DMH officials say new health care law will be end of employer-based insurance

2012-11-15T00:01:00Z 2012-11-26T13:53:50Z DMH officials say new health care law will be end of employer-based insuranceBy CHRIS LUSVARDI - H&R Staff Writer
November 15, 2012 12:01 am  • 

DECATUR — The top Decatur Memorial Hospital official predicted to a group of area business leaders Wednesday that the end of employer-based health insurance appears on its way to becoming a reality.

DMH President and CEO Ken Smithmier said during a presentation in the Decatur Club that the effects of the Affordable Care Act seem to be leading toward a national health insurance system. Smithmier’s presentation, along with comments from DMH human resources director Kevin Horath, was mostly critical of changes to provisions in the law.

“We should not be allowed to be kidded by politicians or by ourselves about the real cost of this,” Smithmier said.

After analyzing the cost of providing health insurance to employees against paying government-imposed penalties for not doing so, Smithmier said some companies might see significant savings by simply paying the penalty.

DMH, for example, could pay a $4 million penalty, based on its approximately 2,000 employees, rather than spend an estimated $20 million in health insurance costs, or about $10,000 per covered employee, Smithmier said. Other major companies are likely coming to the same conclusions, he said.

Horath urged business owners and employees to become educated about the changes that are taking place, with some of the major shifts coming in the next two years.

“The Affordable Care Act has changed the landscape of health insurance since it was passed in 2010,” Horath said. “Changes are being made incrementally. It’s now safe to say health care reform is here to stay.”

Businesses should be looking at the costs of providing insurance, Horath said. Those with 50 or more employees will now be mandated to provide insurance to those working more than 30 hours a week, Horath said.

“We’re going to see some major changes come about,” Horath said.

In addition to letting business leaders know what to expect, Horath said employees need to know how the changes will affect them.

“Many employees don’t understand their insurance until they need to use it,” Horath said. “They need to know what they have and how it works. We need to educate them before tragedies and major events come.”

DMH officials have been spending time during its open enrollment period educating its employees about what is happening, Horath said.

“We’ve been making changes to our health plan,” Horath said. “Health care reform didn’t take care of the cost factor. Costs could go up endlessly.”

Those on a high-deductible plan using a Health Savings Account, or HSA, will be able to keep their dependent children on their health plan until age 26. However, Horath said the changes come with a cost, as they won’t be able to use money from their HSA for their children past age 19, or age 24 for those remaining students.

Penalties for misuse of HSA funds will increase, and the money from those accounts will no longer be able to be used to buy over-the-counter medicines such as Tylenol and Claritin, Horath said.

“It’s limiting their ability to use their money,” Horath said. “If they’re not aware of this and get audited, it has a major impact. It’s a tax increase, in essence.”

Those with a Flexible Spending Account, or FSA, will be limited to annual contributions of up to $2,500, Horath said. Doing so will limit the amount of pre-tax money that is available to spend on health care related expenses, he said.

Horath urged businesses to carefully design the health insurance plans they offer and not wait until the last minute to make changes. Penalties for not complying with the law can be steep, and he said businesses must make sure the cost of insurance doesn’t prohibit an employee’s ability to pay for it.

In 2014, Horath said, employers will be required to provide employees with health care insurance while offering an option to opt out. Among other things, employers will need to decide what their default plan will be, he said.

Horath said a controversial change has been stipulating women’s preventive health services are covered 100 percent, including contraceptives.

“It is going to cost,” Horath said. “The health plan is going to have to assume those costs.”

Smithmier said almost everyone in the country, from businesses to individuals, will feel the effects of the changes.

DMH expects to lose about $10 million in revenue from Medicare reductions by 2019, Smithmier said. As a result, he said the hospital is already looking to cut expenses where it can.

Smithmier said the local economy is being affected, as building projects aren’t being initiated and not every service that is currently offered will continue to be here.

More can be done to control health insurance costs by reducing expenses from preventable problems such as obesity, hypertension and diabetes, Smithmier said.

“Nothing is in the Affordable Care Act that deals with these problems,” Smithmier said. “The No. 1 issue in health care is what we do to ourselves.”

The system should quit paying for those types of issues, and Smithmier said individuals would then be more inclined to fix the problems they have.|421-7972

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(8) Comments

  1. Brendon Small
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    Brendon Small - November 19, 2012 1:00 pm
    we need more billboards telling us st marys is scary and if we go there we'll die. SEEMS LEGIT
  2. Jjjs
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    Jjjs - November 16, 2012 10:48 pm
    WonderWonder, you don't know what you're talking about, I know several people who has FSA's and they love it. I know people who have HSA's too, and they are well liked too. It's never a bad idea to have a savings account of pre(no)-tax dollars to be used fore medical expenses.
  3. wonderwonder
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    wonderwonder - November 16, 2012 9:30 am
    First, take FSA's OUT. They are hardly used by Americans at all. Most average people don't know what it is and wouldn't know how to set one up at all. It's a waste of time.

    Second, you will NEVER resolve the health care access and cost issue in this country until you STOP attempting to use private insurance as the primary method of providing ACCESS to care. Insurance people provide NO CARE. They are salespaeople and bean counters. Yet, they skim an average of 20% to 30% of every premium dollar into their pockets for taking very little risk. Their profits are at an all time high. The old, the vets, the kids, the uninsurable and the poor are left to YOU to pay for. The government (that's us) already insures at least 60%+ of all the people in this country, in the sense that we pay for their care in some way. It's poorly managed care because so many don't get it until they're in an ER. Not to mention FIFTY different Medicaid programs. Where's there any sense in this?

    IMHO you need a single payer system for BASIC care for all, similar to Medicare. Then, like Medicare, you couldd purchase supplemental insurance as you are able and see fit. People should not be afraid to ask to see a doctor because they have not enough money. One person's suffering, accident or illness should NOT engender a profit opportunity for an insurance salesman.
  4. fortitude007
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    fortitude007 - November 15, 2012 6:44 pm
    Not providing healthcare? sounds funny comin from a hospital. A Non profit one at that!
  5. murphious
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    murphious - November 15, 2012 5:31 pm
    I like to look at this situation from another viewpoint; it's not the cost of insurance, it's the cost of getting a procedure done. It's to the point now that insurance companies can't offer affordable plans when appendectomies run $10k plus.
  6. drake
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    drake - November 15, 2012 11:55 am
    Way to go newnanax4!!!! Too many chiefs with puppets and Mr Smithmeier who thinks the solution is to enroll everyone in crossfit. A lot of injured people coming from his crossfit program is helping keep his hospital in business. That hospital is filthy and disgusting. I wouldn't put my dog in there. I bet his home is cleaner than DMH. How can he sleep at night living the high life while everyone else working there is suffering. A horrible work environment that's for sure.
  7. Jjjs
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    Jjjs - November 15, 2012 9:06 am
    That's what happens when you have mob rule and no longer have any real freedom.....
  8. newnanax4
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    newnanax4 - November 15, 2012 7:33 am
    First of all MOST insurance companies raised their rates two years ago in preparation for the Healthcare Law. The Law is not for a Universal Healthcare plan like Canada, it is to bgetter manage the cost of Health Insurance and all of the ways they try to get out of paying after people and companies pay their premiums. If DMH had to raise their premiums it was due to the company they chose. The biggest problem DMH has with $$ is they are over extended with all their facilities and too many of whom lives on DMH farm ground and pays NO property taxes......VERY INTERESTING!!
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