NEW PORT RICHEY — More pieces of the puzzle are falling into place, but parts of the Affordable Care Act of 2010 remain a bit of a mystery, a panel of experts said Tuesday.
“Decoding the Health Care Act” included two local hospital administrators, Shayne George, the CEO at Regional Medical Center Bayonet Point, and Michael Yungmann, who took the reins as president at Morton Plant North Bay Hospital, in New Port Richey, on Jan. 6.
Providing other perspectives were insurance and tax advisers Richard G. Modglin, president of Modglin and Associates, based in Holiday, and Todd Unbehagen, president and CEO of Unbehagen Advisors, based in Tarpon Springs.
“They’re making so many loopholes,” cardiologist Rao Musunuru complained during the question-and-answer period at the Business Development Week luncheon. West Pasco Chamber of Commerce put on the event at Pasco-Hernando State College.
Nobody can tell yet if the ACA, often called “Obamacare,” will succeed, Musunuru observed.
The federal government took a carrot-and-stick approach in implementing the ACA, George said.
One of the “carrots” comes in the form of a tax credit up to 50 percent for small businesses with 25-or-fewer employees to provide medical insurance. The ACA does not require them to do so at this point.
The stick comes from the individual mandate that each person must find some type of medical insurance policy or face a penalty. The government delayed implementation of the employer mandate until 2015.
The act carries a big stick to “force hospitals to take a more comprehensive view” toward health care, Yungmann remarked, with a “heavy emphasis on prevention.”
“Every hospital out there is struggling with implementation” of the ACA, Yungmann said.
Complicating matters is whether Florida lawmakers will pass some form of Medicaid expansion this year. If not, up to 16,000 Pasco County residents could “slip through the cracks” and remain uninsured, Yungmann estimates.
Florida has been spending some $3 billion on uncompensated health care costs, Yungmann noted.
“That’s a huge burden businesses carry” at this time, Yungmann said. Firms in Florida also face heavy penalties if the state does not enact health exchanges for the poorest residents.
Hospitals are changing to a value-based payer system that shows good outcomes from treatment of patients, George said. In the past, hospitals got reimbursements on a value-based system using fees for each procedure, with little regard for the outcome.
Hospitals and doctors will have to work more closely than ever before, George continued. In the future, people will be able to go to a website that lists how well each doctor did on treatments.
The total cost to extend coverage to the uninsured could amount to $1.1 trillion, Unbehagen said.
To help pay the expense, the government imposes an extra Medicare payroll tax for high-wage earners, starting at $200,000 for an individual.
A capital gains tax on unearned income could even impact S corporations, which many small businesses use, Unbehagen noted. The amount is 3.8 percent, with an extra 3 percent above a certain threshold, he said.
Hospital administrators probably are quite familiar with an excise tax on medical devices.
Tax law changes will make it harder for people to itemize medical expenses, Unbehagen observed. The former Schedule A threshold of 2.5 percent of income to claim medical deductions has risen to 10 percent.
A 10-percent excise tax on tanning beds also goes toward paying for ACA.
The government imposes a “Cadillac tax” on insurers that offer high-end policies for wealthy clients.
Quizzed if Obamacare is socialized medicine, Modglin said health insurance remains a private business with subsidies.
Most Americans not on Medicare could qualify for “substantial subsidies,” Modglin added.
ACA already has done away with refusing health insurance to people with pre-existing conditions, Modglin pointed out.
“That’s a huge improvement,” Modglin remarked. In the past, insurers had declined to cover as many as 40 percent of applicants with pre-existing conditions, such as diabetes.
New rules can create “skinny networks” of doctors and other health care providers for inexpensive policies, Modglin said.
“If you want to pay very little, you will have fewer choices,” Modglin added. People able to afford to pay higher premiums can maintain a full network of choices among doctors.
The IRS will enforce the new regulations, Unbehagen said. IRS will watch for companies that might try to start a separate division or subsidiary to skirt the law that requires a firm with 50 or more workers to offer health care policies.