deficit. The March 2010 Congressional Budget Office predictions are based on the conclusion that more Americans will be covered in employer-sponsored plans [ESP's]
The actual trend of ESP's since 2000 shows a decline, a trend that has accelerated following the great recession of 2008 and the consequent very slow recovery in employment and business activity. Today, even though there are 22 million more Americans under age 65 compared to 2000, nearly 14 million fewer of those Americans obtain coverage through employers. Had the percentage of Americans covered through their employers remained unchanged from 2000, almost 29 million more Americans would have had coverage through their employer in 2010.
It is reasonable to ask the following questions:
“Will these trends in employer-sponsored coverage continue in the face of a huge change in the rules for ESP's?
Will the trends in ESP coverage be reversed in the next few years once the ‘pay or play’ mandate takes effect – returning to 2000 levels where two-thirds of the non-elderly population obtained coverage through an employer-sponsored plan?”
The uncertainty surrounding the answers to these questions raise a challenge for employers who want to maintain coverage.
Another factor is that many employers with fewer than 100 employees may find that their employees take advantage of taxpayer-subsidized coverage through state-based exchanges and curtail their employer-sponsored coverage offerings. There may be many employees in small sized businesses who may find it advantageous to migrate to larger-employer plans by virtue of being spouses or dependents. In essence the ACA is a highly complex piece of legislation and it is one which will require a great deal of thought to implement properly within the 2013-2014 deadlines.
The major innovation in the ACA are the Health Exchanges. Given that the prices for services in the exchange-based settings are expected to be carefully monitored by regulators, the cost of employer-sponsored coverage may increase from a new round of cost shifting, between employers, employees, insurer's, government sponsored plans and may not actually constrain health-care providers from raising costs at the current unsustainable rate.
Gnostam consulting http://www.gnostamconsulting.com is working with employers in the Pacific North West to identify cost effective solutions that will provide better healthcare. Gnostam believes that the best way to deal with the uncertainty surrounding the implementation of the ACA, is to create financial models of the plans and introduce these for employers so they can assess the impact of various alternatives, while engaging and educating their staff as to the merits of different alternatives.
Please visit Gnostam Consulting's website on http://www.gnostamconsulting.com for more details, or call Philip Corsano on 206 384 0069.