Affordable Care Act about coverage, not cost containment, analyst says

TRENTON – The Affordable Care Act that will go into full effect in 2014 might as well be a misnomer.

That’s according to one expert – Joel White, president of the Council for Affordable Health Care Coverage in Washington, D.C. – who said Wednesday that the federal health insurance law is “more about coverage than cost containment.”

Based on a survey he conducted, White, who spoke at the Common Sense Institute of New Jersey’s Health Care Summit on Wednesday, said the average increase for health insurance premiums will be 32 percent. In New Jersey, employees working for small businesses – those that employ between two and 50 workers, can expect a 16 percent hike in their insurance premiums, he said.  

The health insurance law should be fully implemented next year, but he said there is “significant uncertainty” about  who’s in charge of what when it comes to working out the various aspects of the plan, such as how to inform residents of their health plans on the health care exchanges.

Also, the health exchanges in each state are vastly different, as well as the premiums, many of which are going to be higher than current premiums, even though federal officials have said the goal of the law is to reduce costs, according to White.

In Maryland, for example, premium increases for the various health plans offered range from  between 25 to 139 percent, based on a survey his group conducted.

On the other hand, Rhode Island’s health plans’ premium hikes range between 3 and 8 percent.

New Jersey is one of 26 states that has opted to the let the federal government put in place the health exchanges. But White said the problem is there may not be sufficient funds to put it together in time.

“They’re scrambling to draw money,” he said about the federal government.

He said while he expects most employers will retain coverage, “a lot of the cost will be shifted to employees.”

He added that many employers will look to avoid paying the 17 percent “Cadillac tax” by offering less generous health insurance plans, according to the survey he conducted.  

In another effort to reduce costs, he said fewer workers will qualify as full-time employees because employers will reduce their hours.

In what may serve as a case of prescience, White said that California’s Insurance Commissioner Dave Jones said he believes ACA will prompt young people to forego buying health insurance and settle for paying the penalties, which he described as “not significant.”

While the ACA will provide premium subsidies for those who purchase their health insurance through the exchange, that may not be able to cover all the costs.

Coincidentally, the Senate Higher Education Committee has before it two bills on Thursday that deal with one aspect of the health care issues White talked about.

S2802 and S2803 both would eliminate requirements that college students maintain health insurance coverage. S2802 would keep the requirement in place for students at county colleges, eliminating it for those at four-year schools.


Affordable Care Act about coverage, not cost containment, analyst says