Deciphering new health care reform

By Joe Goldeen
Record Staff Writer
June 12, 2010 12:00 AM
STOCKTON – More often than we’d like to think, health care decisions are based on economics over any other rationale.


So, when it comes to understanding the new health care reform rules, it makes perfect sense to consult an accountant for advice.


The Patient Protection and Affordable Care Act that was signed into law March 23 impacts individuals, families, the self-employed, regular employees, small-business owners and large corporations. And all in different ways.


Health insurers and providers such as hospitals and physicians are scrambling to learn about the new law and make the best of it for their own bottom lines. So should individuals and small-business owners, according to the American Institute of Certified Public Accountants.


Enter Christopher Bell, a certified public accountant, part-time college accounting instructor and consultant to physician groups who splits his time as a tax manager between accounting firm Moss-Adams LLC’s Stockton and Rancho Cordova offices.


“There is a lot that is undefined” in the new health care reform law, Bell said.


“People need to be more aware of what their options are and plan for that. Be more aware of what was spent in prior years. And get insurance – even if it’s just catastrophic care insurance,” Bell said.


He expressed particular concern for young adults who are the most likely to be uninsured at a time when they engage in some of life’s most risky activities and behaviors.


“Catastrophic care insurance limits your maximum risk to just $5,000 to $10,000,” Bell said.


“Health care reform gets rid of lifetime spending limits. That’s very important for people with chronic illness. With a cancer diagnosis, you can blow through $1 million very quickly,” Bell said.


“But with that, there are now additional costs in the system. That’s some of what we are seeing now (with increased premiums). Insurers are trying to figure out their numbers and how to spread this out,” he said.


“The biggest thing we don’t know is how businesses are going to respond to the new landscape,” Bell said. He noted that even before reform, most businesses offered some form of health insurance to workers even though annual premium increases forced many to offer fewer options, put more of the burden on employees or drop out completely.


Over the past decade, average annual family premiums for workers at small firms increased by 123 percent, from $5,700 in 1999 to $12,700 in 2009, according to the U.S. Department of Health and Human Services. Meanwhile, the percentage of small firms offering coverage fell from 65 percent to 59 percent.


The Affordable Care Act does not include an employer mandate. In 2014, the law will require large employers to pay a shared responsibility fee only if they don’t provide affordable coverage and taxpayers are supporting the cost of health insurance for their workers through premium tax credits for middle- to low-income families.


According to HHS, the law specifically exempts all firms that have fewer than 50 employees – 96 percent of all firms in the United States – from any employer responsibility requirements.


These firms employ nearly 34 million workers. More than 96 percent of firms with 50 or more employees already offer health insurance to their workers, HHS reported, so less than 0.2 percent of all firms may face employer responsibility requirements.


The federal government believes that many firms that do not currently offer coverage will be more likely to do so because of lower premiums and wider choices.


An estimated 4 million of the nation’s small businesses may qualify for a small-business tax credit this year under the new law. Over the next 10 years, the credit is expected to provide $40 billion in relief for small businesses.


Contact reporter Joe Goldeen at (209) 546-8278 or Visit his blog at


Published on 12/06/2010 09:11:09