The Building Tradesman Newspaper

Friday, June 28, 2013

ObamaCare: here come the exchanges

By The Building Tradesman

By John I. Tesija

As you may have read recently both in the national and local news, many unions are now questioning whether health care reform will have a positive impact upon their health care benefits.  Even many members of Congress are uneasy about the hidden fees that were buried deep in the new law.  Perhaps what is most confusing to not only the public, but to lawmakers and providers of insurance, is what is going to happen with the “Exchanges” that are to the centerpiece of the health care reform law.

The Exchanges are supposed to be an insurance shopping center of sorts where individuals who do not have coverage from their employer can look for insurance and small businesses can look to purchase policies for their employees.  While the Exchanges are very complex, there are a few things to keep in mind.  First, no one knows how well the Exchanges will be operated at the start of next year.  The federal government is likely to shoulder the lion’s share of the burden to get them up and running.  This is likely to result in a very bumpy start and it will probably take several years at least before the public (and the insurance companies for that matter) figure out exactly how the Exchanges work.

In addition, it is important to note that union-sponsored plans are non-profit plans that exist solely for the membership.  The plans that will be sold on the Exchanges, however, will be offered by for-profit companies.  As a result, those plans are likely to have less coverage at a greater cost because the for-profit companies will need to offset the money they are going to spend on advertising and other business-related costs. 

Second, the plans offered on the Exchanges will be supported by a complex group of subsidies from the government.  Funds for the insurance companies will come from fees and taxes on other insurance companies and union-sponsored plans.  Funds for individuals to buy insurance with will come certainly from taxes and other fees that are part of health care reform.  People with lower incomes will receive a larger subsidy, but the plans that are likely to be offered to them on the Exchanges will still be very expensive and have high deductibles and cost-sharing requirements.

As for the coverage the Exchange plans will provide, it does not appear that the Exchange plans were meant to replace employer provided coverage.  For example, it appears that Exchange plans will not provide disability benefits, loss of time benefits or eligibility extensions, and dental and vision coverage under the Exchange policies is likely to cover children but not adults.

It’s also unlikely that additional services such as coverage for hearing aids or chiropractic services will be covered.  Along with less coverage, the Exchanges will mean more work for the person looking to buy insurance.  The person looking to purchase will basically have to “go shopping,” so to speak, for insurance – likely with little or no outside help.  He will have to compare plans and price them out on his own based largely upon summaries prepared by the insurance companies. 

Also, it is not clear what kind of customer support – if any – will be offered. If any is offered, will it be local? Or will it be some phone number that connects to some office somewhere in Washington D.C.?  In any case, there will very likely not be a local office to call with staff that works solely on your health care plan. 

Whether we like it or not, the Exchanges are coming and they will have a major effect on how we buy and use health insurance.  Insurance companies will continue to look for ways to maximize their profit, which most often will mean providing less coverage at a greater cost to public.  That is why union-sponsored plans, which exist solely for the members and are not profit driven, are so important and so valuable to their members.  We will do all that we can to keep your health plan going strong in the years to come as it continues to weather the uncertain effects of health care reform.

(The writer is an attorney with Novara-Tesija who works with more than a dozen union health care funds in Michigan).