Waiting on an exchange
Advisory council continues work on plans while debate persists
- August 31, 2012
The U.S. Supreme Court decision to uphold the individual-mandate portion of the Patient Protection and Affordable Care Act made things easier for the states that have been preparing for the law’s full implementation.
Joe Wilson, owner of PermaTreat Pest Control in Fredericksburg, is a member of the Virginia Health Reform Initiative Advisory Council, which has been working to get ready for deadlines under the new federal law. “I’m pleased that we have put as much work into the effort to set up a health insurance exchange as we have,” he says. “We’re probably in better shape than some other states in being ahead of the curve. [Some] states like Texas and Florida were banking on the law being thrown out.”
Still only 14 states and the District of Columbia have fully committed to setting up state exchanges. Under the law, the federal government will operate health insurance exchanges in states that do not set up their own.
Many Republican leaders still are counting on the law being repealed next year if the GOP wins the presidency and the Senate while maintaining control of the House of Representatives in November’s elections.
Gov. Bob McDonnell opposes the health-care law but wants Virginia to operate its own exchange instead of the federal government if the law is not repealed.
The insurance exchanges will be a key issue for small businesses. Their owners will have to decide whether to continue offering health insurance, particularly if the exchanges available at the state level offer less expensive plans. Plus, the rules under the new law treat small businesses differently. Those with up to 25 employees can get a tax credit of up to 35 percent for their insurance costs. That credit eventually will increase to up to 50 percent. Businesses with 50 workers or more are required to provide health insurance to employees, or pay a penalty.
It’s up to the General Assembly to accept the recommendations of the advisory council. “We figured it was in our best interest to operate on the basis that the law would be upheld,” Wilson says.
Still unresolved is the cost that businesses face, Wilson says. “Last year my increase [as an employer] was 10 percent. That’s unsustainable. We continue to shift more costs to the employee.”
Etti Baranoff, associate professor of insurance and finance at Virginia Commonwealth University, doesn’t expect Congress will succeed in reversing the law. “By the time the election comes it’s unlikely they’ll have support, because businesspeople will realize businesses are not closing,” she says. “It’s not going to affect the economy. On the contrary, it will give people the freedom to look for jobs.”