Some aspects of the landmark Patient Protection and Affordable Care Act and how they might affect nonprofits are certain, such as a small employer tax credit and required community health assessments for hospitals. Other areas affected are less clear as nonprofit leaders keep an eye on reaction to the historic measure. Already, 14 Republican state attorneys general are challenging its constitutionality. President Barack Obama signed healthcare reform legislation into law two days after it passed the House of Representatives. It was approved by a 219-212 vote.
The Washington, D.C.-based National Council of Nonprofits (NCN) believes several provisions in the 10-year, $940-billion bill could help nonprofits control their health care costs. The Small Employer Credit would provide a tax credit allowing small nonprofit employers to deduct 25 percent of qualified health costs from 2010-13 and 35 percent of qualified costs for 2014 and onward for up to two years from their withholdings tax liability. Small nonprofits are those with 25 employees or fewer, with average wages less than $50,000 per year. The measure also provides grants for up to five years to small employers that establish wellness programs and provides technical assistance and other resources to evaluate employer-based wellness programs.
Employers would be allowed to offer employees rewards of up to 30 percent of the cost of coverage for participating in a wellness program and meeting certain health-related standards. The reward limit might be increased to 50 percent of the cost of coverage if deemed appropriate. Rewards could be premium discounts, waivers of cost-sharing requirements, or benefits that would otherwise not be provided. The tax credit provision will have a positive impact on the nation’s 668,000 nonprofit and for-profit arts businesses in the U.S. that employ 2.9 million people and many of which are small businesses, according to Americans for the Arts. A recent Congressional Research Service study reported that more than half of all nonprofits have fewer than 10 employees and 65 percent have fewer than 25 employees. The final legislation included major reform policies supported by Americans for the Arts and its national health care coalition of 20 other arts organizations.
As the legislation is enacted, Americans for the Arts is also working to ensure that national health benefit exchange provisions include individual artists and cultural nonprofit organizations that are currently excluded for all practical purposes from employer-based insurance plans. “At a time when the economic crisis has affected the cultural sector as dramatically as it has the millions of unemployed and uninsured Americans, this legislation is welcome news for the arts organizations of America,” said Robert Lynch, president and CEO of Americans for the Arts. “After decades of being locked out of group health care coverage options or faced with a high-cost burden for insurance, the more than two million U.S. arts workers now have access to the health care they rightly deserve. The new cost-savings for small businesses will also enable nonprofit arts organizations to produce and present more programs to serve their communities.” Richard Buery, president and chief executive officer of The Children’s Aid Society in New York City, said the legislation would provide the first federal funds for the 2,000 school-based health centers (SBHCs) nationwide. The SBHCs, of which there are 130 in New York City, are health clinics located in schools and staffed with health professionals who provide primary health services to children in schools.
Healthcare and donors The direct impact of healthcare reform on philanthropy for hospitals will be minimal, according to Bill McGinly, CEO of the Association for Healthcare Philanthropy (AHP) in Falls Church, Va. “The biggest thing that’ll shape philanthropy for a while will be the uncertainty about healthcare delivery and what it means to individuals, whether we’ll see costs really go through the roof in providing healthcare,” McGinly said. There remains a lot of uncertainty because of the struggle to keep up with what’s going on in Washington, D.C. “I don’t think we’ll realize the full impact of this yet,” McGinly said. “The larger influence that will hurt philanthropy, and we see this happening already, is there’s still uncertainty as to what’s included and what the impact will be on me as a patient, as citizens,” he said. “It’s hard to comment because there is so much uncertainty and unknown,” McGinly said. Some legislation introduced by the Republicans already aims to derail parts of healthcare reform or challenge the constitutionality of some elements, McGinly said. What could have created some issues for philanthropy was not included in the healthcare reform that passed, McGinly said: the administration’s proposal to reduce the tax deductibility of charitable contributions. That’s good news, he said, because it likely would have meant a reduction in the size of gifts.
AHP supported a measure in the Senate bill that required nonprofit hospitals to perform a community needs assessment at least once every three years. “We do support the reporting, measuring and assessment of communities, to demonstrate community benefit,” McGinly said. The 1,200 free clinics in the United States last year saw 8 million patients, twice as many as the year before, said Nicole Lamoureux, executive director of the National Association of Free Clinics (NAFC) in Alexandria, Va. “Free clinics receive little to no state or federal funding, and these clinics have been servicing the nation’s underserved since the Ô60s,” she said. “Based on our growth rate and the current economy, it’s safe to say that we’ll see eight million patients or more this year,” she said. About 83 percent of people who visit free clinics come from a working household, according to Lamoureux. “They have a job, they can’t afford a payment. What we really need is affordability, accessibility and portability. It’s too early to tell is if this bill answers those questions for us,” she said. Roddey Gettys, CEO of Baptist Easley Hospital in Easley, S.C., said he fears the hospital will lose money every day from Medicare and Medicaid patients, which make up nearly 80 percent of the hospital’s patients. He said, “12 percent of our patients are considered charity at our hospital, and we will make a little money on them, but lose money on the 80 percent that are Medicare and Medicaid,” Gettys said. “I don’t want anybody to not have health insurance, but it’s actually scary to know that we have a new health plan on the table … and no one seems to know what’s in it. Hopefully they are right about this being the right thing to do.” In the wake of the bill’s passing, Gettys said hospitals will form partnerships to continue to provide services to the public. All services will be considered he said to see which hospital in each area does each service best, as a plethora of the same services will be unnecessary. “Hospitals are the safety net in the community, and if we are going to continue to be that safety net, then the government has to be willing to do its part to make sure we are still here,” he said. “I think we will see a significant increase in collaboration with our neighbors, and decide who does what best. This demands that we will work closely together and be very efficient.” While it might be early to determine the details of healthcare reform, some organizations are hailing its passage as a victory.
“Health care is at a tipping point and the shortcomings within our health care system can no longer be ignored,” said Rich Umbdenstock, president and CEO of the American Hospital Association, in a written statement . “Today’s vote will chart a new and better course for our nation’s health and health care. Bottom line: the health reform bill may not be perfect, but it expands coverage to 32 million people, enacts significant insurance market reforms and lays a solid foundation upon which we can continue to build.” The American Cancer Society Cancer Action Network (ACS CAN), the advocacy affiliate of the American Cancer Society (ACS), believes reform would make “far-reaching improvements” to the healthcare system. “Families affected by cancer know first-hand the gaps that exist in our broken ‘sick care’ system,” said John Seffrin, chief executive officer of ACS CAN, in a letter to House leaders last month. “Though the fight for health care reform has not been easy, we’ve come too far and accomplished too much to let this effort fail.” The legislation would improve access to health care by ensuring the “availability of adequate and affordable insurance coverage to nearly all Americans,” according to ACS CAN. Critical reforms would specifically eliminate discrimination based on health status and pre-existing conditions, and eliminate “arbitrary” limits on annual and lifetime benefits, which they believe have been detrimental to cancer patients. The bill also would help to transform the health care system to focus more on prevention and early detection by requiring all insurance plans to provide coverage for essential, evidence-based preventive measures with no additional co-pays. ACS CAN also believes the bill would go a long way toward reducing the disparities in prevention and treatment of cancer among low-income and minority populations through the expansion of Medicaid and inclusion of tax subsidies.