By Bill Crawford
“Municipalities challenged by Affordable Care Act,” read the headline of a story about Obamacare provisions taking affect in 2014.
“There is a lot of uncertainty about what the impact is going to be,” said one insurer. “I can, at least, tell you the budgets aren’t going to go down because of it.”
It appears Obamacare’s impact on Mississippi’s state and local government health insurance costs will vary from minimal to severe.
One small municipality reports it faces a 43 per cent increase in premiums, while a large county reports it will have no increase for next year. The state’s self-insured plan could see a three or four per cent increase. (Unlike retirement, counties and municipalities are on their own. The state plan covers state agencies, schools, community colleges and universities.)
The potential for higher costs come from the new rules governing employer health insurance plans that take effect in January, 2014. Obamacare treats governmental entities just like any other employer.
While the requirement that employers with more than 50 workers provide health-care coverage or pay fines of $2,000 per employee has been delayed for a year, other requirements still apply.
The Mississippi Association of Supervisors published guidance on these changes for its members. The Mississippi Municipal Association plans to discuss the issue at its fall meeting.
Here are key changes affecting cost:
• Health plans must now provide “Essential Health Benefits,” which include: ambulatory patient services; emergency services; hospitalizations; maternity and newborn care; mental health and substance use services; prescription drugs; rehabilitative services and devices; laboratory services; preventative and wellness services; chronic disease management; pediatric services (including dental and vision care); and contraceptive services.
• Annual cost-sharing between the employer and the employee (out of pocket cost to employee) is limited to $6,350 for individuals and $11,900 for a family.
• No pre-existing exclusions allowed. Employer plans must issue and renew health insurance regardless of person’s status.
• Premium rating variations by insurers (based on age, geographic area, family composition and tobacco use) will be limited.
• Plan waiting periods for coverage are limited to no more than 90 days.
• Employers must pay fees of $63 and $1 per covered person in 2014. The $63 fee decreases in 2015 but the $1 charge doubles.
As a result of these and other changes, health insurance providers are raising rates to cover their increased exposure and the new fees.
The difference in impacts comes from the type of insurance plans and the preparation governments made in advance. The State and School Employees’ Health Insurance Management Board began preparing for the 2014 changes back in 2011.
Some counties and municipalities are just now finding out that the impact on their budgets will be significant.
Contact BILL CRAWFORD at email@example.com. He is a syndicated columnist from Meridian.