Editor's Note: It's been three years since the Affordable Care Act was signed into law by President Obama. In a three-part series that began Sunday, the New Hampshire Union Leader takes stock of Obamacare in New Hampshire by looking at provisions of the law already in place, what lies ahead in 2014 and implications for the Granite State as the law takes full effect in the last five years of the decade, assuming efforts to have it repealed or defunded do not succeed.
PORTSMOUTH — Keith Decker, president of High Liner Food, sees only one outcome from Obamacare: higher cost to his organization and his employees for health insurance.
"This is a pictorial of all the things that are required," he said during a recent interview at the company's fish processing plant off Borthwick Avenue, holding up a flow chart diagraming the law's mandates and fees. "When I look at this, it's challenging."
Decker said the company is not changing any of its health insurance offerings to employees because of the Affordable Care Act, but is bracing for the cost, particularly two fees that take effect in 2014 — the ACA Insurer Fee and the ACA Reinsurance Fee.
The Insurer Fee is a tax on health insurance premiums that insurance companies are likely to pass along to their customers, raising between $8 billion and $14 billion nationally from 2014 to 2018 to help pay for premium subsidies to low-income individuals.
The Reinsurance Fee is a monthly assessment per member in each health plan designed to fund an insurance pool for high-risk cases during a transition period ending in 2016.
Anthem Blue Cross and Blue Shield in New Hampshire notified its agents that, effective Jan. 1, 2014, the impact on costs would be 2.46 percent of the premium for the Insurer Fee and $6.35 per participant per month for the Reinsurance Fee. For High Liner, with 190 employees in Portsmouth and another 500 nationally, that's a big hit.
"The insurer and reinsurance fees that go into effect next year are going to cost the company a quarter of a million dollars," Decker said. "And our employees will inherit their share of that through the portion of the health insurance they pay for."
The company has some tough choices of its own. "We have to figure out how to pay for those costs out of our P&L (profit and loss), either by cutting costs, raising prices or some combination therein."
The fees that have Decker concerned are among the major provisions of Obamacare that take effect in 2014 — often cited as the make-or-break year for the legislation that will define the Obama presidency.
Although the law is being phased in through 2020, the key components kick in next year — including the individual mandate to purchase health insurance that was the focus of an unsuccessful Supreme Court challenge. Individuals who are not covered by an approved insurance policy will face an annual penalty of $95 or up to 1 percent of income, whichever is greater, in 2014. The flat dollar amount per individual rises to $325 in 2015 and $695 in 2016.
While the Supreme Court did not reject the individual mandate, calling it a tax, the high court did overrule mandatory expansion of Medicaid — another linchpin of Obamacare scheduled to launch in 2014. States get to decide, and they are taking their time.
As of July 1, according to the Kaiser Family Foundation, 24 states were moving forward with plans to increase eligibility for Medicaid to 138 percent of the federal poverty line; 21 are not expanding Medicaid, at least not now; and debate is ongoing in six states, including New Hampshire, where a special commission has been taking testimony on the issue.
Other key provisions of Obamacare taking effect on Jan. 1, 2014, include:
• A prohibition on insurers discriminating against or charging higher rates for any individual based on pre-existing medical conditions or gender.
• A prohibition on annual spending caps for essential health benefits in qualified plans.
• The beginning of coverage for policies purchased on health insurance exchanges or online marketplaces, with premium subsides for those with a household income between 133 percent and 400 percent of the poverty level.
• The first year of tax credits for qualified small businesses, which will continue in 2015. To receive the full benefit of a 50 percent premium subsidy, the small business must have an average payroll of no more than $50,000 per full-time employee and have no more than 25 full-timers.
An essential break
The tax credits for small businesses are essential in a plan that relies so heavily on the country's employers for funding, according to Lisa Kaplan Howe, policy director at New Hampshire Voices for Health.
"The tax credits are available to small businesses because small businesses face the biggest challenge," she said. "The vast majority of large businesses already provide health insurance, and the delay of the employer responsibility provision until 2015 is not expected to affect that coverage because 95 percent of the large employers that would be subject to the requirement already offer health insurance, and they offer it without any requirement to do so."
If the employer mandate takes effect in 2015, companies with more than 50 full-time employees will have to offer health insurance or face a fine of $2,000 per employee, with full-time defined as 30 hours per week.
It's no accident that Obamacare relies so heavily on employer funding, since the nation's health insurance system has been employer-based for decades.
"The idea behind the ACA was to build on the system we have, and whether people agree with it or not, that is an employer-based system," Howe said. "The idea was not to throw that out and start from scratch, but to build on that."
The ACA builds on employer-sponsored plans, but adds new elements of personal responsibility and choice, she said. The online exchanges are supposed to give employees options that did not previously exist, and make the individual a more active player in the health care and insurance marketplace.
"The online exchanges will take some of the pressure off small employers to find one plan that will work for all their employees, and gives them the opportunity to do what a lot of large employers do today, which is to offer a range of plans and say, 'Here's your menu; here's the amount of money I am going to contribute; you pick the plan.' "
Knowledge is power
The more consumers know about the cost of their health insurance and health services, the more competitive the market is likely to become, according to Bob Nash, president of the N.H. Association of Insurance Agents. "The cost has to be transparent to the end user," he said, "and it's not now. I think it's part of the culture for the insured to not pay attention."
Nash suggested that the individual mandate could be delayed as well, now that the employer mandate has been put off. "It's only a matter of time," he said, "but that's pure speculation."
That would be unfortunate, according to Howe, who said the responsibility to be insured is a building block upon which the law is based. For example, she said, insurance companies can't be expected to accept everyone with pre-existing conditions, if people can decide only to purchase insurance after they get sick.
"Not having health insurance doesn't mean that you don't need health insurance," she said. "Everyone at some point in their life needs health care, and if you don't have insurance to pay for it, that cost doesn't go away. It ultimately gets spread across the system, and those of us with insurance pay for it. That makes our insurance more expensive. So the idea is the system works best if everybody is in the system from day one."