Rural areas look hard at implications of healthcare law
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WASHINGTON, July 3, 2012 -While the Supreme Court deemed virtually all of the Patient Protection and Affordable Care Act (PPACA) constitutional last week, Republican leaders are still calling for full repeal and critics are questioning the legitimacy of issuing the “individual mandate” as a congressional tax. In the meantime, agricultural and rural organizations are sorting out what the law's provisions will mean for families, individuals and employers.
The high court rejected that portion of the law that would cut off Medicaid funding for those states that do not comply with the expanded eligibility requirements set by the measure for the medical assistance program.
“The major impact on the states from this ruling is that states now have more flexibility with their Medicaid programs,” said William Pound, executive director of National Conference of State Legislatures (NCSL). “While the court didn't draw a line, they did rule that the bill's original ‘all-or-nothing' Medicaid funding scheme was unconstitutional. It will be interesting to watch in the years ahead whether other federal programs that tie state implementation with large funding grants will be deemed unconstitutionally coercive.”"
The Medicaid decision means “we will see variability across the country,” said Keith Mueller director of The Center for Rural Health Policy Analysis at the Rural Policy Research Institute (RUPRI), a Columbia, Mo.-based think tank. He noted that seven states already expanded the program to all adults, but some are now vowing to not complete any expansion.
After the Supreme Court's announcement of the Florida v. the United States Department of Health and Human Services ruling, House Republican leaders scheduled a vote to repeal the law on July 11. House Budget Committee Paul Ryan, R-Wisc., said he is “committed to advancing reforms that realign incentives so that individuals and their doctors - not government bureaucrats or insurance company bureaucrats - are the nucleus of our health care system.”
Mueller said he expects “a lot of noise” in the coming months regarding the healthcare act and the calls for its repeal. He noted that for a full repeal to be possible, it would require “at minimum” a Republican majority in the House and Senate, as well as GOP control in the White House.
“The most important thing with the court decision is that it is done and the law is moving forward,” Mueller said, noting that the law includes many provisions that need to be addressed that will change the dynamics of delivery and funding. “They're moving fast. For rural America, those are really important changes.”
American Farm Bureau Federation (AFBF) President Bob Stallman claimed the plan will “impose a new financial burden on our members.”
“We remain concerned that mandating individuals and businesses to buy insurance will impose an expense that creates economic hardship, particularly for self-employed individuals and small businesses,” Stallman said in his statement reacting to the Supreme Court's decision.
AFBF Chief Economist Bob Young said his primary concern surrounds the fact that most producers are self-employed and buy their own insurance plan instead of purchasing through an employer.
“Part of the challenge is there's still a lot we don't know,” Young said. “I think part of this is the way the tax provisions are provided. If I go out and buy my own insurance, I'm subject to a different set of taxes. I'm going to pay more for my health care costs, plus the different tax treatment, than someone who gets it through their employer.”
“Recognizing that most farmers are self-employed, it doesn't seem right to us,” he said, noting that a great majority of the producers Farm Bureau represents are self-employed.
However, Mueller claimed that some provisions, if implemented as intended, should benefit rural residents and help solve access problems to affordable care. Rural residents would seemingly benefit “from a change in insurance marketplace,” and from the prohibition on refusing care due to pre-existing conditions.
Also, Mueller said, programs in the law that create systems of care, instead of just one healthcare provider, “mean using the healthcare workforce more effectively.” He said this type of system should create proper care for chronic conditions so people are not hospitalized when they don't need to be, they make fewer visits and do more on their own to take care of themselves.
Although some of the potential benefits of the law are understood, the Western Growers Association is concerned with the lack of attention the law's provisions pay to the agriculture industry model.
“The law is written for people who work in offices from 8 to 5; it wasn't written for agriculture with seasonal employees and so many undocumented workers,” said Western Growers Association President Tom Nassif, who noted that an estimated 75 percent of field workers are falsely documented.
“Our mission going forth will be to work with federal regulators to acknowledge the unique needs of ag employers and workers, including those improperly documented individuals for whom the ACA has no provisions,” Nassif in a public statement last week.
Noting that “our work has just begun again,” Nassif said “mini-med plans” administered through Western Growers Assurance Trust will be discontinued after 2014 under the law. Western Growers provides employee health benefit plans to its members through the trust, which is a multiple employer welfare arrangement. The “mini-med plans” continue to exist due to a waiver that remains effective until 2014, after which all health benefits must comply with the ACA's reforms.
Without the ability to provide these plans, which have annual limits with less $250,000 in coverage, undocumented workers unable to purchase subsidized health insurance within the new exchange will resort to emergency room care. Nassif said taxpayers then cover the costs, and “without immigration reform, health care reform neglects this population.”
As of January 1, 2014, all U.S. citizens are required by law to either purchase qualified health insurance deemed so by the federal government or be covered under a government-sponsored program. If an individual chooses not to participate in either option, a “tax penalty” of $95.00 or 1% of income, whichever is greater, will be imposed. By 2016, however, the penalty stands to increase to $695.00 for an uninsured adult up to $2,085.00 per household, or 2.5% of income, whichever is more. Aside from the personal tax penalty, there could also be business penalties.
The GOP Congressional Health Care Caucus, which is examining the impact of the law on businesses, says that by 2014, the law will require all small businesses with 50 or more full-time employees or full-time equivalents (FTEs) to begin offering health care coverage.
If not, the employer is subject to penalties for either not providing any health insurance to their employees or not providing affordable enough coverage. The penalty for businesses that do not offer coverage, but have employees who have received a premium tax credit or cost sharing subsidy in an exchange, is $2,000.00 annually times the number of full time employees minus 30. That penalty increases each year by the growth in insurance premiums.
Also, employers that do not offer affordable coverage will pay a $3,000.00 annual penalty for each full time employee receiving a tax credit, or up to a maximum of $2,000.00 times the number of full time employees, minus 30, whichever is greater. The penalty for the underinsured employer is increased similarly to the employers who do not offer any coverage at all by annual growth in insurance premiums.
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