The Patient Protection and Affordable Care Act (PPACA) signed into law last March focuses on reforming health care in the USA and bringing own the number of uninsured persons in the US by 32 million. Though this leaves 23 million still uninsured, it is still significantly reducing the huge numbers of uninsured individuals in the country.
While the law requires most of the residents of the US to get their health insured, it also creates state health insurance exchanges to help lower income individuals to get government subsidies to do so. These exchanges provide customizable insurance plans for individuals to make better choices according to their needs. The exchanges are directed to offer insurance plans from multi-state, non-profit entities. It lays down a whole lot of incentive-penalty equations, followed by clarifications and corrections, making it even more difficult for many – whether individuals, employers or industry sectors, seeking clarity on how the law affects them.
We now have the Supreme Court petitioned by some groups, and certain states such as Florida and 25 others, to question and block the implementation of the PPACA. They question the Act’s right to impose the individual essential coverage provision as unconstitutional, along with threats to take away funding. The administration holds that the imposition of coverage on individuals is perfectly legal to avoid the costs shifting to the inevitable expenditure on health care to the uninsured – or “healthcare free riders”. Though the petitioners equate such imposition on purchasing health coverage with an imposition on buying broccoli; and that the act seems to be strengthening the bottom lines of private companies in the insurance sector – it has to be accepted that people will require healthcare, whether insured or not! It’s very difficult at this juncture to predict the way the industry would move but the act is bound to improve the numbers of non-elderly persons with health coverage.
If you are an employer, you may need to stay tuned to the developments and figure out the possible effect on your business. The tenets are not immediate in all cases and there is a possibility that certain businesses may find paying the penalty a more cost-effective option than buying the insurance coverage. Healthcare may stop being a necessary part of the pre-employment negotiations or a benefit which was a dependable tool to ensure employee loyalty! The Act is going to have a huge impact on staffing models, workforce structure, benefits planning and human capital strategy as well as the tried and tested industry-standards adopted by one and all to stay in the game. It is essential to retain status quo and make not material changes to existing plans if they are close to the package’s requirement to gain grandfathered status until further guidance is released.
Most employers are working out the cost impact of using full time workers who clock an average of 30 hours per week against the option of using more contingent workers under the provisions of the act.
At this stage, it is undeniable that the healthcare industry would come under greater pressure in the face of ever increasing shortages faced in having qualified physicians, doctors and nurses. The act would also require enormous IT talent to manage health records, disburse incentives and take action and penalize those who failed to adapt to the tenets of the law. The millions of retail industry workers pose a challenge to the businesses in choosing between providing health care as a benefit or passing it on.
To quote Alexander Graham Bell – before anything else, preparation is the key to success – and it’s time we put on our thinking caps and got down to the business of preparing for the different ways the PPACA changes the game in its current form while we follow the developments too.
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