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Concerns about health-care costs and uncertainty about implementation of Obamacare may have held down growth projections in this year’s Economic Climate Study, presented Friday at an Economic Summit in Johnstown.
Health-care costs topped the list of legislative priorities among 126 area businesses participating in the study presented by Pitt-Johnstown associate professors John McGrath and Ron Vickroy during the Greater Johnstown-Cambria County Chamber of Commerce summit at the Pasquerilla Conference Center in Johnstown.
“Employers are very, very concerned about this,” Vickroy told the audience of several hundred business and government leaders.
Later, the audience heard keynote speaker Carolyn F. Scanlan, president and chief executive officer of the Hospital & Healthsystem Association of Pennsylvania.
She updated the audience on what to expect from the Affordable Care Act, also known as Obamacare.
Questions about the act were added to the business survey in developing this year’s Economic Climate Study, McGrath said, noting that this is the 19th year that he and Vickroy have compiled the report from area businesses.
Describing the slides on the screen during his presentation, McGrath said the researchers used the color red to designate decreases from last year’s report.
“You are going to see a lot of red today,” McGrath said.
Only 28 percent of the businesses expect real growth in revenue next year, compared with 32 percent from last year’s report. The profit forecast was exactly the same as last year, with 24 percent of respondents expecting to increase profits.
Job growth is forecast to remain steady, with 38 percent of the companies adding workers. Last year’s report had 37 percent hiring.
But for the first time in several years, the region’s unemployment rate of 8.2 percent is above the state and national rates of 7.5 percent and 7.6 percent, respectively.
“We are lagging behind, but the good news is (the survey’s predictions) are all positive.” Vickroy said.
New questions this year focused on health-care benefits and requirements of the Affordable Care Act.
Although 89 percent of the companies plan to continue offering health-care benefits, 39 percent expect to raise employees’ share of the cost in 2013 through higher payroll deductions or increased deductibles.
The real uncertainty will come in 2014, when the Affordable Care Act requires everyone to have insurance and introduces an insurance exchange for those whose employers do not offer the benefit.
But fewer than one employer in five said they knew a lot about the exchanges, the survey showed.
Local businesses are not alone in their lack of knowledge, Scanlan said during her presentation.
In a national study of 439 small employers and self-employed business owners, Scanlan said, about two-thirds did not know that companies with fewer than 50 full-time employees will not be required to offer health-care insurance.
“There needs to be a lot of education in the marketplace for employers to understand these exchanges,” Scanlan said.
If implemented with fairness, Scanlan said, health-care reform will improve the financial stability of the state’s hospitals, including the region’s largest employer, Conemaugh Health System.
The Affordable Care Act would reduce the amount of uncompensated care that hospitals provide to those who cannot afford to pay. In Pennsylvania, Scanlan said, that amounts to about $1 billion annually.
Requiring healthy young people to have insurance is the only way to guarantee coverage for those with pre-existing conditions, she added.
“It is really important for people to have access to health care,” she said. “One of the best ways to have access is to have insurance.”
Scanlan detailed various aspects of the health care reform legislation, point-by-point, in a 64-slide presentation.
“That was the best explanation of the Affordable Care Act I have heard since it was passed,” Ron Repak, executive director of the Johnstown Redevelopment Authority, said later. “It gave the macro view and the micro view.”
Each state will be deciding in the next few weeks how the insurance exchange will be set up for its residents, Scanlan said. To sweeten the deal, the federal government would provide more funding and raise the maximum income for Medicaid eligibility.
Scanlan believes the Medicaid expansion would benefit the state by taking advantage of the extra federal funds.
“We want to see Medicaid expanded,” she said. “We don’t want the state to leave money on the table. We think it helps small businesses and it is a better way to pay for health care in the state.”
Scanlan said she is optimistic that the Affordable Care Act can provide more people with better health care and reduce costs.
“If we really think about what the health-care needs are, and all states try to put this in place, it will be successful,” she said.
Closing the Economic Summit, chamber President Mike Artim offered his definition of optimism for the Johnstown region.
“It was not the most uplifting report, but I am optimistic,” said Artim, who also is executive director of Cambria-Rowe Business College.
“To me, optimism is your belief in your ability to create your own future. It is up to us to create the world we want.”
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