San Antonio business owners finally got the answers most of us are looking for as we brace for the start of Obamacare October 1. Mainly...how much are my health insurance premiums going to go up?
"We're saying anywhere from a 20% to a 40% increase in price," Joanna Antongiovanni, Past President of the Texas Association of Health Underwriters told the session, which was sponsored by the Greater San Antonio Chamber of Commerce.
But as Antongiovanni and other experts pointed out, those 20 to 40 percent increases won't be absorbed equally. For one, she says the increase in premiums will vary wildly due to age.
"The younger employees will pay more, and the younger employees may end up paying a little bit less," she said.
Also, she says employees of small businesses may end up seeing a higher jump in health insurance premiums than those who work for larger corporations.
One reason for the differential, she says, are rules written in to the Affordable Care Act, believe it or not that's the real name for Obamacare, which will affect the premiums that all of us pay. Most people who receive health insurance through their company are enrolled in what is called a 'cafeteria plan,' where the employee's portion of the premium is deducted from their paycheck.
"In Texas right now we have a one to seven ratio," Antongiovanni said. "That means you can't charge the oldest person in the group more than seven times what you charge the youngest. That is squeezed with what is called 'age band compression', with the community rating, and it goes to a one to three."
Since older people naturally have far more health issues than younger people, historically, younger people have paid far less for health insurance. That is going to change as younger people are being forced to pay more and more of the burden for keeping premiums for older people down.
She says there is also a rule in Obamacare that deductibles can't be more than $2,000, but that will be waived in many cases.
Antongiovanni says there will be huge questions dealing with the implantation of Obamacare in the first several months of 2014, and she says an easy way many employers are getting around those questions...is to start their 2014 insurance plans in December of 2013. That means, they can go the entire 12 months without being subjected to Obamacare rules.
"The ones that are renewing in December may avoid it altogether, because by the time they renew again in 2014, those changes will already have been fixed."
Greater Chamber President Richard Perez says he has not seen a rush of local companies cutting employee hours or reducing staff sizes to try to stay 'under the Obamacare radar.'
"That is kind of one of those urban myths," Perez said. "If I just don't have so many employees than I don't have to worry about it."
Antongiovanni says many employers and workers will find few changes to their health insurance plans, or to the costs they pay.
"There are a lot of employers which are already offering minimum essential coverage at an affordable price," she said. "They will not see the true 'shock factor' that we hear about on the news."