Insurance & Technology News
Local government, businesses talk impact of healthcare legislation
Jun 29, 2012 (News & Messenger - McClatchy-Tribune Information Services via COMTEX) --
PRINCE WILLIAM COUNTY, Va. -- Business is good right now for Matrix Computer Consulting owner Andy Harrover.
But with the news Thursday that the Supreme Court upheld the Affordable Care Act legislation, Harrover is unsure of what the future entails for his Manassas business.
Currently, the businessman and vice mayor of Manassas offers healthcare benefits to his staff of seven. However, many small businesses may go the route of accepting a monetary penalty instead of providing insurance because it's better for their bottom line, said Harrover.
"Some of the small businesses' websites have put up articles that with premium increases expected, small businesses should not offer health care benefits and force people into these healthcare exchanges," Harrover said. "That doesn't feel straight up to me. If that's the case, then it's bad regulation."
Harrover said he'd be willing to share the increased costs with his employees but he would have a breaking point. Even under the old rules, Harrover said he had to change insurance providers four or five times in a decade-plus "to control costs."
"A few years ago, [our former insurance provider] came to us for an 18 percent increase and we said, 'no way,'" Harrover said.
The legislation -- aimed at providing some protection by 2014 to 30 million Americans without insurance -- will also affect local and state governments. However, to what extent is not known yet.
In its decision, the court ruled that the federal government couldn't threaten to withhold states' entire Medicaid allotment should they desire to opt out. If Virginia elects to adhere to the new legislation regarding the Medicaid issue, then Manassas' Family Services Department would likely see an increase in the number of those eligible for the state-administered assistance, said Family Services Director Ron King.
Consequently, it would require employing more eligibility workers at the local level to keep pace with the number of applications. Currently, the city pays 20 percent of the salary of each of its 10 eligibility workers while the state picks up the rest of the tab.
If the state elects not to participate, then the cost and administration of benefits would likely not change much, said King.
Officials from Prince William County said they would examine the ruling in more detail in the coming days.
According to county spokesman Jason Grant, the county will "look at what implications there me be immediately on the county government [for their employees] and what the potential impact would be on services offered to the community as a whole."
Manassas City Manager John Budesky said the city has been preparing for this moment since the legislation passed in 2010. The city recently went to a multi-year premium, which has helped control costs, said Budesky.
While there could be unanticipated costs, Budesky said, Manassas -- which has roughly 400 employees -- is in good shape to meet those demands. Also, utilization, not just legislation, is a driver of insurance costs, said Budesky.
"Even under the new law, there is still going to be utilization effects on the premium cost," Budesky said. "...Traditionally, we have not had a lot of payouts but one bad year could ruin that."
Virginia Gov. Bob McDonnell said he would like to see the legislation repealed but stated in a press release that the Commonwealth will implement "this flawed law in the most effective and least costly and burdensome way possible."
Staff writer Kipp Hanley can be reached at 703-530-3904.
___ (c)2012 the News & Messenger (Manassas, Va.) Visit the News & Messenger
(Manassas, Va.) at www2.insidenova.com Distributed by MCT Information Services
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UPDATED 6:03 PM EST - Jun 18, 2013
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