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Health Reform

Carter: ‘Reduce the size of our uninsured population’

State Sen. Jason Carter (D-Decatur) recently announced that he is running to become governor of Georgia, attempting to follow in the footsteps of his grandfather Jimmy Carter, who was governor of the state from 1971 to 1975. 

Carter sat down this week with GHN to discuss a range of health care issues, including the Affordable Care Act, the criticism of the State Health Benefit Plan, and the financial struggles of rural hospitals.

 (GHN is also reaching out to Gov. Nathan Deal for a similar interview on health care topics.)

 Here is the Carter interview:

 

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Q: What are your thoughts about House Bill 990, which would require legislative approval for any expansion of Medicaid in Georgia?

A: I think it’s essentially a political bill. If you examine the bill by looking at the problem that it’s attempting to solve, it’s very difficult to discern what the Legislature believes that problem to be, other than they’re worried that I’m going to get elected governor . . .

The politics are real and I think are at the forefront of it. I think the thing that’s amazing to me is that the governor would agree to give up the ability to respond in an appropriate way to the situation that’s there, to operate the state government as an executive. And I think that’s part of a pattern that this governor’s leadership style has been essentially one of passing the buck on important issues. And I think that’s a problem. This bill is indicative of that pattern.

Q: You’re in favor of Medicaid expansion?

A: What I believe is that we have to look at this problem critically. I think expansion should be on the table … and make sure those folks [eligible for coverage] can get either private insurance on the exchanges or get a Medicaid-like expansion — it all has to be on the table. I think we will do one of those things if I’m elected governor.

Q: Are you going to make expansion and health reform issues in your campaign?

A: There are sort of two sides to this coin. What you’re talking about on some level is, what are the politics of it? And on another level, what’s the moral value, or what’s the correct policy option?

I’m not sure what the politics are, but I’m going to do what I think is right, no matter what.

I think that it makes economic sense for our state to ensure that we draw down our tax dollars and bring them back to Georgia to improve the health options that our citizens have, to improve the economics of our hospitals, to inject a giant amount of money into the economy.

The jobs impact of taking the billions of dollars back and not rejecting our own tax dollars is huge. Plus, it ripples out to having more productive, healthier citizens.

My impression thus far of the governor’s campaign is that they’re going to talk about “Obamacare” a lot. I think [with] the national dialogue on Obamacare, there are going to be books written about it. It has become whatever it has become as this political animal.

The bottom line is the Affordable Care Act [Obamacare] was passed by Congress, signed by the president and affirmed as constitutional by the Supreme Court. It is the law of the land, no matter what.

What has happened in my view is what we’ve seen in Georgia is that all the Washington politics about Obamacare have been imported. It doesn’t matter if I support 100 percent of the Affordable Care Act or not. There are things I would change, there are things the president would change. The question we have to confront as governor, is what’s best for the state, given the federal law.

This governor came from being in Congress for two decades and can’t let go of the Washington politics, and wants to use Georgia’s tax dollars and Georgia’s health and sacrifice it on this Washington politics altar of Obamacare, and say, we are not going to do this because of Washington politics, instead of looking at this, and say, what makes sense? We have to look as governor at what’s best for the citizens of Georgia.

To me, it is examining the best way to do an exchange, rather than just rejecting it. [Georgia, like a number of other states, lets the federal government run its exchange.] And examining the best way to take the health care dollars and reduce the size of our uninsured population.

Q: Can you comment on the argument that expansion will cost the state too much money?

A: What’s interesting to me about this rhetoric about the federal government is that it’s pick-and-choose. We don’t like Obamacare because Obamacare is unpopular. That’s pure politics. We like deepening the Savannah Harbor with federal dollars because, well, that is popular.

Georgia today under the current leadership is one of the most dependent states on the federal government in the country, and yet we sit here and blast the federal government all day, while we grow more and more dependent on it. Half of the time we’re begging for federal dollars.

I think we have to strengthen our state government in ways that make sense. We have to invest in the future. To the extent that we’re going to participate or not participate in federal programs, we need to look at what they are doing for our state. Are we investing in our future? Are we getting stronger? When we build roads, when we invest in our infrastructure, when we deepen the Savannah port, I think those things strengthen our state. I think it strengthens our state by injecting billions of dollars into our health care system to reduce the size of our uninsured population. Those things are investments in our future that don’t make us more dependent on the federal government.

We pay our federal tax dollars in Georgia, yet we’re going to try to pick and choose based on politics when we get the benefits of those tax dollars? That doesn’t make sense.

Q: There was another rural hospital that closed in Georgia last week – Lower Oconee Community Hospital in Wheeler County. That makes four to close in Georgia in two years. What are your thoughts on that issue?

A: It is a major crisis for a community when a hospital closes. Lower Oconee in Glenwood had 100 employees and 25 beds. The problem in a community like that when a hospital closes is not just that you’re losing health care options and not just that you’re losing jobs. The economic impact a hospital has in a community like that is gigantic. It also ripples out beyond that. If it takes 30 or 40 minutes to get to a hospital from that spot, it’s harder to put a factory or mill there. You’ve got someone operating a nail gun, you have someone operating a piece of machinery, and you’re nowhere close to a hospital. It makes it more difficult. Those things about rural Georgia and rural hospitals are incredibly important to me and to those communities.

We have to find a way to make those hospitals economically viable and sustainable. One piece of that, I believe, is to use our federal tax dollars that we’ve already paid that are waiting for us to reduce the size of the uninsured population. That uninsured population is just a giant hole in [hospitals’] budgets.

We have to find ways to have sustainable economic models for those hospitals going forward. It’s not just reducing the uninsured population. It’s also finding an appropriate mix of services that are going to work in those areas. I understand there are ways to approach that issue through the regulatory environment. It doesn’t have to be to open up [the certificate of need rules]. I think we can explore regulatory solutions. We haven’t seen that yet from this administration. This being an election year, as soon as we start talking about things, the administration has acted. Hopefully we’ll see some of that in a short period of time.

Q: The health plan that covers state employees and teachers has come under sharp criticism since changes were launched in January. What’s your view of this situation?

A: First of all, I’m on that same health plan. I not only heard complaints from citizens, but complaints from my wife. A very important constituent (laughs) . . . [Both Carter, as a state legislator, and his wife, a teacher, are eligible for the state health plan.]

I believe that we have to have options — more options than we have now. I think the outcry from teachers and others has been intense and powerful. And you saw, all of sudden it’s an election year, and we’re seeing a huge amount of responsiveness from the governor’s office. The flip-flop on whether we needed to use the reserves from the State Health Benefit Plan is not shocking, it’s just politics as usual.

We’ve spent $100 million out of the reserve fund as an attempt to placate the anger. It doesn’t actually solve the problem. We’re going to continue to hear from a great number of people, led in part by the teachers, that this is not enough. We’re talking about real options that need to be there.

The State Health Benefit Plan is a symptom of a much deeper-seated problem, which is the current leadership of our state doesn’t believe they need to take care of those teachers. They don’t have a respect for the work that gets done, and the desire to recruit and retain and support the best possible workforce that they can.

I think one other aspect of the current leadership’s ideology that is indicated by this decision is they don’t run the state with the belief that it can succeed as an entity. They’re so against “government” as a concept that they don’t believe in its success. If that’s true, you’re running a multi-thousand-employee entity with serious morale problems, with disrespect for the employees. . . . You end up with decisions like this that result in a backlash.

Q: Medical marijuana is an issue that seems to have come out of the blue, yet there’s momentum in the General Assembly to allow its use for children. Do you have a position on that?

A: I agree with you that it was an interesting and surprising development, given the makeup of the Legislature. I think the fact that it was a very conservative Republican from Middle Georgia who has led the charge is interesting.

But I personally tend to be a libertarian on things like this. . . . If you have a carefully crafted piece of legislation that’s going to minimize the unintended consequences, then I wouldn’t have a problem getting on board with it.

When you talk about the health outcomes for the kids that they’ve been discussing, you have to put those facts first, and whatever ideology there is, second, or not at all.

Q: Is health care going to be a big part of your campaign?

A: Part of a campaign is meeting people where they are.

Health care is an undeniably important part of our policymaking. The state government has a huge impact on the health care industry and the health care of its citizens. There are major problems that we’re confronting. There’s no doubt in my mind that it will be an important, crucial part of my governorship.

How the campaign plays out is too hard to know.

Q: Anything you want to add about health care?

A: I think it’s important that people get good information about the health care policy discussions because it’s so opaque.

If I buy a car muffler, I know exactly what it costs. If you go get an MRI, I haven’t found anyone who tells me how much it costs.

Q: The prices could vary by hundreds of dollars.

A: Not only that, but to different patients. Having a good, well-informed discussion about it is really important.

Q: Can the state do anything about making health care prices more transparent?

A: Yes, I think that the state can do that. Part of the problem is that [there is] so much volatility into the system with the staggered rollout of the different parts of the Affordable Care Act, we have to take a minute so see where that’s going to go. We don’t know what it’s going to do to costs.

But once we settle in, and understand what the [impact of] the federal law is going to be, I think there’s a variety of things the state can do, certainly from an informational standpoint. It’s not easy, but I do think transparency is one of the things that almost always helps.

 

 

Patient classification — a complex subject, but too important to ignore

corridor in hospital / Flur im Krankenhaus

The wife of a retired Atlanta physician recently got a stunning lesson when her husband spent some time in a hospital.

“We realized there might be a problem when he was not served breakfast along with the other patients,” she said.

That was when they were told he had not actually been admitted to the hospital.

“But he’s in a hospital bed, and he’s here in the hospital,” responded the wife.

“Yes,” a nurse explained. “It can be confusing.”

The wife, who is requesting anonymity due to privacy concerns, got another shock when the hospital bill arrived. During her husband’s hospital stay, he had received the same routine medications he took at home, but the amount the couple was being charged for those drugs far exceeded what they paid at their pharmacy.

The lesson the couple learned is that being “hospitalized” can mean different things.

Many Medicare patients are placed under “observation status’’ when they arrive at a hospital. That means they are considered outpatients and are not formally admitted, even if they are given a bed.

For a patient under observation status, Medicare reimburses the hospital differently. And that may increase the out-of-pocket costs that Medicare patients face. (But if the patient has a Medicare Advantage Plan, such as an HMO, cost and coverage may vary.)

Hospitals may get an indirect financial benefit when they place people on observation status.

For instance, a patient who is formally admitted to a hospital counts as a readmission if he or she has recently been discharged from that facility. An outpatient does not count as a readmission even if he or she has been discharged recently. This is important because readmission statistics affect a hospital’s bottom line. If the facility records a high number of Medicare patients being readmitted within 30 days of a discharge, it faces federal penalties on its reimbursements.

As hospitals try to avoid the costly problem of too many readmissions, the patient may be caught in the middle.

 

The vanishing inpatient

 

Keith Lind, senior policy adviser for AARP Public Policy Institute, said recently that a national study found that both one-day inpatient stays and inpatient stays of all lengths declined by about 16 percent during the study period. But at the same time, the report said, “the ratio of observation use to inpatient stays per 1,000 beneficiaries increased by 94 percent.”

Hospital Outpatient Entrance SignSometimes financial complications arise for patients, as when a Medicare patient is transitioned from being “observed” in the hospital to being treated in a skilled nursing facility, such as a nursing home or a rehabilitation unit.

The patient must first have been an inpatient for at least three full days for Medicare to pay toward the skilled nursing facility stay.

To help Medicare beneficiaries, CMS urges patients to question every hospital stay and find out if they are listed as inpatients or outpatients. But often a patient may be too ill to ask Medicare-related questions, and the family will sadly discover the difference when the skilled-care bill arrives.

Dr. Cheryl McGowan, a Georgia family medicine physician, recalls the situation at a hospital where she trained. Sometimes residents would admit a Medicare patient from the emergency room to an inpatient unit, but then learn that the patient did not meet the hospital’s criteria for inpatient admission. The physician would then be asked to change the patient’s status to observation.

A patient kept for observation may later qualify for inpatient admission, depending on the results of tests or changes in physical status during his or her stay, McGowan said. Such changes in patient designation can lead to confusion for everyone.

One CMS example illustrates some of the many variables: If a Medicare patient arrives in the emergency room with chest pain and the hospital keeps the patient two nights for observation, Medicare Part A, for inpatient hospital care, pays nothing. But Medicare Part B, for outpatient care, covers lab tests, EKGs, and certain other items, just as if the patient had been seen in a physician’s office.

Part A and Part B have been referred to as a full menu vs. à la carte. The à la carte or individually charged items can add up rather quickly under Part B. Hospitals get lower rates for room and board. But services such as X-rays, MRIs and the like are reimbursed individually, which helps the hospital.

To further complicate things, there is the two-midnight rule.

Last year, the federal Centers for Medicare and Medicaid Services issued a new policy on observation status. When a physician expects to keep the patient in the hospital for a period of time that does not cross two midnights, the services should be paid under Part B, or outpatient services.

Carol Levine, who heads the United Hospital Fund’s Families and Health Care Project, said at a recent Washington briefing that this two-midnight rule “continues to leave patients and families exposed to high and unexpected costs associated with what seems like an ordinary hospital stay.”

That’s because stays lasting less than two midnights will not be presumed to qualify as inpatient stays — and instead will be paid under Part B, which covers only outpatient services.

The co-pay for an individual service under Part B won’t be higher than Part A, but an overall total of the Part B patient co-pays might be. Costs can rise when they are individually billed, as opposed to the “package” pricing found under Part A.

 

Observation wards?

 

Today, hospitals must make patients aware of their inpatient or outpatient status. For example, if the physician writes an inpatient admission order and a hospital review changes the status to outpatient, there must be written notification of the change.

But do Medicare patients always understand the significance of a changed classification? As noted above, even some medical professionals admit it’s confusing.

smslogoPhysicians who are trying their best to deliver good care can be as frustrated as patients with the current situation. Dr. William Silver, the president of the Medical Association of Georgia (MAG), said the organization joined a number of state and national medical societies to push through a resolution urging the AMA to press for repeal of the two-midnight rule “because it only exacerbates the heavy and unreasonable administrative burden that’s been placed on physicians by the federal government and other third-party payers.”

In a joint letter to CMS in November, the American Medical Association and the American Hospital Association suggested a delay in enforcing the new two-midnight rule until Oct. 1, 2014. In the meantime, CMS has extended the delay in enforcement through March 31.

A potential solution that may protect the interest of hospitals and physicians is the establishment of hospital observation units.

On a recent PBS NewsHour program, Dr. Michael Ross, associate professor of emergency medicine at Emory University School of Medicine, and co-author of a study published in Health Affairs, said patients may require less than 24 to 48 hours of observation. The article suggests a unit just for those being observed may actually cut costs for the patient and the hospital, depending on the individual’s diagnosis and treatment.

But a further concern was brought up by Susan Reinhard, senior vice president at AARP: How will a hospital cover the cost of increased observation nurses if nurse-patient staffing is based on inpatient beds?

Reinhard says about a third of the hospitals in America already have dedicated observation units.

Ross and Reinhard, based on their research, say the majority of hospitals send patients to empty beds somewhere in the facility, a situation that offers less than the optimal setting for observation. They both wonder whether some of these patients are observed for far too long and should be formally admitted earlier.

 

Judi Kanne, a registered nurse and freelance writer, combines her nursing and journalism backgrounds to write about public health. She lives in Atlanta.

 

Mobilizing for enrollment: Veterans and the health care law

Vietnam War veterans gather in Washington, D.C., at a memorial.

Vietnam War veterans gather in Washington, D.C., at a Vietnam memorial.

How does the upcoming rollout of Obamacare affect Georgia’s 770,000 military veterans?

Are their VA benefits changing? What should veterans do if they’re uninsured now?

The Department of Veterans Affairs earlier this month sent out a letter to veterans explaining their options under the Affordable Care Act. Nationally, 8.7 million veterans are enrolled in the VA health program.

First, the 2010 law won’t change VA benefits. And if a vet is enrolled in VA health care, that coverage meets the standards for the health reform law’s insurance requirement. So that veteran will not face any penalties for not having health insurance in 2014.

That’s one reason the Department of Veterans Affairs expects to see its veteran patient population grow by about 66,000, a senior VA official told Congress in April.

According to the Urban Institute, there are an estimated 1.3 million uninsured veterans under age 65 in the United States, constituting roughly 10 percent of the nonelderly veteran population nationally. The estimate in Georgia is about 56,000 veterans without health insurance.

Most uninsured veterans are eligible for VA health care, federal officials say.

In the recent letter, the VA urges all qualified people who have no coverage to enroll in its health care system. There are no enrollment fees, monthly premiums or deductibles, and most veterans have no co-pays. (Some vets who have sufficient means pay modest co-pays.)  Because enrollment takes time due to the need to verify eligibility, it’s best to sign up quickly.

Not everyone who has served in uniform qualifies for VA health care. “It’s a common misconception that everyone gets VA coverage,’’ says Amanda Ptashkin of the consumer advocacy group Georgians for a Healthy Future.

One major group who do not meet the basic eligibility requirement for VA care are Reserve or National Guard vets who served on active duty for training purposes only.

(In recent years, it has become common for Reserve and Guard members to be called up for active duty and sent on assignment just like members of the regular military. If they are on active duty long enough, these troops can earn standard VA benefits. But from the 1950s through the ’80s, Guard and Reserve members were rarely called up, and many served for years without earning enough active-duty time to qualify for benefits. )

Overall, a veteran’s eligibility is determined by length of active service, type of discharge, service-connected disabilities, and income level, among other factors. Contrary to one common myth, war service is not required; there are many peacetime veterans in the VA health system.

veteranBut not all veterans who are eligible for VA care are enrolled. Genevieve Kenney of the Urban Institute’s Health Policy Center, who has co-authored studies on uninsured veterans, says that one possible explanation is that some uninsured vets who could qualify may not be aware that VA coverage is available to them.

Kenney adds that ACA-related changes — such as the availability of trained navigators, the screening of applications for a variety of programs, along with the fact that VA coverage will satisfy the individual mandate, could raise veterans’ enrollment in VA services.

More than 300,000 children of veterans and more than 600,000 spouses of veterans are uninsured, and most are not eligible for VA care, Kenney notes.

She says that more than 40 percent of uninsured veterans and over 50 percent of uninsured family members report having unmet health care needs.

Veterans who aren’t eligible for VA – and their families — could go to the health insurance exchange, or marketplace. But another option, gaining Medicaid coverage, is limited in states that aren’t expanding the program. Georgia has rejected Medicaid expansion.

Ironically, in states that don’t expand Medicaid, the poorest adults don’t qualify for the subsidies in the health insurance exchange.

About 20,000 low-income uninsured veterans would be eligible for Medicaid if Georgia expanded the program, but at the same time won’t receive subsidies in the health insurance exchange either.

“It doesn’t seem like it’s a big enough issue for people who object to the ACA,’’ says Tim Sweeney, director of health policy for the Georgia Budget and Policy Institute.

In Georgia, there are three VA hospitals and more than 20 clinics throughout the state.

Here are some ways to enroll in VA care or determine your eligibility:

 

Don’t be fooled: Crooks aim to exploit confusion over Obamacare

Con artists often take advantage of confusion over health care.

Con artists often take advantage of confusion over health care.

Con artists looking for their next scheme can usually find plenty of fodder in the health care field.

Especially enticing to these crooks are new health programs. One example was the Medicare prescription drug benefit, which led to a rash of scams after it was launched in 2006.

Now, with the rollout of Obamacare, health-related scams are increasing again, says the National Consumers League, a nonprofit advocacy group. The law, officially known as the Affordable Care Act (ACA), is the nation’s most sweeping change in health care in decades.

It’s probably only a matter of time before the scams hit Georgia. The state insurance commissioner’s office said last week that it’s not aware of any ACA-related fraud cases here yet. But the agency has said it expects to see them.

Georgia is sure to be a tempting venue for the latest bunch of health care scammers. It is now officially estimated to be the eighth most populous state in the nation, with hundreds of thousands of people who could be affected by the ACA’s changes and are potential targets for fraud.

“Any time you roll out a big government program like this, confusion is inevitable,’’ Lois Greisman, an associate director in the Bureau of Consumer Protection at the Federal Trade Commission, told CNBC recently. “This confusion creates a tremendous opportunity for the fraudster.’’

A recent poll by InsuranceQuotes.com found that 85 percent of respondents didn’t think consumers had enough information about the Affordable Care Act.

As open enrollment for the ACA’s health insurance exchanges begins Oct. 1, the con artists will ramp up their own operations right along with it. In one sense, they actually have a head start.

“There are fake exchanges already up and running on the Internet,’’ Monica Lindeen, Montana’s commissioner of securities and insurance, told CNBC. “If you do a search and type in ‘exchange,’ you’ll find all sorts of websites that claim to be in the exchange when they are not.’’

The National Consumers League recently warned about the wave of fraud that’s occurring. “We’re seeing an increase and we’re trying to get ahead of it,’’ said John Breyault, a vice president of public policy with the group.

Targeting seniors

The term “Obamacare,’’ though not even an official name, is commonly used by these con artists, apparently because of the public’s familiarity with it, a Nevada official told the New York Times. And as with other scams, seniors are a frequent target.

According to the National Consumers League, the schemes include:

** Scammers in Massachusetts marketed fake health insurances policies and created fake websites that claimed to sell Obamacare, targeting seniors to gain their personal information.

** In Kansas and Alabama, crooks posing as government employees persuaded consumers to divulge their bank account numbers in order to sign up for fake health plans.

** A company in Arizona deceived a senior into providing her bank account number by claiming that she was qualified to sign up for Obamacare but that there were only 20 spots left.

Scammers have also told consumers to wire money or send funds via a prepaid card if they want the full benefits of the new health care program.

In the month of May alone, the Federal Trade Commission received more than 1,100 complaints about similar scams, according to the National Consumers League’s fraud.org website.

Another variation of the scam begins with fraudsters claiming to be “navigators,” insurance counselors who are helping consumers with enrolling in the exchanges, or marketplaces. The Obama administration last week announced the organizations that will provide navigators across the country.

 

What to watch out for

Here are some tips for consumers to avoid being swindled:

** The health insurance exchanges don’t begin enrollment till October, so you can’t buy coverage under the Affordable Care Act until then. Don’t respond to a cold call of any kind, especially one that asks for personal information or money.
** If anyone contacts a consumer by email or fax about Medicare, “it’s likely a scam,’’ Breyault says.

** If someone claiming to be with Obamacare or another federal program asks you to wire money, give out your bank account number or load funds onto a prepaid card, it’s a scam.

** There is no card associated with health care reform, and there is no new Medicare card, and you do not have to update any personal information.

** Don’t let anyone rush you. The rates in the exchange won’t change during the initial enrollment period, Oct. 1 to March 31. Anyone promising a “special price’’ or “limited time offer’’ or who tells you “spots are limited’’ is lying.

** Familiarize yourself with the ACA on the healthcare.gov website.

Consumers should report scams to fraud.org, the Federal Trade Commission, the state attorney general’s office, or the state insurance commissioner’s office at 404 656 2298.

Restaurant industry nervously eyes ACA’s changes in insurance rules

Athens Pizza won't be subject to the employer mandate because the Decatur restaurant has fewer than 50 workers

Athens Pizza won’t be subject to the employer mandate because the Decatur restaurant has fewer than 50 workers

Atlanta restaurateur Steve Simon has run the numbers on health care reform. He needed the information to weigh his options.

Simon is co-founder of Fifth Group Restaurants, which operates seven restaurants and other businesses in the Atlanta area, employing more than 500 people. Currently, Fifth Group offers health insurance to its managers only.

But under the 2010 Affordable Care Act, when it is fully implemented next January, a business with 50 or more full-time workers must offer all employees working at least 30 hours a week a health plan that’s considered “affordable.’’ If it doesn’t, the business must pay a penalty.

This “employer mandate” represents a great unknown for Fifth Group, Simon says. The impact on the business could range from $50,000 to $400,000, he says.

Indeed, much of  the restaurant industry, with its many low-wage workers and its generally low rates of offering insurance, may face a financial jolt from the law.

Simon’s effort to determine potential costs is part of the frenzy of activity for business owners with 50 workers or more in calculating the impact of the insurance mandate.

Restaurants employ roughly 10 percent of the workforce both in Georgia and nationwide. While many dining establishments have fewer than 50 employees and therefore won’t be subject to the mandate, others will be affected. “There’s deep concern out there,’’ says Karen Bremer, executive director of the Georgia Restaurant Association.

“The restaurant industry understands that their most important asset is their employees,” Bremer says, but she adds that health insurance costs have spiraled out of control.

The cost of health insurance has been the No. 1 issue facing small businesses, according to surveys by the National Federation of Independent Business. “Our margins are so thin, there’s only X amount of dollars,’’ Bremer says. “If . . . [employee coverage] was affordable, you’d have everybody insured.’’

Then there’s the complexity of the new health law, which Bremer says has prompted many meetings within the industry.

“I don’t think anyone has all the answers,’’ Simon says.

Restaurants and retailers face “a delicate calculation,’’ says Bill Custer, a health insurance expert at Georgia State University. “We’re dealing with a lot of ‘what ifs.’ ’’

“There’s a lot of consultant activity as employers try to work through the numbers,’’ Custer says.

 

Some workers may say ‘no’

Despite all the concern in the industry, some restaurant operators say the law’s impact may not be as great as originally feared.

They cite the fact that to count as affordable coverage under the law –– thus escaping the penalty –– a business can charge workers up to 9.5 percent of their annual wages to pay for insurance. So if a worker is making $30,000 a year, the business can set his or her share of the premium at $2,850 annually, or $237.50 per month.

The restaurant owners say many workers will avoid such premiums by going without coverage, choosing instead to pay the ACA’s penalty of $95 for uninsured individuals.

Other options for these low-wage employees include joining a spouse’s plan, staying on a parent’s plan till age 26, or enrolling in Medicaid in the states that opt to expand that program.

Riccardo Ullio, who owns three restaurants in Atlanta, says that once a company offers affordable insurance, “that places the burden on the consumer himself.’’ He predicts relatively few restaurant workers will join the company plan.

Simon says that “unless no one signs up’’ for Fifth Group’s newly available coverage, the change in the law will affect the company’s bottom line. That may lead to higher prices on his restaurants’ menus, he adds.

Fast-food chains, with their large workforces, have a lot riding on the ACA’s changes. Wendy’s has stepped back from gloomy predictions about the health law, saying it will cost about $5,000 per year per restaurant, not the $30,000 the company initially foresaw. But McDonald’s estimates that each restaurant will incur between $10,000 and $30,000 in added annual costs.

 

The problem of part-timers

Under the health care law, the hours of a company’s part-time employees make a big difference. Affordable coverage must be offered to employees who work an average of 30 hours or more a week. That has prompted talk of reducing current workers’ hours to below 30.

The part-timer issue led to controversy last year when Darden Restaurants began experimenting by hiring more part-time workers at its Olive Garden, Red Lobster and Longhorn Steakhouse chains to see if it could cut its health costs under the new law. That created a public backlash that Darden officials say has cut into its profitability figures.

The company recently announced it would not reduce its current full-time employees’ schedules to part time, and that its new restaurants will hire some full-time hourly workers.

Some businesses will take advantage of the 30-hour loophole by limiting newly hired part-timers to 29 hours or below and allowing only the very best workers to be full time, says benefits attorney Warren Kingsley of Arnall Golden Gregory.
In his more than 30 years as a benefits lawyer, Kingsley says, “this is the most complex law I’ve ever dealt with.’’

For a business above the 50-employee threshold, the penalty for not providing workers with any coverage is $2,000 per year for each full-time employee it has, minus the first 30 employees.

But the penalties may be less punitive for employers who offer stripped-down benefits that are still considered “minimum essential coverage.”

Some restaurant companies are considering such coverage, which would offer preventive care but not such important features as surgery and hospitalization. The Wall Street Journal recently reported that a restaurant company in Texas is planning to offer the bare-bones plan.

Under this scenario, the company incurs a $3,000 penalty for each employee who rejects the limited plan and goes to the ACA’s new insurance exchange for coverage. That per-worker penalty would wind up potentially much less than the penalty for not offering coverage at all, which is assessed across the workforce.

 

Supporters defend law

Supporters of the Affordable Care Act, meanwhile, point out that the employer mandate affects just a small segment of businesses, noting that small firms are exempt, and that most larger companies already provide insurance.

“In Massachusetts, their employer mandate was set at 10 employees, and Massachusetts saw an increase in employer coverage,’’ says Rhett Buttle of the Small Business Majority.

Kathleen Stoll of Families USA, a consumer group that’s a staunch backer of the health law, says that those who have insurance ultimately pay – in higher insurance and medical costs — for employers that don’t cover their workers.

Companies that don’t offer insurance to their workers “freeload on the rest of us,’’ Stoll says. “I would be willing to pay a couple cents more if the person serving me or cooking the food has coverage.’’

Sandy Papadopoulos, who operates Athens Pizza in Decatur and has fewer than 15 employees, won’t face the mandate. But if he did, he says, “prices in the restaurant would have to increase dramatically, without question, across the board.’’

Papadopoulos calls the law the “unaffordable health care act.”

“You don’t need to regulate employees, you need to regulate insurance companies so then people can afford it,” he says.

Jessica Blackburn, an uninsured waitress working at a small restaurant, figures “there is no chance’’ the restaurant will offer her coverage in January. “I think it would be helpful . . . [if it were available], yes.”

Restaurateur Ullio says he’s not overly concerned about the Affordable Care Act, though he adds, “I may completely change my mind next year.’’

Simon says he sees positives in the law. People who “really need insurance will have the ability to get it,’’ he says.

But he adds that the ACA also brings a high level of uncertainty for businesses. “If you do the math,’’ he says, “there are so many moving targets.’’

 

GHN intern Sofia Kouninis, an Emory University student, contributed to this article.

 

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