The failure to repeal and replace the Affordable Care Act continues to be a major political story, as politicians indicate they will continue their attempts to kill Obamacare. The status of the ACA is also a business story. No matter what industry you cover, health care is an issue: Employers are the primary venue for delivering health insurance. Here are some of the considerations—and some of the places to look for stories.
In HR, a rule of thumb is that total employee benefits run 25 percent to 40 percent of annual base salary, according to Joseph Hadzima, a senior lecturer at the Sloan School of Management at MIT. Of that, anywhere from 4 percent to 14 percent goes to health insurance.
The rising cost of insurance impacts an employer’s bottom line. And any changes in the health care bill could have a significant impact on insurance rates, both generally and by group. According to the Congressional Budget Office, the proposed (and withdrawn) American Health Care Act could have increased premiums for a large segment of the population. Once younger and healthier people were no longer penalized for forgoing insurance, there would be a smaller number of people paying premiums. Without a major reduction in the overall needs for care, older people would face disproportionately elevated rates.
If premiums were increased, would companies cover smaller percentages of them, passing on costs to employees? Or would they cover the higher costs by raising the price of their goods or services, potentially affecting sales? The specific details of any legislative changes going forward will be important to follow.
Employee recruitment and retention
Health insurance became an important tool for recruiting and retaining employees starting in World War II. If companies reconsider how to divide the expense of health insurance between employees and themselves, it could become an even more significant recruitment device. As the labor market tightens, benefits are critical to attracting talent.
Look for companies that stress how much they support employee health. Relatedly, look for companies deemphasizing their health plans. You could run a survey or do a series of interviews among employees in a given sector to see how important they’ve found health insurance access through work.
Impact on startups and small companies
As a result of the ACA, some smaller companies pushed employees to the exchanges for coverage. A number of insurers pulled away from the exchanges because the cost of providing care was higher than expected. If minimum coverage requirements are eliminated, even fewer healthy individuals will go to the exchange for their policies. That would worsen the picture, driving even more insurers from the exchanges, further reducing competition and increasing prices.
You could ask companies that encourage employees to use the exchanges how the system’s evolving structure impacts their retention strategy. Ask employees who were pushed into the exchanges how they feel towards their employer and whether they’re still satisfied with their coverage. Ask recruiters whether they see an uptick in job hunters looking to move from smaller companies to larger ones with better coverage.
Health care industry consequences
If you cover the industry itself—even local hospitals and doctors—you have an unending stream of material. Hospitals could take a massive financial hit. They gave up subsidies when they were promised an increase in patient coverage, and those subsidies could disappear. Will organizations continue working on the types of technology the ACA conceived might help control costs? For example, under the ACA there was a push to digitize medical records in order to enable more efficient interchange of patient data.
What will happen to the local job market if hospitals cut back on doctors, nurses, pharmacists and others? How might the dynamics between care providers, insurance companies and corporations change? There are currently incentives to have different care providers work together to offer more effective, cost-efficient care for Medicare patients. The drive for a more effective overall care system could be undermined as organizations cooperate less and compete more.
Such stories and topics will be ongoing. While the ACA remains in place, you can follow its developments over time. Should changes come into place, you have another series of stories. Health care will be a business journalism gift that keeps giving.