Getting Ready for the Affordable Care Act
Understanding the ways in which the Affordable Care Act (ACA)will affect small organizations and change the shape of the health care market isn't easy, especially with the large amount of misinformation that has been spread about the law. To help make the picture clearer, Donors Forum’s Chicago Grantmakers for Effective Organizations hosted a session on Small Organizations in the Wake of the Affordable Care Act.
Stephanie Altman, Health and Disabilities Advocates, Kathy Chan, EverThrive Illinois, and Judith Haasis, Community Health, provided detailed information about what organizations can expect in the new environment and how the coming changes will affect them as individuals and employers.
Two key things nonprofit employers need to know about the ACA:
- Organizations with fewer than 50 full-time equivalent employees are not required by the law to provide insurance for their employees
- ACA provides an increased range of options for insuring employees.
The Small Business Health Options Program, or SHOP, can be accessed through healthcare.gov, and it can connect businesses with fewer than 50 employees to insurance options that might work for them.
Smaller nonprofits can also benefit from available tax credits. Organizations with fewer than 25 employees and annual average wages of less than $50,000 that pay more than 50 percent of the cost of health insurance premiums for their employees, may be eligible for a tax credit equal to 35 percent of their expenses. Organizations must obtain insurance through the SHOP marketplace to get the credit.
The many variables affecting an organization's health insurance decisions are best served by working with an expert. Navigators or assistors have been trained to work with small businesses and individuals to help them connect to benefits for which they might be eligible.
Businesses and individuals can also work with brokers, who can tailor recommendations to them in ways navigators cannot. Brokers are paid by insurance companies, so they will not add to an organization's expenses, and they can help businesses find plans that work for them.
It is important to note that navigators and brokers are prohibited from charging for their services.
The Individual Market
Along with providing possible subsidies for small businesses, the ACA makes significant changes to the insurance market for individuals. Changes from the ACA can be generally grouped into two areas:
- Changes that affect the quality of insurance policies
- Changes that provide more access to health insurance
Some of the provisions in the former category have already taken effect, like the provision stating dependents can remain on an insurance policy until they are 26 and the removal of lifetime limits on benefit amounts. Many major provisions, including the health insurance marketplace, are now starting up, with the marketplace accepting applications in anticipation of a launch in January 2014.
Other provisions will take effect at the beginning of 2014. They will describe a basic level of health insurance that all people should be able to access. There will be far fewer variables insurers can use to adjust premiums. Factors that were used in the past, such as gender or pre-existing health factors, cannot be taken into consideration. The only factors that will affect individual prices are age, geography, and tobacco use.
On the quantity side, the ACA expands Medicaid eligibility in states that opt in to the expansion, including Illinois, while also providing subsidized insurance options through the marketplace for individuals. This presents several possible challenges for organizations.
First, there is already a shortage of Medicaid specialty care providers, and having more individuals using Medicaid could make this shortage more pronounced. For primary care, Medicaid reimbursement rates are being raised to Medicare levels, which should help shortages in that area. Building specialty care capacity will be a challenge.
Another challenge is that as many as 1.5 million state residents will have insurance they didn't have before, and many of them are not familiar with the best ways to make use of access to preventative care. Helping people use their new resources to best improve their health will be important.
While ACA implementation is expected to significantly lower the numbers of uninsured in Illinois, undocumented immigrants are not covered by the ACA. Organizations committed to providing health care to uninsured, low-income individuals will still be needed. They must figure out how to adapt, including whether they should introduce new revenue streams by doing things such as taking in Medicaid patients.
The new environment presented by the ACA will be challenging, but it also presents opportunities for organizations and funders to enhance the health of people throughout the region as they work together.
Resources for individuals and organizations:
Illinois Health Marketplace (www.getcoveredillinois.gov)
~ Jason Hardy, Member Services Associate, Donors Forum