What Entrepreneurs Can Do to Be Prepared for Changes to Healthcare Legislation
This week, House Republicans released the American Health Care Act, the plan that if passed would take the place of the Affordable Care Act. Today, the House Energy and Commerce and Ways and Means committees are set to begin voting on elements of the proposed legislation.
As it stands now, some popular provisions of the ACA, including protections for people with pre-existing conditions and the possibility for children to be covered by their parent’s insurance plan until 26, would be maintained in the AHCA. However, it presents some significant changes that could create uncertainty for many, especially workers and employers.
The proposed legislation would do away with both the individual and employer mandates. And if someone were to have a lapse in coverage for more than 63 days, the provider could add a 30 percent surcharge to the cost of the new plan for a year. The AHCA also would repeal the tax that the ACA placed on families with an annual income of $250,000 or more and individuals with an income of $125,000 or more.
The ACA expanded Medicaid for people under 65 years of age with incomes up to 133 percent of the federal poverty level -- which for an individual, is up to about $16,040. However, the plan proposed for the AHCA would freeze enrollment in the expanded Medicaid program in 2020.
While President Donald Trump and Republican Party leadership have voiced their opposition to the ACA, 48 percent of adults have a favorable opinion of the legislation, according to a recent poll conducted by the Henry J. Kaiser Family Foundation. Last week, the Congressional Budget Office said that it projects that in 2019, the federal government will spend one-third less on its implementation than what it did when the ACA was passed in 2010.
There is more information available now than there was at the start of the Trump administration, but much is still uncertain, especially for small-business owners. Here’s what you can do to remain up to date and involved in the process.
Educate yourself on the legislation by seeing what resources your local small-business or industry association membership groups have available, says Katie Vlietstra of the National Association for the Self-Employed (NASE), which counts 27 million sole proprietors and micro-business owners (those with 10 employees or less) as members.
She also recommends subscribing to email lists for the House Energy and Commerce, House Ways and Means, Senate HELP and Senate Finance committees to track the bill's progress. Speaking with a private broker can give a better understanding of what products and plans are available, especially if you are concerned about maintaining coverage.
She advises that you should communicate with your workforce and tell them what you know so no one feels like they are being kept in the dark. "No one is going to lose coverage tomorrow, [and] there is going to be a significant transition period before any reforms are put in place," she says. "Keep them in the loop as to what is happening."
Bob Kocher has a firsthand understanding about what this kind of transition entails. He is both a doctor and a partner at Venrock, a venture capital firm that focuses on companies in the healthcare IT and services space. He also worked in the Obama Administration as the special assistant to the president for healthcare and economic policy on the National Economic Council, helping to shape what became the ACA.
Kocher says he sees the proposed legislation as a move in the wrong direction. “Its impact on coverage, public health, access and affordability will revert America to developing-country levels of coverage and health outcomes,” he says, adding that a proposal which preserves coverage, allows patients to keep their physicians, lowers the total cost of care and would make premiums less expensive is what representatives should be working on for their constituents.
His best advice for business owners who have concerns about the AHCA is to make their voices heard in Washington, D.C. “Entrepreneurs should be talking to their members of Congress about their businesses and the implications of policies on them,” he says. “They should be commenting to proposed regulations. As somebody who used to be involved in regulations, we read every single comment that was submitted.”
This is a powerful action that not enough entrepreneurs take, Kocher says.
Take a hands-on approach.
While it will likely take months for the government to finalize a piece of legislation, entrepreneurs still have to make both short- and long-term decisions while they play the waiting game.
Christian Birky, the 26-year-old founder of Lazlo, a Detroit, Mich.-based maker of men’s T-shirts that he launched with his sister Kathryn, recently purchased an insurance plan through the Affordable Care Act. One of his two employees has a pre-existing condition.
“I want to be able to provide health care as soon as we’re able to, and obviously there is a lot up in the air right now as to what that might look like,” Birky says. “It impacts my life, it impacts what we are able to do for our employees. … How is is this going to impact those 10 people who we think will be working with us in the next year?”
When his two employees came to work for him, they didn’t have health insurance. One had just moved to the United States from Germany and the other had just gotten out of prison.
“I learned more about it than I thought I would just helping them walk through it and going through the process myself,” Birky says. “Don’t underestimate how much it means to people. Regardless of whether you are providing it or not, make sure [your employees] have good coverage. Do whatever you can in the meantime to make sure your employees feel confident about where they are at.”