Indiana’s economy continues to outpace the national average for private sector job growth. The hard work from Hoosiers and the General Assembly to make Indiana the envy of the nation has led to numerous business accolades and distinctions. Other states have taken notice of the policies enacted and the positive results of employers looking to locate and start a business here.
With all the positive news surrounding our state and the accomplishments made, I cannot help but feel that these leaps and bounds in the right direction are being negated at the federal level by looming health care mandates from the Affordable Care Act (often referred to as Obamacare). With 2014 quickly approaching - the date for implementation of individual and employee mandates - we have seen more and more large employers across Indiana scramble to find a way around this new law.
As part of this health care overhaul, any company with more than 50 full-time employees must offer health care coverage. The offered plans must meet an adequate standard, set in the law, or face a fine of $2,000 for every full-time employee beyond the first 30 employees. Logically speaking, if a company cannot afford to offer insurance or simply does not want to, they have two options: they can downsize to less than 50 employees or they can cut the hours of their existing employees down to part-time.
In fact, schools throughout Indiana are cutting the hours of coaches, teachers’ aides, bus drivers, cafeteria workers and other support staff in an attempt to avoid having to offer them health insurance. Lafayette School Corporation has already reduced the hours of over 600 employees. Unlike companies who produce goods and services, schools cannot easily increase their income by raising prices in order to cover this new cost.
Additionally, just last week, officials in Floyd County announced their intent to scale back the hours of part-time county workers who now work 34 hours. By giving these employees less than 30 hours a week, it would exempt Floyd County from the employer mandate. These examples offer just a glimpse of what is beginning to occur in Indiana and across the nation, and I worry that these scenarios will quickly become the rule, not the exception.
Having explained these shortfalls, criticism is only constructive when an alternative is offered. In 2008, Indiana came up with its own solution to the high level of concern surrounding the price of health care. We created the state sponsored Healthy Indiana Plan (HIP) to offer affordable health insurance plans to individuals aged 19-64 who do not have access to health insurance through their employer. This plan was approved by the federal government through a waiver to transfer Medicaid dollars to include more individuals.
This has made health care more accessible, particularly to low-income Hoosiers. In order to be eligible, Indiana residents must earn less than 200 percent of the federal poverty level and not be eligible for Medicaid. Participants are required to make monthly contributions toward coverage based on percent of gross family income. With the creation of HIP, we became the first state in the nation to offer this sort of amendment to Medicaid.
While I can commend and support the intent of wanting to help low-income Americans obtain affordable health care, I fear that in the execution of this federal mandate, there are many unintended and undesirable consequences. Michael Hicks, an economist at Ball State University explained it well when he stated that the reduction of hours will hurt the same unskilled workers who suffered the most during the recession. Higher-income workers already have health care benefits from their employers and will remain largely unaffected.
I value your input and want to know where you stand on the pressing issues facing our state and our nation. This is particularly important as we begin interim study committees. With my background in health care, I have been appointed to the Health Finance Commission as well as the Medicaid Advisory Committee, where I am sure this federal legislation and its impact on Indiana will be discussed.
Your civic involvement on these issues will be an essential part of the process. Please, feel free to connect with me on my website at www.in.gov/h75 or by phone at 317-232-9674. I look forward to your feedback.