WILKES-BARRE — Insurance agent Britt Trumbower has a simple solution for small governments and businesses to weather the changes coming as the result of the federal Affordable Health Care Act.
Drop health care coverage.
Trumbower, owner of Small Business Insurance Services Inc., said that by guiding employees to seek their own health care coverage using online marketplaces, formally known as the exchange, administrators for groups between two and 50 workers can pass some of the health care cost savings on to their employees who also may be able to take advantage of federal subsidies. Sign-ups under the exchanges starts Oct. 1.
At a dinner meeting downtown on Wednesday, Trumbower explained to a group of about 15 members of Luzerne County Association of Boroughs and Townships what to expect when the act, often called Obamacare, goes into effect Jan. 1.
The federal health care insurance reform plan uses a tier system with platinum coverage offering the lowest deductibles with the highest premium at one end and a bronze plan keeping premiums down with higher out-of-pocket expenses at the other. In between there are gold and silver plans.
A single person seeking coverage who earns $25,000 or less annually can buy individual coverage on a marketplace for about $144-per-month on the silver tier, according to the Kaiser Family Foundation online subsidy calculator.
This could be useful in Northeastern Pennsylvania, where average wages are typically lower than other parts of the state, Trumbower said.
Trumbower, whose firm is based in Bear Creek Township, has about 150 clients of varying sizes and includes some school districts. He crunched numbers using his clients to represent how businesses will be affected if they buy employee coverage.
According to his study:
• 1.4 percent of his clients will see a decrease when paying for employees’ health care.
• 6.8 percent will have up to a 20 percent increase.
• 46.3 percent will have a 20 percent to 50 percent increase.
• 45 percent will have a 50 percent or more increase, with about 10 percent of that group seeing costs rise by more than 100 percent.
Speaking to the municipal leaders, Trumbower said pooling resources with other municipalities could result in a better rate, but that would call for conditions that might not be feasible.
The governments would probably have to form a board of directors to administer the joint plan, limit their offerings to avoid complications and, most of all, they’d have to agree.
“That’s a lot of different groups to come together and agree on this,” Trumbower said.
Policies started before Jan. 1 are allowed to continue until they expire in 2014, so as long as a company or government renews its plan before the deadline, it can continue for at least another year to allow for more planning.
Mary Susan Riccetti, Dupont Borough assistant administrative assistant, predicted an onslaught of problems in January and wondered why they’ve received no support as the online markteplaces that start up Tuesday.
“I think a lot of people aren’t going to be able to do it,” Riccetti said. “We’ve had no guidance on how to set it up. No nothing … I’m amazed.”
Trumbower discredited Republican efforts being made now in Congress to pull the rug out from under the act, signed into law in 2010, by de-funding it.
“I really don’t think the de-funding issue is going to hold water,” Trumbower said.