You may think that when the U.S. Supreme Court ruled in June that states can choose whether to expand their coverage of Medicaid (the state-federal insurance program for the poor), as part of the court’s approval of the Affordable Care Act, that the decision had little effect on your business. Since most employer-based programs exclude Medicaid, how could it impact you?
The truth is that Medicaid does and will have a large and long-term effect on private healthcare plans. This is because:
- All employer healthcare programs across the United States are interrelated with other systems, including Medicaid. If you think of them collectively as one large balloon and imagine one side of it being squeezed by the expansion of Medicaid, you can envision how such a change will push pressure over to the other side, including private employers.
- In particular, Medicaid changes can affect what employees are eligible or not for subsidies (and possible penalties) under their employer-based coverage. Providers can shift costs to private or employer-sponsored plans to offset any revenue shortfalls from this expansion.
- A main objective of the Affordable Care Act is to increase the number of insured Americans by 30 million starting in 2014, with 17 million of those via Medicaid. Less than half of people with incomes under the poverty level are covered by Medicaid today – the goal is to cover everyone with incomes under 133 percent of the poverty level through this program. Most of the people who would qualify for Medicaid, but live in states that do not expand coverage, will remain without coverage.
States are hesitant to expand Medicaid because future costs can be in the millions. It is unclear whether North Carolina will participate in expanded Medicaid coverage. In August, a spokesperson for Gov. Bev Perdue said that the decision likely will be up to the next governor, and neither of the leading gubernatorial candidates, Walter Dalton (D) or Pat McCrory (R), has stated an opinion on the topic. Most state lawmakers have made no comment either.
Given this uncertainty, you need to make sure you have a clearly thought-out healthcare reform plan of action. That plan should include:
- Reviewing all aspects of your benefit plan, including payroll contributions, plan design structure, network and claims administrator, among other items.
- Staying aware of eligibility for state and federal programs, such as Medicaid, in order to develop approaches to integrate these programs into their overall benefit strategy of providing coverage for their workforce.
Keep in mind that no matter what decision North Carolina – or any other state – makes regarding Medicaid expansion, none will reduce the cost of claims. The latter is the real root of the problem surrounding expenses in the U.S. healthcare crisis.
We can help you navigate what possible adjustments you need to make in your plans with Medicaid’s expansion. An excellent resource is our “mini” webinar series on healthcare reform being held on Nov. 7 and Jan. 16. For more information on these and to register, visit our events calendar.