LMH working to prepare for 'Obamacare' insurance exchanges, but questions aplenty remain
Wednesday, May 15, 2013
There are still a lot of details even the top officials at Lawrence Memorial Hospital don’t understand about the new system of buying health insurance under the federal Affordable Care Act.
But Joe Pedley, LMH’s chief financial officer, believes one concept for consumers is abundantly clear.
“People had better learn how to do math,” Pedley said.
LMH’s board of trustees received a briefing Wednesday morning on how the hospital is preparing to exist in a world where large numbers of patients may begin buying their health insurance through a federal exchange created by the law commonly known as “Obamacare.”
The exchanges are scheduled to begin selling insurance as soon as Oct. 1, but hospital leaders were told Wednesday that LMH and other health care providers still are waiting to receive some basic information.
In Kansas, it is still not known which insurance providers will participate in the federal exchange, LMH officials said. Furthermore, hospital officials aren’t sure when they’ll know those companies.
“At this point, I’m guessing we’ll know by Oct. 1,” Pedley said.
But Pedley told hospital board members that it is clear that consumers will have a lot to become educated on — especially on financial matters related to what insurance plans they may want to buy on the federal exchange. Pedley said he’s not sure many consumers understand how much the federal government plans to subsidize the purchase of health insurance.
According to information Pedley received at a recent conference on the act, he said the act will limit the amount of premiums many families will pay for health insurance in any given year.
Based on the information, a family of four that has a household income of $50,000 would pay no more than $3,150 in annual insurance premiums — or $262.50 per month — if they purchase insurance through the exchange.
The premium amounts are governed by how the family’s income compares with the federal poverty level set by the government. According to the information provided by LMH, families with income less than 133 percent of the federal poverty limit — $31,322 for a family of four — would pay no more than 2 percent of their income in health insurance premiums. Other categories include:
• Families at 133 percent to less than 150 percent — up to $35,325 or a family of four — capped at 3 percent.
• Families at 150 percent to less than 200 percent — up to $47,100 for a family of four — capped at 4 percent.
• Families at 200 percent to less than 250 percent — up to $58,875 — capped at 6.3 percent.
• Families at 250 percent to less than 300 percent — up to $70,650 for a family of four — capped at 8.05 percent.
• Families at 300 percent to less than 400 percent — up to $94,200 for a family of four — capped at 9.5 percent.
Individuals and families won’t be required to purchase insurance through the new federal exchange, but hospital leaders are trying to figure out how many area residents may choose to go that route.
“One of the big unknowns is how many small businesses will drop their insurance and have their employees go out and purchase insurance on the exchange,” said Janice Early, director of community relations for the hospital. “We’re trying to figure out how many people may be using this in Douglas County, but it is a really hard number to process.”
LMH leaders are keeping a close eye on the exchange because they want to ensure that if area residents purchase through the exchange that they are purchasing a plan that has LMH as a covered hospital.
Early said the hospital is in the process of developing a marketing plan aimed at providing information to area residents about the insurance exchange system. She said since the state chose not to create its own exchange — but rather use one created by the federal government — hospital leaders are uncomfortable that the federal government will do an adequate job educating area residents about the system.
“We feel like we do need to take a bit of a leadership position on educating people in the area,” Early said.
In other LMH news, board members approved a 2 percent raise for hospital president and CEO Gene Meyer as part of his annual evaluation.
With the raise, Meyer now will make $463,802 per year. The 2 percent raise was the same across-the-board pay increase that all LMH-employees received this year.
Board members cited the hospital’s inclusion in the 100 Top Hospitals list by Truven Health Analytics and the hospital’s strong assessments from The Joint Commission, one of the nation’s leading accrediting agencies for hospitals.
The board consulted several hospital compensation studies to confirm that Meyer’s salary was in line with other similar hospitals.