University’s costs will grow, but question is, ‘How much?’
A key component of the Affordable Care Act rolls out today, but the law won’t start to affect USC directly for more than a year.
Health insurance exchanges open today, meaning Americans can apply for coverage on state or federal “marketplaces” designed to compare prices and options. Americans will be required to have health insurance starting Jan. 1, but USC says the date it’s worried about is further out.
Starting Jan. 1, 2015, large employers like USC will be required to offer full-time employees insurance, which Chief Financial Officer Ed Walton said in an email is “especially worrisome because it requires estimates, and all the estimates are high.”
How high is uncertain, but this much is clear: The law, better known as “Obamacare,” will prove costly for USC.
The costs will likely grow by 10 percent or more, according to Walton. But for now, estimates of “Obamacare’s” impact are guesses, said Chris Byrd, vice president for human resources. USC doesn’t expect to have a firm estimate for a few months.
The university said in its annual budget that the law would cost more than $24 million over three years. But after the budget was approved in June, the requirement on employers was delayed one year.
“There will be a cost to us as a university, but in terms of the exact dollar amount, we don’t know,” Byrd said.
The exact price tag depends on what policies the state decides to offer and how many more employees USC has to provide insurance for, Byrd said. Currently, 6,900 employees throughout the university system are eligible for coverage, costing $34 million last year, according to Byrd.
The university has already started asking the state legislature to ease the burden of rising health care costs.
At his State of the University address last month, USC President Harris Pastides asked legislators to help pay for health insurance, state-mandated raises and growing energy costs.
Byrd said he thinks it’s “reasonable” to ask legislators to cover part of the law’s implementation, which has been unpopular in state politics since it was passed in 2010.
“It’s on everybody’s radar that there is going to be a cost,” Byrd said.