The Richmond Register

August 28, 2013

Business owners, residents testify on the possible effects of Obamacare

By Sarah Hogsed
Register News Writer

LEXINGTON — On Tuesday, a congressional field hearing was conducted in Lexington concerning how the new health care law will affect job creators and others in Kentucky.

Several Kentucky members of Congress were part of the subcommittee hearing, including Rep. Andy Barr, who represents Richmond as part of the Sixth District.

Wednesday’s edition of the Register featured an article focusing on the testimony of John McPhearson, CEO of Madison County’s Lectrodryer plant.

The testimony of the other seven panelists is featured into today’s paper.

Tim Kanaly, owner and president of Gary Force Honda in Bowling Green and Dixie Car Sales in Louisville:

Kanaly testified that he has struggled with understanding what new requirements his companies will face the Affordable Care Act. His two businesses individually have less than 50 full-time employees, but together they have more than 50.

The law requires that businesses with more than 50 full-time employees offer them health insurance or face a penalty.

Kanaly said he currently offers his employees in Bowling Green health insurance, but the Louisville business is new and he cannot, at this time, offer the benefit.

Kanaly testified that he talked to his insurance agent, accountant and even contacted Rep. Brett Guthrie’s office but has yet to find a definite answer.

“It concerns me deeply that no one can answer my basic question,” Kanaly said.

Joe Bologna, owner of Joe Bologna’s Italian Pizzeria & Restaurant:

Bologna said he has “always cared about  his employees,” and he has offered health insurance to his full-time employees. About 10 are using that benefit, he told the congressmen.

However, because of the downturn in the economy, more people are choosing to save money by not eating out. This has hurt his restaurant’s profits, he said.

Bologna has cut back on employees and since April has closed his restaurant on Mondays. He also said he will not hire more than 50 full-time employees so as not to be subject to the ACA’s requirement to offer all workers with more than 30  hours a week health insurance.

“I feel Affordable Care (Act) causes less jobs,” Bologna said.

John Humkey, president and founder of Employee Benefit Associates Inc., Lexington:

Humkey said one of the biggest problems with Obamacare was the new way community health ratings are formulated. Previously, insurance companies could base its premium prices on things like a person’s gender, age, family composition, industry of employment and tobacco use.

Under the ACA, many of those categories are not allowed to be considered, including gender. Women have usually been charged higher rates because statistics show they utilized healthcare more than men.

The rates for young males and healthy individuals will increase to subsidize the healthcare costs of women and the unhealthy, Humkey said.

Humkey also noted that the wellness incentives under the ACA do nothing to benefit healthy individuals.

Obamacare also requires that all insurance plans provide pediatric, dental and vision care, services that will increase the cost of insurance for everyone, Humkey said.

He predicted that young males and healthy people will opt not to have insurance and accept the monetary penalty, shrinking the number of people in the health insurance pool.

“This law, in my opinion, picks winners and losers,” Humkey said. “... No matter how fair (the law) seems on the surface, it’s not fair if it prices people out of the market.”

Carrie Banahan, executive director of the Office of the Kentucky Health Benefit Exchange, Frankfort:

Bonahan told the four congressmen that the Affordable Care Act will provide “substantial” improvements to Kentuckians’ health. Currently, 640,000 residents lack health insurance coverage.

Those people who are uninsured often wait to address health problems, and then end up in hospital emergency rooms needing “costly and complicated” care, she said.

She noted that two-thirds of bankruptcies are caused by medical bills.

“Just one visit to the ER can put a deep hole in a family and individual’s household budget,” Banahan said.

The state’s healthcare exchange is well on track to being open Oct. 1, Banahan testified. Her office also is working to inform Kentuckians about the new health coverage that will be available to them under the Affordable Care Act, using advertisements and direct consumer engagement by trained counselors.

The website for the Kentucky Health Marketplace Exchange will be accessible online at www.kynect.ky.gov. A call center also was opened Aug. 15.

Janey Moores, president and CEO of BJM & Associates Inc., Lexington:

Moores said earlier this year she received a call from her insurance agent, who informed her that the insurance she offers her employees is projected to have a premium increase of 95 percent next year.

She said the ACA is having a “horrific impact” on small businesses.

“This will be a death for many businesses across the country,” Moores said.

She noted that the country is losing well-paying manufacturing jobs and only low-wage job openings remain, making the United States “a nation of part-time jobs.”

“No one can deny the toxic ingredient in our job market is the so-called Affordable Care Act,” Moores said.

She also called the law “unconstitutional.”

“I never thought I’d see the day my own government would work day and night to put me out of business.”

Donnie Meadows, vice president of human resources, K-VA-T Food Stores, Abingdon, Va.:

Meadows said K-VA-T, which operates under Food City grocery stores, employs a total of 13,000 people. The company employs 1,500 in Kentucky.

Many of those workers are part-timers by choice, Meadows said. However, under the ACA, anyone who works 30 hours or more a week must be offered health insurance.

Meadows said it has been difficult to compute who meets that threshold because grocery workers work around-the-clock, flexible and varying schedules.

Meadows said it would be impossible to offer employees working 30 hours health benefits without having to raise the premium costs for full-time workers who are on the company’s health insurance.

Meadows expressed hope that legislation currently before the House may offer small fixes to the ACA that will address some of these problems. One bill alters Obamacare’s definition of full-time employees, bringing it “in line with actual work environments,” he said.

Another bill could repeal the “mandatory enrollment” aspect of the health care law. Instead of full-time workers being automatically placed in employee health care plans, they will instead have to “opt-in” under the proposed legislation.

Debbie Basham, Southwest Breast Cancer Awareness Group, Louisville:

Seventeen years ago, Debbie Basham was diagnosed with third-stage breast cancer. Doctors told the 44-year-old she’d have less than a year to live after chemotherapy didn’t fight off the disease.

However, under her husband’s health insurance, she was able to enroll in an experimental treatment that worked.

But after the battle with cancer was won, Basham found she had another battle to fight – $200,000 in medical bills.

“No longer did we have financial security in our lives, but I had learned how important health insurance was to my survival,” Basham testified.

Basham said she can often tell which women in her support group will live and who would die based on the type of health insurance they have, if they have any at all.

“I’ve held crying women in my arms, knowing they were doomed,” Basham said.

She shared several stories of women who had battled cancer. Some had survived, others didn’t, but many of them shared the same stressful experience of overwhelming medical bills.

Some, including Basham, were dropped by their health insurance companies after reaching their lifetime payout limits. After she was dropped, Basham could not find a company that would insure her.

Under the ACA, insurance companies cannot impose lifetime limits or deny coverage.

Sarah Hogsed can be reached at shogsed@richmondregister.com or 624-6694.