... you are a municipality.
Officials across North Texas are expecting to see a spike in health care costs for their employees, but the amount of the increase—and how municipalities will pay for it—remains a mystery for most.

“It really is a significant issue for everyone,” wrote Kim Collins, town of Argyle finance director, in an email. “Lots of unresolved issues only add to the anxiety, which is unfortunate.”

Argyle has a small employee base, about 20 people. Originally, its health insurance plan renewed on April 1 of each year, so for the fiscal year 2014 budget, town officials knew the rate for the first six months, and were figuring in a high 20 percent increase in costs to be on the safe side. Then the plan changed, giving Argyle a clearer picture of what to expect. The plan will now renew on October 1, and there will be no need for the 20 percent increase.

“We started offering a Health Savings Account-type plan a couple of years ago, and incentivized it,” Collins wrote. “It gives the town a cost savings per employee and also encourages the employees to think about their health care expenditures more closely. We have discussed moving entirely to that format if the traditional premiums keep rising at the rate they have been.”

In Carrollton, city officials have been working over the past few years to keep health care costs down, never an easy task. The city has implemented employee-wellness programs, launched an international medicine program (giving employees the option of traveling abroad for health procedures), and incentivizing people to use generic drugs. Under the city’s plan generic drugs are free, a move that last year saved the city $50,000 just from employees who switched from Nexium to the generic alternative, says assistant city manager Erin Rinehart.

The city covers approximately 1,550 people and saw a 5.3 percent increase in premium costs last year. It expects the same again this year.

Lauren Safranek, director of human resources for the city of Frisco, says the city is “adjusting what is necessary under the act,” but believes it may dodge many of the difficulties. Most of the city’s employees are either 40-hour-a-week or 20-hour-a-week workers, meaning that few come close to the 30-hour threshold that will jump-start insurance benefits under ACA. The cost to the city in the past year to implement ACA-mandated changes has only been $112,000, Safranek says, but it’s still preparing for the worst.

“It’s still unknown how these changes are going to affect the actual charges or costs of health care,” she said. “We’re trying to enter into some aggressive measures, looking at fixed pricing for specific procedures, and evaluating the best places and practices and also the best pricing.”


... you are in a union.
Chances are, you already have pretty sweet benefits. Problem is, those might be going away.

Starting in 2018, high-end “Cadillac” insurance plans will be subject to a tax, paid for by insurers. The idea is this: these no-co-pay, no-cap, no-deductible plans have slowly become a higher percentage of an employee’s overall compensation, as a way to avoid taxation. By taxing the plans—the combined employer and employee contributions—the feds hope people will stop getting unnecessary medical care just because it’s available.

The tax will only apply to these Cadillac plans (ones with combined contributions of $10,200 for an individual and $27,500 for families), and begin at 40 percent of the combined premium contributions. The Teamsters, United Food and Commercial Workers, and Unite Here unions have already expressed their displeasure, sending letters to congressional leaders this summer.

But, as of now, if you are in a union—or are a government employee, college professor, or have another equally well-benefited job—your benefits are likely to take a hit as insurers seek to keep costs down.


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... you are a hospital CEO
By Joel Allison, president and CEO of Baylor Health Care System.

I look at the Affordable Care Act from both the perspective of a health care provider and a major employer. From both perspectives, the ACA means we need to do less with less— spend less money to provide less health care. But is less health care better health care? Yes, because it means we’re being more efficient, eliminating wasteful testing and procedures, doing things right the first time, and, overall, keeping people healthier.

At Baylor, we’re working to better coordinate patient care. A patient may have several different physician specialists, none of whom know what the others are prescribing. One of the focuses of Baylor’s new accountable care organization, the Baylor Quality Alliance, is making sure patients have a medical home—a primary-care physician who accepts the responsibility of coordinating a patient’s total care. Right now, the Baylor Quality Alliance has one of the highest numbers of certified patient-centered medical homes of any network in the country. The electronic health records incentivized by the ACA are helping improve care coordination as well. By the end of 2013, electronic health records will be fully implemented across the Baylor system.

We also need to increase our focus on chronic diseases. We know that 75 percent of all health care dollars spent in America today are spent on treating them. In 2010, Baylor opened its Diabetes Health and Wellness Institute in South Dallas. So far, members of the Institute are 40 percent less likely to visit an emergency room. So we know this increased focus saves money and lives.

We are shifting from sick care to real health care. Under the ACA, hospitals are no longer reimbursed for the care they provide patients who are readmitted after a procedure. For the first time, we as hospitals are now incentivized to create strategies to keep people healthy once they come home from the hospital.

And as an employer of 20,000, I am also intently focused on keeping my own employees healthy. We know that an employee who smokes costs the organization roughly $6,000 a year more than one who doesn’t. So at Baylor we have an incentive-based wellness program, Thrive, focused on helping employees quit smoking, eat more healthfully, meet exercise goals, and reduce stress levels. For every $1 we spend on Thrive, we save $2.44.

The ACA was designed to force a bend in America’s health care cost curve. As a leading health care provider and major employer, we at Baylor are tasked with creating and implementing strategies to make that goal a reality.

In general, that means we need to continue to work to provide the right care, in the right way, in the right amount, at the right time, in the right place, at the right price, and being able to prove it.


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... you own a restaurant.
The quick, bare-bones answer: the ACA requires restaurants and small businesses with 50 or more full-time employees to provide those employees with access to health insurance. It gets trickier from there.

That insurance simply needs to be “minimum essential coverage”—an expression with no exact definition—and “full-time” means 30 hours a week, not an industry standard by any stretch. If businesses don’t provide this, they can incur a penalty. After catching flak from the National Restaurant Association and other industry groups, employer-mandate compliance has been pushed back a year, to 2015.

Own more than one location under the same company? Those employees count collectively. Even breaking that company up into smaller, 49-employee entities won’t likely work, nor will filing a 1099 Miscellaneous Income tax sheet for each employee.

“There aren’t many clever ways out of this,” says Carl Pilger, vice president of legal counsel for Digital Insurance. “If you are controlling the means and ways of work, you’ll be responsible.”

If you hit the 50 full-time employee threshold in, say, 2015, you won’t be responsible for providing insurance until 2016. Even then, you’d only be considered an “applicable large employer” if you averaged 50-plus full-time employees over the 12 months of 2015. Even if you fall under the threshold, there are still new regulations to follow. Among other things, starting this month, all employers covered by the Fair Labor Standards Act are now required to inform their employees—in writing—how to access the public health insurance exchange.

Then again, this all applies to a very small sliver of the population, since 96 percent of U.S. businesses have fewer than 50 employees.

And if you want to provide health insurance and own a restaurant with fewer than 25 full-time employees whose average earnings fall below $50,000 a year, you’re eligible for a small-business tax credit.  The catch there is that you have to pony up at least 50 percent of your employees’ premium costs.


... you are about to turn 26.
Congratulations! Hopefully you’ve taken advantage of the ACA provision that allows you to stay on your parents’ insurance a few years longer than before.  You weren’t alone: 357,000 other Texans gained health insurance from their parents, too.

But now you’re about to hit the big 2-6, and you need your own insurance. Starting in January, if you don’t have a job that offers health insurance, you’ll be able to purchase coverage through the exchanges. If you make $43,000 or less, you’ll receive a tax credit to help offset the cost. Or you can roll the dice with a catastrophe plan, which covers essential health benefits and a few primary-care visits a year. The up-front cost is lower, but emergencies will cost you.

You could forgo insurance altogether, too. If the cost of insurance is higher than 8 percent of your income—even with tax credits—you’re exempt. If you can afford coverage and you simply choose not to buy it, the feds can charge you a penalty: $95 or 1 percent of your taxable income, whichever is higher. That penalty climbs quickly to $695 by 2014. But there’s a catch. The ACA specifically states that the IRS is forbidden from using aggressive tactics to collect the penalty. It can withhold your tax refund, though.

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... you are a senior citizen.
Coordination of care—an issue that naturally grows more complex with age—will ideally become better, causing less overmedication and harmful drug interaction. As with many groups, more preventive care is also covered free of charge: a yearly wellness visit; cancer, cholesterol, and diabetes screenings; diet counseling. In Texas, 1.8 million Medicare recipients used one or more free preventive services in 2012.

Financially, the ACA affects both individuals and Medicare as a whole.

Increased funding for the Health Care Fraud and Abuse Program—which has recaptured $14.9 billion from swindlers in the past four years, $4.2 billion in  fiscal year 2012—will hopefully extend the life of the Medicare Trust Fund, which is expected to be exhausted in 2026. The ACA removed $716 billion from Medicare, mostly in hospital reimbursement and cutting Medicare Advantage costs.

The government hopes to shift some of those Medicare Advantage seniors to Medicare, where lower prescription drug prices await. Medicare Part D users who reach the coverage gap—the “doughnut hole”—in 2013 will receive a 52.5-percent discount on brand-name drugs and more than a 20-percent discount on generic drugs while in the coverage gap. Those discounts will continue to grow until 2020, when the gap is eliminated completely.

Because of this shrinking of the coverage gap, the feds estimate that the average Medicare beneficiary in Texas saved $680 on prescription drugs in 2012.


... you are an undocumented immigrant.
Nothing. You’re still screwed.