Steve Rose

Health care rate hikes give a real Obamascare

I just got a real Obamascare.

In my other world, I co-own a business with 18 employees, nearly all of whom are full time.

We have had excellent health coverage, and what we spend each month currently is pretty generous.

Our insurance broker just met with me, and here was his update on where the company stands with its upcoming renewal.

If we renew by Dec. 1 of this year, we will be able to forestall most of Obamacare’s impact on our rates until a year later, because Obamacare goes into effect Jan. 1, 2014. A year from now, however, it could get really ugly.

Starting in December, our rates will increase 11.6 percent. Of that, 3.75 percent was attributed to costs of the Affordable Care Act, otherwise known as Obamacare.

These new increased rates are based on the old rating system where our group was rated on its health status, employees’ gender, age, type of company and location of the business.

That’s a hefty increase, but when I look at the alternative scenario under Obamacare, it makes my hair stand straight up.

Under Obamacare, next December, if we stay with our same insurance company, our broker projects our rates would soar 37 percent.

As a company with fewer than 50 employees, Obamacare will force us to use a new community rating service to determine our rates.

The Obamacare way of using a community rating system for companies under 50 full-time employees considers only age and location of the business, without regard to health status, gender, or other factors (also without considering pre-existing conditions).

Said the broker, “Using the exact same census, the community rates will cause our rates to soar.”

We plan to get a second opinion, of course, and to do more due diligence. But we have bought ourselves a year to discover whether there is a better deal under Obamacare, including possible tax incentives.

No insurance broker can, at this point, claim to be a total expert, when the 2,000-page law has thousands of regulations.

A plan as radical as Obamacare is bound to make winners and losers. According to our broker, we will become one of the big losers. It is doubtful we can become winners.

Obamacare skeptics can have a heyday when they read about the plight of some small businesses like ours that could take it on the chin.

But I am still willing to keep an open mind.

This nation did need to do something to cover the 40 million Americans without health insurance, and to achieve that may have necessitated a complex change.

A year from now, we’ll all have a fairly good idea whether the Affordable Care Act is really affordable.

If it is not, and nearly everyone’s rates rise, or if millions of Americans are forced to change plans — a direct contradiction of what was promised by President Barack Obama — then it will be time to look at dramatic modifications to the law.

Chances are, insurance companies will come up with clever new ways to deal with companies like ours and to handle all those who have received cancellation notices, as well as others whose plight under Obamacare seems hopeless.

It just is too early to make any certain declarations about a law that is so complicated.

In a year, I’ll review what has happened to one small business. I have a feeling there will be a new, acceptable plan that will lessen the blow. If not, it means big trouble for Obamacare.