The following was written by former JEA President Scott Berryessa based on his experiences. I share this so you can see some of the benefits of the new Affordable Care Act.
THE AFFORDABLE
CARE ACT HAS MADE THE U.S HEALTHCARE SYSTEM STRONGER
All members of UEA and its affiliates are concerned with the
rise of health insurance premiums and the ramifications of the Affordable
HealthCare Act (ObamaCare.) No doubt you
have all heard many criticisms of this legislation as it has often been
demonized and politicized, but I think our members deserve some facts that are
separate from the partisan dialogue.
After serving on the Insurance Committee for ten years for
Jordan School District and most recently for the last two years as the public
education representative on the Board of Directors for P.E.H.P. (Public
Employees Health Plans) and The Utah Retirement System, I have been a keen
observer of the trends in health insurance.
I’d like to share some trends that you are not likely to hear in the
media that you ought to consider.
Hopefully you are each aware of the positive aspects of the
ACA as far as added coverage for children to age 26, covered wellness care, no
more lifetime caps on coverage and the fact that soon no one can be denied
coverage for pre-existing conditions. There are many more yet to come as they are
implemented. These are all welcome
benefits that may help every one of us --eventually. However, I’d like to share some data that you
may not be aware of, but should consider and embrace.
Much of the criticism of “ObamaCare” that is being spread is
that it does not do anything to contain or restrain the rising costs to cover
these new benefits, let alone previous ones.
Opponents of the act claim the ACA is driving up the costs of health
care. That is not true and here are some facts you need to know as you weigh
the healthcare act:
In 2010-11 the initial parts of the act began to be phased
in. Keep in mind it will take a few
more years before it is entirely implemented and that one of the biggest cost
savings aspects, the insurance exchanges, will not be put into effect until
2014.
I hope you all will remember that in the 10 years prior
to 2010, national healthcare expenses were rising year after year. In Utah many of our school districts
experienced double digit premium increases more often than not and this
necessitated that employees had to pay more each year for their share of their
health insurance and/or had to reduce important parts of your plans so they offered
less. For most of you, co-pays and
deductibles were also increased to spread more costs to you. As a member of the UEA Board and of my
districts negotiations team during this time I know that my district and
probably all of yours were forced to take less on the salary schedule to
supplant additional insurance increases.
This erosion of potential earnings will cost us dearly in our retirement
earnings.
Well, the good news is that nationally, insurance costs have
dropped to less than 4 percent per year in the last two years and this is also
reflected in Utah!! This is attributed
to the ACA and nationally has saved over $220 BILLION since 2010. Furthermore,
healthcare costs are projected to stay level in the near future at least
according to experts.
Between 2000 and 2009 the average family premium more than
doubled at an annual increase of 8.1%, but in the two years since, premiums
still rose-- but at a rate of 25% lower -- creating a savings of more than
$1200 per family. Some of the increase
the last two years is credited to the fact that many insurance companies raised
their premiums for profit taking before the part of the act took effect that
demands that now they MUST justify any new rate increase and prove it is necessary
directly to improve patient care. That
is another cost saving part of the ACA you don’t hear about. In fact, starting this month 13,000,000
Americans will be getting rebate checks back from their insurance companies if
their company/provider did not meet the standard of proving, through audits,
that they spent 80-85% of EVERY premium dollar for patient care directly. The rebates will average about $138 each for
a total of more than $1.1B that will be refunded this first year alone. This part of the law insures cost efficiency
from providers to meet that standard.
The largest companies and providers can only use 15% of every premium
dollar for marketing, equipment, buildings, CEO compensation and shareholder
dividends –(profit taking) etc. Prior to
the ACA the average spent on these things for most Insurance companies and
providers was nearly 30% or more according to many studies.
The law will provide even more relief in years to come,
including a tax cut averaging $4,000 for 18 million middle class Americans
unless the Republican congress repeals the ACA.
Another falsehood being spread is that the law is putting a
greater burden on small businesses. The facts show the opposite to be
true. Small business owners were
struggling in the health insurance market long before the law passed, spending
an average of 18% more than their larger competitors annually for employee
coverage and often seeing their bills skyrocket if even a single employee got
sick. The result of this was that many small companies dropped offering health
insurance to their workers. This was not because of the ACA but the conditions
that existed prior to 2020.
Since the law passed, the share of small businesses now
offering coverage has held steady and will start to rise with the
implementation of the insurance exchanges and, in part, due to new tax credits
in the law and according to the Kaiser Family Foundation, this will save
hundreds of thousands of small companies thousands of dollars each on their
insurance costs. When small businesses
and the self-employed have the choice of shopping for coverage in the new
health marketplaces, created by the states that establish market options
through the exchanges, this will be a boon to expand worker coverage according
to the Rand Corp.
A third common attack recycled about the ACA is that it cuts
Medicare benefits. In truth, Medicare is
stronger than ever now.
Thanks to the ACA (ObamaCare), seniors have new benefits
such as free preventive care as well as discounts on brand name medications in
the “doughnut hole” coverage gap and this has already saved more than 5 MILLION
seniors almost $600 each!! Plus,
Medicare Advantage premiums have fallen two years running. New crackdowns on fraud abuse contained in
the ACA have returned a record $5.4 BILLION to Medicare since 2010. In fact aspects of the healthcare law have
strengthened Medicare’s long term outlook, adding eight additional years to the
projected solvency of the Medicare Trust Fund. These are all important facts
especially to every educator that is concerned about the future costs of
insurance eating away at their retirement and disposable incomes.
No matter what your political leanings are, insurance costs
should matter to you and knowing the facts is critical. People are entitled to their own opinions but
not to their own facts. These facts and others that I didn’t mention make one
thing clear: Since the Affordable Care Act was passed, national health spending
and insurance premium rates are rising at a slower rate, health insurance
coverage is becoming more available and affordable to more Americans, small
business coverage is holding steady and soon will increase and Medicare is on a
stronger financial footing.
The legislation is not perfect but there has been no other
credible plan or cadre of ideas put forward so I’d hope we as citizens can
unite together to push our Congress to work to improve upon what we have.
Scott Berryessa
