As the Obama administration's health care legislation begins to take effect, individuals are getting a break on preventive services, and parents can make sure older children are covered. But for many of Richmond's small businesses, the reform is a source of high anxiety.
On Sept. 23, five new regulations will go into effect, and two will bring dramatic change: Insurance companies won't be allowed to charge customers co-payments for preventive care, such as mammograms and immunizations; and children will be able to stay on their parents' plans until age 26. While the expanded coverage is likely to be welcomed by many people, small businesses worry that insurance companies will pass on the cost of providing broader coverage by increasing their premiums.
People who take out their own insurance are likely to face an increase of as much as 5 percent, says Doug Gray, executive director of Virginia Association of Health Plans, a lobbying organization for Virginia insurance agencies. Small businesses could see increases of 3 percent, while premiums for big companies could rise by 1.5 percent.
"A lot of small businesses are very concerned and worried and have a ton of questions about how this is going to impact them," says Julia Hammond, state director for the National Federation of Independent Businesses (NFIB), a nonprofit lobbying organization.
"The idea that costs are only going to go up a small amount this year does not take into [account] how much it has gone up to date. … Increasing health care costs has been the No. 1 problem for our members since we've been polling them in 1986." Such costs have increased for small businesses 103 percent over the last decade, according to research by the Kaiser Family Foundation. As a result, some small businesses cut off health coverage for their employees, Hammond says.
Small businesses may be able to compensate by making annual adjustments to their plans that cut premiums, Hammond says. But, if they do that, they also lose "grandfather" status, a federal protection that exempts some existing firms from compliance with some new regulations. The NFIB has held a series of webinars to help about 6,000 small businesses offset increases by taking advantage of other rules, such as tax- credit legislation. But because the guidelines are written so tightly, only 2 million of the nation's 6 million small businesses are expected to qualify.
There are some upsides to the changes; more people will get preventive care that can preempt expensive critical services when conditions and diseases worsen.
"The public has no excuse for not accessing preventable services," says insurance lobbyist Gray. "That is really the upside of what this policy change is."
For Anthem policyholders, about 3 million statewide, 100 percent of preventive care is covered as of Sept. 23, Golden says. "If it helps a few people access preventable services who might not otherwise, that's a good thing," Gray says.
Another important change prohibits insurance companies from denying coverage for children 19 and younger who have pre-existing conditions.
The rest of the changes will affect a sliver of the population, Gray says. Plans can no longer limit the annual amount that someone who's insured can spend on "essential health benefits," including emergency services, maternity care and hospitalization.
The last change does not allow lifetime limits on insurance plans. Gray says that rarely occurs, with some limits being set at $2 million.
Anticipating the Sept. 23 alterations, many large companies adjusted coverage earlier this year.
Altria, which employs 5,000 in the Richmond region, had incorporated many of the new provisions by late August, says spokesman Ken Garcia. In May, Anthem decided on its own to allow 26-year-old dependents to stay on their parents' plans, Golden says.
But Gray adds that the changes with the most impact will come in 2014. "We are going to have almost 400,000 coming on to Medicaid in the state of Virginia," Gray says. "That was the biggest goal — to expand access to more people."