STANISLAUS COUNTY — New health insurance mandates will take effect soon, but Stanislaus County business owners still are trying to figure out what Obamacare means for their companies.
More than 150 business leaders recently attended a Modesto forum on the Affordable Care Act, where they were warned the new federal requirements are complicated and in flux.
"A number of things still are up in the air and to be decided," said James Bennett, a health insurance expert from the Word & Brown General Agency. "Everybody seems to have a different interpretation (of the new requirements), which is one of the problems."
Bennett said all businesses with 50 or more full-time employees will have to offer health care benefits in 2014, but many smaller companies with part-time or seasonal workers may be required to cover their employees.
Complex formulas based on how many hours and how many days each employee works will be used to calculate what employers must offer. The government will be "looking at every possible way an owner can game the system," Bennett warned, so every business must start carefully tracking its work force.
Even companies that always have provided employee health benefits will be affected by the law because it expands coverage requirements.
For example, Bennett said, all health insurance will have to start covering mental health and substance abuse treatments, including things such as the cost of methadone for heroin addicts.
Those expanded coverage costs and who ultimately picks up the tab are being hammered out.
Bennett said out-of-pocket expenses for health care will be capped at about $6,400 a year for individuals and $12,800 for families.
Insurance costs in Stanislaus County, however, will be higher than in most other parts of California. Last month, the Affordable Care Act's Covered California Health Plans which will offer insurance to those not covered by their employers unveiled how much they will charge in each of the 19 regions.
Stanislaus, San Joaquin, Merced, Mariposa and Tulare counties are combined into "rating region 10." Only four insurance companies have agreed to serve those counties Anthem (Blue Cross), Blue Shield, Kaiser Permanente and Health Net.
Those companies will charge this region's residents significantly more than what people in Los Angeles and elsewhere will be charged.
For instance, the lowest premium a 40-year-old Stanislaus resident will have to pay for the cheapest insurance plan will be $223 per month. But if that same person lived in Los Angeles County, the monthly cost would be $188. That's a $420 per year difference.
The price disparity will be even greater for people choosing high-end plans. For 40-year-olds, the highest priced insurance in Los Angeles will be $388 per month, but the same coverage in Stanislaus will cost up to $508 per month. That's $1,440 more per year.
The premium difference is because Stanislaus residents generally aren't as healthy as those elsewhere, according to Peter Anderson, Sutter Health's senior vice president for strategy and business development.
"Stanislaus County has a pretty heavy health burden, vis-à-vis the rest of California," said Anderson, noting that residents here are more likely to be obese or have diabetes, congestive heart failure and coronary artery disease.
Many costs 'self-inflicted'
Anderson said insurance companies must charge higher premiums to cover the expected cost of serving people in regions with more health care needs.
When people make poor choices such as eating fatty foods, drinking sugary drinks, smoking tobacco or sitting around rather than exercising their health care needs go up.
"Fifty to 70 percent of health care costs are not necessary. They are caused by lifestyle choices," Anderson said. "A lot of costs in health care are self-inflicted."
Example: 18 percent of Californians smoke cigarettes, but Anderson said state lawmakers forbid insurance companies from charging smokers higher premiums than nonsmokers.
"Twenty percent of people consume 80 percent of health care costs," Anderson said.
But the Affordable Care Act spreads costs across the population.
One way that will be done will be to charge people of different ages different amounts for health insurance.
"Each person will be rated based on their own age," Bennett said. Young adults typically have far fewer medical needs than senior citizens, but Obamacare will forbid insurance companies from charging sen-iors premiums more than three times higher than what young adults pay.
"So expect the younger age rates to be higher (than they are now) and the older age rates to be lower," Bennett said.
Many people won't be able to afford the new insurance rates, even though the law requires virtually everyone to get coverage.
The government expects to provide insurance subsidies for 108,000 lower-
income people in Stanislaus, San Joaquin, Merced, Mariposa and Tulare counties.
"The whole system has to be paid for somehow," cautioned Clive Grimbleby, president of Grimbleby Coleman CPAs. "Higher-
income folks are going to pay additional money to support the health care system."
Grimbleby told business owners there will be a new 0.9 percent Medicare tax on people who earn $200,000 or more per year, plus an additional 3.8 percent tax on investment income.
And for people who get money to help with their health care costs, Grimbleby said, the Internal Revenue Service will be watching. If their incomes go up, those people may be forced to refund the subsidies.
For more information about the Affordable Care Act and insurance requirements in California, go to the Covered California website, www.coveredca.com.
Bee staff writer J.N. Sbranti can be reached at firstname.lastname@example.org or (209) 578-2196.