The Patient Protection and Affordable Care Act — perhaps better known as Obamacare— will make it imperative that employers crack down on the poor health choices of their employees, according to a Greater Reston Chamber of Commerce health care reform panel that addressed the issue on Nov. 16.
Themed “Health Care Reform: What Is Next and How It Will Impact Your Business,” the panel featured regional experts William Hazel, Virginia’s secretary of Health and Human Resources; Bridget Bean, administrator of the U.S. Small Business Administration; and Joanne Corte Grossi, an Obama administration-appointed regional director for the U.S. Department of Health and Human Services.
Hosted by WJLA senior political reporter Scott Thuman, the discussion delved into the nuts and bolts of how the act will affect local small businesses.
“Nothing will affect small businesses immediately, but in 2014 you will be required to provide insurance if you are a company with 50 or more employees,” Grossi said. For 2013, the law primarily only affects state governments, she added.
Hazel, a member of Virginia Gov. Robert F. McDonnell’s cabinet, spent much of his speaking time questioning where the money would come from for the law’s mandate on expanded coverage.
Starting in 2014, the legislation requires states to extend Medicaid eligibility to all non-elderly individuals with family incomes below 133 percent of the federal poverty level.
“Medicaid is currently 20 percent of our state budget,” Hazel said. “One in eight Virginians are already in Medicaid today. … We can’t meet the Medicaid demand today, so how can we possibly increase it?”
Grossi countered that the act’s initial expansion costs to states will be supplemented by the federal government, and that the act ultimately will enable many Virginians without coverage to be able to afford it.
“The first three years of Medicaid expansion is paid 100 percent by the federal government,” she said. “425,000 Virginians who don’t have coverage will then be able to have it. It is a moral imperative.”
“Unless health care ultimately costs less, paying less for your insurance means somebody else is paying more,” Hazel countered. “Currently, 18 percent of our GDP is spent on health care in the U.S. … There is nothing free in this.”
Grossi countered by stating: “There are 51 million uninsured Americans. That is the whole point of the Affordable Care Act. And by providing a larger pool of insured Americans, it will bend the cost curve.”
After an intervention by moderator Thuman, the subject then turned to the act’s specific impacts on local small businesses.
“Small businesses tend to pay 18 percent more for the same exact health care that large businesses get,” Bean said. “Small businesses are the engines of the economy, and whether we go off the fiscal cliff or not, federal budgets will shrink. That is the reality. Small businesses need to be ready to tighten their belts.”
Bean said that costs of the health care act to small businesses can be countered by employers taking certain actions to ensure their employees stay healthy.
“Everything is predicated on how many employees you have in the Affordable Care Act and how much they are costing you,” she said. “Obesity, for example, leads to many chronic health-care issues such as diabetes, that as an employer you will be paying for forever. Prevention is key.”
Grossi added that under the act, federal “worksite wellness” grants are available for employers who show a proactive model for keeping employees healthy. “There is generally a $3.20 return on every dollar invested in these plans,” she said. “And there is no need to reinvent the wheel. Companies like Johnson & Johnson and Caterpillar have paved the way and are happy to share info about their wellness plans.”
Bean added that companies can do many things to keep employees healthier.
“Offer free gym memberships, map out a walkable path near the location of your office for employees to use. Even just watching what you put in your vending machines can have an impact.”
According to Grossi, obesity and smoking alone account for more than $300 billion a year in U.S. health-care costs, and are the numbers one and two most preventable causes of death.
“With this act, we are really trying to make true systematic change to the system,” she said. “But we all need to pitch in and look at accountability to make it work.”