It has now been nearly six years since the passage of the Affordable Care Act, or Obamacare, in 2010, encouraging me to revisit with my business colleagues in Rhode Island the effects of the new law to this point.
One thing is abundantly clear. The calamitous predictions of reform critics have definitely not come to pass. The law has not been the job killer of so many dire warnings. In fact job growth in the intervening period has been more robust and consistent than in any period in recent decades.
And costs that were certain to skyrocket have instead leveled off in terms of the rate of growth, a favorable trend, but admittedly not the reversal for which many were hoping.
Rather than millions losing their coverage, rolls of the uninsured have dropped precipitously.
Overall, I would argue the complex reform legislation seems to have been a success by almost any objective standard, yet it remains deeply unpopular among conservatives, and now even faces eroding support among some liberals who join Bernie Sanders’ call for a simpler and probably more efficient single-payer system.
Throughout all this the voice of the business community has been surprisingly muted, which brings me back to these pages to renew a discussion I think we should be having, because for most of us, employers and employees in the commercial insurance market, the problems of the pre-Obamacare period have not been resolved.
Rates are still increasing overall, and for many small groups remain quite volatile in spite of increasing costs shifted to employees in the form of ever-higher deductibles and copays.
Insurers tell us that premiums cannot come down until health care costs come down, and indeed there are sweeping initiatives underway on the provider side of the industry. But these fundamental structural changes, driven by payment reform, will take some time to show results.
In the meantime we stick stubbornly to the uniquely American business model of buying coverage individually for each employer group. This artificial fragmentation of the market drives up the actuarial risk of each small group, hence the cost of insurance. Variability inherent in small-group experience rating creates wild volatility in rates for some. It is clear that we need reform not only in health costs, but in the way we buy commercial coverage as well.
Perhaps not surprisingly, the major obstructionists in this area of reform have been the powerful insurance lobby and their allied brokers. They have fought reform of these markets, most notably the small-business programs of the state-run health insurance exchanges at every turn, even sometimes soliciting the unwitting help of the business community with their Chicken Little protestations of impending doom.
Now in fairness, the exchanges – including HealthSource RI here – have had their own share of technical challenges. But at least in Rhode Island, the innovation of the full employee choice option in the Small Business Health Options Program offering is a potentially stunning breakthrough.
SHOP allows companies with fewer than 50 employees to essentially set a defined contribution to the cost of the benefit for their workers, who then can shop for their own preferred coverage among the plans and carriers offered on the exchange. It is a potential game changer in moving personal responsibility over to individuals rather than the parental responsibility of their employer.
Yet when the program was due to expand to employers up to 100 employees in 2015, the insurance company/broker lobby launched a fanatical effort to delay it, which has been successful for now in our state.
As businesspeople, we need to put our pragmatic, problem-solver hats on in place of the politically ideological ones we often favor. It is in our best interest to purchase health coverage together through the exchange and empower our workers to exercise their leverage as real consumers.
We all know that employers large enough, and some even questionably large enough, choose to self-insure the health benefit. That is because the small-group market simply doesn’t work. It is dysfunctional, anti-competitive and needlessly costly, although it may be the last bastion of higher margins for the insurers. We simply can’t afford the luxury of the status quo. •
Ted Almon is chairman of the Claflin Co., chairman of HealthRIght and a member of the Expert Advisory Panel of HealthSource RI.
