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How Is Obamacare Affecting TPM?

Aptopix-health-overhaul-sebelius
AP Photo / J. Scott Applewhite

First, a little background. TPM currently has just over 20 employees. And they're employed in two different jurisdictions - New York and Washington, DC. We pay 100% of the premiums and we provide pretty solid coverage. Not cadillac coverage, but solid coverage. I mention this because I think it plays a pretty key role in what our experience has been.

So far, I can only speak about the situation in New York. And the upshot is that to go into the most comparable plan to our own, which is in the Gold category on the New York State exchange, would be a small increase in what we pay per person, about a $14 increase per month. In nominal terms, that's a price hike. But when I normally hear people talking about this stuff, I wonder if the people talking about it have ever purchased a group plan. Because in recent years I don't think we've ever had a year when the prices didn't up by double digits year over year - often significant double digits. Like 30%. So the price going up $14 bucks a person seems like a savings.

So, in those terms, it seems arguable that Obamacare may have already saved us money since the increase is nominal compared to last year.

A few issues probably play into this result.

One is that we're in New York State. The exchange works well. It's also a fairly high regulation state, which I suspect means that things aren't changing as dramatically here as they are in some other states.

Second, in recent years we've participated in a state program called 'Healthy New York' which helps small businesses purchase health care coverage for their employees. (One interesting sidelight, we pay more for this 'subsidized' policy in New York than we pay for comparable coverage in DC where there's no similar program. Go figure.) That program is now being phased out as Obamacare is phased in. It's private insurance (we currently have Oxford/United Health Care). But the rates are subsidized in some fashion or another by New York state. Otherwise we would have paid more. And if we had, this new rate likely would have represented a significant decrease in our premiums.

As a political matter, the President and the Democrats have to deal with the fact that some people are having to pay substantially higher premiums for coverage. But when I hear the details of these stories, I'm often astounded at just how little these people were paying. I've read news stories about people well into middle age or near retirement paying around $150 for coverage. That's astounding to me. We have mainly young employees but we pay more than three times that amount per month per employee. Some of that is simply because it's important to us as a company to provide real coverage. But New York already has a pretty substantial regulatory framework. And I suspect that makes it harder to sell junk policies even if we wanted to go that route. In any case, I wonder just what these people were paying for.

So that's the upshot. We're just one small business. But at least on year one in New York State, Obamacare seems to basically be a wash for us in terms of premiums versus last year. However, it's arguably saving us money since this will be the smallest year over year premium increase since we bought our first group policy back in 2005.