Starting Jan. 1, 2014, a large marketplace of health insurance options — called a Health Insurance Marketplace or Exchange — will be available to individuals — including the self-employed — and small business owners to purchase insurance for themselves and their employees. Roberta Riportella, a professor of community health with Kansas State University, Manhattan, explained Monday how the Affordable Care Act, also known as Obamacare, works for individuals and businesses during a “Lunch ‘N Learn” session sponsored by the Ottawa Area Chamber of Commerce, the Franklin County Development Council and Kansas State University Frontier District Research and Extension office.
The Affordable Care Act is a federal requirement that virtually everyone in the United States has health insurance, either through an employer, a government program or by buying their own plan, starting Jan. 1, 2014.
“I would encourage farmers to look at the options available in the marketplace,” Riportella said. “Health insurance plans have been very expensive for farmers and other high-risk occupations, but farmers bought them because they could lose the family farm if they didn’t have insurance. But now [under the Affordable Care Act], farmers will be just like anybody else, because their insurance will not be weighted based on risk factor.”
Riportella told the more than 60 people who gathered for the session at Neosho County Community College, 900 E. Logan St., Ottawa, that no one could be excluded from being able to purchase health insurance based on occupation or pre-existing health conditions under the federal health law.
Every state has to establish a marketplace or exchange, Riportella said.
“I have people come up to me and say, ‘I thought Kansas decided not to have a marketplace,’” Riportella said. “That’s not true. The law mandates that every state must have a marketplace. Seventeen states and the District of Columbia decided to set up their own marketplaces.”
A handful of other states decided to set up state-based partnership exchanges with the federal government. Kansas was among the majority that opted to have the federal government establish the marketplace in their states.
Enrollment is available through March 31, Riportella said, but those who enroll in the last two weeks of December, for example, would not see their insurance coverage start until Feb. 1, she said.
Established March 23, 2010, the Affordable Care Act mandates that every individual be required to have health insurance, and companies with more than 50 employees be required to provide health insurance to their employees.
“The most popular part of this law for those of us with adult children is that we are allowed to keep them on our health insurance plans [until they reach age 26],” Riportella said.
The Affordable Care Act is designed to provide insurance for individuals who now aren’t insured, as well as make insurance more secure for people who already have it, she said.
“If you are on Medicare, Medicare stays the way it is,” Riportella said.
The Affordable Care Act also controls insurance expenditures, she said.
Before the health care law was passed, insurance companies kept about 40 cents of every premium dollar they took in, Riportella said. Now, the act requires that insurance companies spend 80 cents of every premium dollar on health care or related expenses, she said.
“A few billion dollars was paid back to consumers last year because of this law,” Riportella said.
The provision of the law that requires businesses with more than 50 workers to provide health insurance for their employees will not affect 96 percent of businesses in the United States, Riportella said.
“Most of the businesses in this country are small businesses,” she said.
Of the companies that are mandated to provide insurance, only 0.2 percent of those large employers currently do not provide health insurance options for their employees, she said.
Most large employees offer health insurance as part of their fringe benefits package, she said, a practice that dates back to World War II. When wage and price freezes were put in place during the war, companies began offering health insurance as a way to recruit and retain the best and the brightest, Riportella said.
“The result was that the U.S. developed an employer-based insurance model that is different than what most of the rest of the developed world has,” she said.
The Affordable Care Act requires large companies with more than 50 employees to provide affordable and adequate health insurance to its workers, Riportella said. The law defines affordable and adequate by mandating that employees cannot pay more than 9.5 percent of their salaries in premiums, and the insurance must cover at least 60 percent of employees’ medical expenses.
Companies with more than 50 full-time employees who do not provide insurance or fail to provide adequate and affordable insurance will face fines, she said. Full-time, according to the act, is based on a 30-hour work week. Penalties against companies who fail to meet these provisions have been delayed until Jan. 1, 2015. Riportella speculated that companies probably expected the hourly requirement to be amended to 35 or 40 hours per week, and when that didn’t happen they weren’t prepared to implement the new law Jan. 1, 2014, based on a 30-hour work week.
Mandated insurance has proven effective in Massachusetts, Riportella, who has spent 30 years analyzing and lecturing about health policies, said. She cited figures that showed uninsured residents in Massachusetts fell from 10.2 percent in 2003 to 2.7 percent in 2009. The state also has noted a decrease in unnecessary hospitalizations because of increased access to insurance, she said.
Riportella said the goals of the Affordable Care Act are to decrease the number of uninsured Americans, make health insurance more cost-effective and improve health outcomes.
To look at plans available in the marketplace or to enroll, go to www.healthcare.gov For more information about health care reform, go to insureks.org or www.ksre.ksu.edu/issuesinhealthreform/