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Financial Education

Understanding the Affordable Care Act

As seen on BostonGlobe.com/TalkingBusiness, published on Feb. 2, 2016
By Wayne J. Taylor
Because many patients tend to be discharged from hospitals sooner than that three-night period, fewer people are now able to access Medicare benefits for rehabilitation at facilities like Neville Center.

“Nationwide, there’s been a marked decrease in post-acute Medicare rehabilitation utilization,” said Norfleet.

In addition, accountable care organization (ACOs) were established under the ACA to help control health care costs. They are incentivized by the federal government for keeping rehab stays at Neville and similar facilities to a minimum.

“If a patient gets discharged back into the community successfully, we all win,” said Norfleet. “But if the patient has to return to the hospital within a month after leaving the rehab facility, we all get penalized.”

Achieving the right balance between the laudable goals of the ACA and its devilish details is likely to take some time.

Transparency is Often Lacking

Getting everyone on the same page would go a long way toward finding solutions.

“Trying to remedy what’s not working well within the health care system is something that will require everyone working together, including the lawmakers, hospitals, healthcare providers and employers,” said William F. Grant, chief financial officer of Cummings Properties in Woburn who chairs AIM’s Policy Committee on Health Care.

Cummings participates in a managed-care tier program that lets employees decide where they want to spend their health insurance premiums. Through internal education, the company has had good success in directing its employees from higher-cost tier 3 plans into lower-cost tier 1 plans. As a result, the company has had a fairly level cost basis for its health insurance.

Grant said his company gets frustrated because there is not enough transparency in the experience data gathered by health care insurers. As a result, he said, best managed-care experiences cannot be shared and adopted by other companies. In Cummings’ case, the company stresses wellness in it health care education. Limited transparency of Cummings’ experience with its wellness programs means there is no incentive for other companies to benefit from that experience.

Administrative Burdens are Onerous for Many

Massachusetts employers also comment frequently on the administrative burdens of the ACA. A prime example is found in the forms employers must supply to the IRS to prove that health insurance has been offered to their employees.

Gathering the data needed to comply with this requirement, plus the process of distributing it to the proper authorities, is a complex and cumbersome process. Cummings has the resources to have developed its own in-house reporting system, which Grant estimates takes up between 200 and 300 hours of time between its human resources and IT departments. But not every company has the resources to do it in-house.

According to Grant, some of AIM’s member companies have been outsourcing the ACA reporting requirements to external consultants such as payroll processing companies, accounting firms, and healthcare consulting outfits.

Brenda Copper works for a healthcare consultant. She is a senior vice president at Aon Consulting, a global provider of human resources solutions and outsourcing services.

“The primary concerns we hear over and over again are around the increase in healthcare insurance costs, the pressure it’s putting on employers’ ability to be profitable in their businesses, and the pressure it’s putting on their employees’ compensation as benefits take up a larger and larger share of their total compensation,” Copper said.

The trick for employers, she said, is to achieve the delicate balance between maintaining an attractive and competitive benefits plan at a cost that can be affordable to both the employers and the employee. Determining where the employer wants to place the fulcrum in striking that balance is what Aon seeks to learn when assessing the employers’ cost pressures and designing a health care benefits plan that also resonates with employees.

Shifting The Burdens

AIM recently surveyed its small to medium-sized businesses about their benefits programs. Perhaps not surprisingly, the dominant benefits concern for Bay State companies is controlling the cost of providing health insurance for their employees.

According to the annual AIM benefits survey, employers are addressing those escalating health insurance costs by adopting high-deductible, consumer-driver health plans, often with higher co-pays for medical services. Massachusetts’ employers have apparently decided that these cost-containment strategies are a better way to deal with soaring premiums than providing financial incentives through tiered network programs that try to steer employees toward low-cost, high-quality doctors.

The trend toward increased deductibles and co-pays is national in scope. Research by the Kaiser Family Foundation indicates that deductibles for all workers have risen almost three times as fast as premiums and about seven times as fast as wages and inflation since the ACA was signed into law in 2010.

“As with any large, broad-ranging piece of legislation, it takes time to fine tune things,” said AIM’s Geehern. “Some things may work well, some may not work at all. Which is all the more reason why we need to continue working together to achieve a better balance. ”