This is the first article in a five-part series that my large (over 30,000 employees) employer sent to me to help prepare for the fall Open Enrollment period. The letter is italicized. I have added emphasis to certain parts of the letter. This isn't speculation. This is black and white proof that President Obama lied to us. If we like our existing plan, we will NOT, in fact, be able to keep it as it was.
Healthcare Reform WILL Affect Applejack Prophylactics' (AP) Medical Plan.
You have probably heard many different opinions and arguments related to healthcare reform. One thing that is hard to argue with is that more people will have access to healthcare. And, covering more people costs more money.
Those additional costs will affect everyone paying for healthcare coverage, and that includes our firm and our associates. The cost of the AP medical plan is shared by the firm and associates. The end result of healthcare reform provisions is simple: Both associates and the firm can expect higher healthcare-related costs in 2011 and beyond.
Here are just four examples of how healthcare reform will directly impact the AP plan:
Dependent Coverage for Adult Children: We anticipate several thousand additional dependents will be enrolled in our Plan due to the healthcare reform provision that extends coverage to children until age 26. More enrollees in the plan means more claims. We estimate that these new enrollees will raise plan costs by almost $3 million. This cost will be shared between the firm and associates in the form of higher premium contributions for those in family coverage. Our plan is self-insured which means the firm - not an insurance company - pays for the cost of all services covered by the plan. The firm will pick up $2.2 million of the additional expense.
Plan Flexibility: In prior years, the firm could make design changes to the medical plan that would help control expenses. As a result, we were able to identify efficiencies and trade-offs, manage costs and pass those savings along to associates by maintaining associate contribution rates that are significantly less than what other firms charge their associates.
The mandates associated with healthcare reform severely limit our ability to continue to find and share these efficiencies. Our costs will rise as our flexibility is reduced, and that impacts all of us.
Provider Taxes: There are literally billions of dollars in new taxes that will be levied on doctors, hospitals, and medical device and drug manufacturers. Those taxes will be passed onto consumers in the form of increased rates for medical products and services.
AP Plan claim costs could increase approximately $172 per associate per year as a result of this pass-through, according to estimates from the HR Policy Association. This would be on top of the ongoing inflation for medical professional, facility and prescription costs the nation is expected to experience.
Cost Shift from Medicare: With healthcare reform comes a dramatic cut in the Medicare budget. Historically, doctors and hospitals have made up for any Medicare payment shortfalls by raising prices to private payers. And it’s anticipated they will do so again but to a much larger degree. We estimate our plan could incur additional expenses of $219 per associate per year as a result of this cost shifting.
The Bottom Line:
Healthcare reform will increase the costs to our plan. And that impacts both the firm and associates. We'll all need to do all that we can to help manage costs.
The firm invests significantly in managing our health care plans and costs. This includes reviewing our plans every year, intensive data analysis of claims and usage by our associates, and working with our health plans to ensure we are getting the most value.
Did you catch that? Did you see what I highlighted? This wonderful universal coverage that limits our ability to be efficient and will cause prices to skyrocket is supposed to represent progress? Well, Nancy, you passed the bill and now we see what's in it. It's rotten and full of crap. Now what? Will you be just as forceful in repealing it as you were in cramming it down our throats before you knew the extent of the rot? Of course you won't admit the colossal error you made. We'll remind you in November, sugar-hiney.