Health Care Keeping Up With the Jones’s
The 2014 election has started. Just when we were happy that the 2012 election had passed, some people are talking about the 2014 and even the 2016 elections. The prediction here is that the major topic of the 2014 election will be regarding the Affordable Care Act.
The Act was not popular when it was passed in 2010. The congressional elections in November of that year reflected an unhappy electorate. The Senate and Congressional elections in 2014 could be effected by the same topic and result in the same outcomes. It all depends on how things go with Obamacare through the first several months of 2014
Major Provisions Effective Jan 1
Although the Affordable Care Act became the law of the land in March of 2010, the major provisions of the law will not be effective until Jan. 1, 2014. This date was selected because of the time it was going to take to set up the government run health insurance exchanges as well as do some amortization of how the Act was going to be funded.
Businesses are currently looking to see how they are individually being affected by the Act. Some that are slightly over the 50 employee threshold are thinking of reducing the workforce to not be subject to the mandate of legally having to provide insurance.
Some businesses are considering dropping the option of family coverage and only providing individual coverage. It is a way that they can save premium money on one group of workers if they are required to provide insurance coverage on more workers.
Even more businesses are looking at the economics of dropping all coverage and paying the penalty (tax). With this scheme, they would both pay the tax and give the employee raises to help them buy the insurance through the exchanges. Surprisingly this is a popular option even with employees. This is because the employee receives a raise and may elect to not procure insurance and wait till health problems appear and then buy insurance (Remember, pre-existing conditions are not considered when an insurance carrier provides a policy). The company likes the idea because even though they may ultimately have the same cash outlay in raises and IRS penalties, they get out of the insurance business. They no longer have to spend time and effort working on insurance matters for their employees.
As of Oct 1, 2013, the Health Care Exchanges are supposed to be established and working to get citizens signed up and ready for coverage on Jan. 1, 2014.
The first electorate hurdle will be whether the exchanges are in place and working on Oct 1. So far Health and Human Services (HHS) has been confidently saying they will be ready in time. I personally am a bit skeptical of this but then again I am not privy to the inner workings of that department.
I just know that they have some major tasks to complete in what will be a short time span. Having witnessed government work in the past, I believe my lack of confidence is founded in history. They will have to create an Internet presence to be able to capture information from the people. They will also have to build phone support lines as well as ways for those without Internet service or access to interact with the department. These people need to be recruited and trained on all the provisions that could affect them. This will be going on while provisions are still being written.
Contracts with the health care insurers need to be finalized. These contracts would allow the carriers to be represented on the exchanges. Given that a large influx of people are expected, even a small provision in a policy could have a large economic impact. In other words, the carriers will need to make sure their bottom line is covered before they commit to the exchanges.
Some states have opted out of the exchanges. The AC A mandated that states had to join or created the exchange in their state. For this the government would pay the implementation cost as well as provide coverage at 100% for free. However it would greatly increase the number of state citizens covered. After the first three years, the government would pay 90% but would still continue to provide oversight of the exchange.
However, the Supreme Court of the United States got involved. They ruled that the states did not have to create and manage the exchanges. It was up to each state to decide if they wanted to join forces with the United States Government. Many states have subsequently decided it better to not go into partnership with the federal government and continue to provide health services as they have in the past.
So How Does This Effect the Election
Things may go just fine with the implementation subsequent to the Jan 1 start date. If things do go well, most people won’t care too much from a political perspective. Some people will reward Democrats that voted for the bill in 2010 with enthusiastic votes in 2014. However, if things go even slightly wrong and a large group of people are adversely affected, those voters will be vocal.
In business there is something called the Jones Principle. As a reader, you probably have experienced this yourself. The principle is that if someone receives abnormally good service or is abnormally happy with a product, they will reward the owner with a couple recommendations. They will generally tell 6-8 friends about how much they liked the business. However, if the product was not good or the service was less than expected, that customer will tell 30-50 people about it.
You can believe that if the act does not get implemented correctly or if it has provisions that adversely affect a good number of the electorate, there will be political jobs that will change hands in 2014. There will be Senators and Congressmen that may feel the full wrath of a basic business principle.