The reform law, called the Affordable Care Act (ACA), is poised to change a health insurance system previously dominated by employer-based coverage.
ACA’s prime measures take effect Jan. 1, 2014.
Under ACA, employers must decide whether to “pay or play” — pay a penalty to the federal government or offer employees full coverage of a government-determined essential health benefit.
“(Employers) are literally looking at the penalty and the benefit of providing these insurance benefits to their employees versus paying the penalty,” DeNarvaez said.
Consumers, if they have no health insurance, must either find coverage through an insurance exchange or qualify for Medicaid if applicable — or also pay a penalty to the federal government.
“We’re the only developed country ... that does not have universal or near-universal coverage,” DeNarvaez noted.
She stressed one of ACA’s core talking points was getting health insurance for the uninsured, but added both Tennessee and Virginia are struggling with decisions on whether to expand their Medicaid programs to help more low-income people.
Attorney Al Holifield, who advises employers about ACA, said 50 percent of uninsured individuals live in six states: California, Florida, Georgia, Illinois, Texas and New York.
The current health care system, DeNarvaez said, also spends 50 percent of its dollars on the sickest 5 percent of the population.
Costs from uncompensated care are being passed on to those with health insurance, according to DeNarvaez.
“Over the long period, we need to start dealing with population health,” she said.
ACA’s health insurance exchanges are new marketplaces for consumers and small businesses. The exchanges can either be run by the state or federal government. Both Tennessee and Virginia, however, opted out of running a state health insurance exchange, which offers a range of coverage options.
“If you talk to people in the state governments, they wrestled with ‘What’s the incentive for us to do our own exchange?’” Holifield said. “The answer is they really couldn’t find one. I think that’s why you see the majority of the states opting out.”
Holifield also said ACA still faces ongoing litigation despite last year’s U.S. Supreme Court ruling upholding it.
He cited arts-and-crafts retailer Hobby Lobby’s attempt to defy ACA regulations by refusing to comply with requirements to provide employees with insurance coverage for emergency contraception.
“You would think all the questions (about ACA) have been answered, but they haven’t,” Holifield said.
For more about ACA, go to www.healthcare.gov.