Republicans Are Determined to Shred Health Insurance Provided by Employers
Millions of Americans breathed a huge sigh of relief when President Trump and House Speaker Paul Ryan agreed that there would be no vote in the House of Representatives on the American Health Care Act, the deeply flawed replacement Ryan had in mind for the Affordable Care Act of 2010, aka Obamacare.
At a press conference, Ryan sounded dispirited as he described the ACA as “the law of the land” and glumly stated that the U.S. is “going to be living with Obamacare for the foreseeable future.” Critics of Ryan’s bill—which according to the Congressional Budget Office, would have caused 24 million Americans to lose their health insurance by 2026—hailed its failure as a victory for all the Americans who have obtained individual health plans via the ACA exchanges at healthcare.gov. But there is another group of Americans who have benefitted from the ACA as well: those with employer-based health coverage, and for them, the stakes are high in the U.S.’ ongoing healthcare debate.
House Minority Leader Nancy Pelosi outlined some of the hardships the American Health Care Act would have imposed upon Americans with employer-based health insurance. At a Democratic press conference held March 23 after Ryan pulled the bill, Pelosi told reporters that Trump-Ryancare not only threatened individual plans, it was also designed to “destroy the protections of more than 155 million Americans who get coverage through their employers, eliminating essential health benefits” such as “guaranteed maternity care” and “mental health care.”
One of the bogus GOP talking points in favor of repealing the ACA is that since the majority of Americans receive health insurance through their employers, those with individual plans should not be a priority of government. But that argument is ignorant for a number of reasons. The millions of Americans who have been receiving health insurance via the ACA includes numerous entrepreneurs, small business owners and freelancers who work in the “gig economy” as well as people with full-time jobs at smaller companies that don’t offer insurance—and when the self-employed become disabled or unable to work due to lack of health care, tax revenue is lost. The economy in general is affected, whether one has employer-based insurance or group insurance. According to the CBO, the American Health Care Act would have resulted in 7 million Americans losing employer-based insurance. So even though the end of the ACA would hit the self-employed and freelancers especially hard, Americans with group plans clearly have a lot to lose as well if, at some point, Republicans make another attempt to repeal it.
When President Barack Obama signed the ACA into law on March 23, 2010, he realized that the U.S.’ health insurance system was seriously problematic for both the self-employed and employees of companies. Americans with individual insurance and group insurance were both suffering medical bankruptcies, assuming they were even able to obtain insurance. The ACA mandated that beginning January 2014, new health plans had to cover 10 categories of “essential health benefits” whether they were group plans or individual plans, including maternity and newborn care, hospitalization, preventative care and chronic disease management, laboratory services, ambulatory patient services, prescription drugs, emergency services, mental health services, pediatric services and rehabilitative services.
When Ryan first unveiled the American Health Care Act in early March, it maintained the ACA’s essential health benefits while making them a lot less affordable. But even though Trump/Ryancare, according to the CBO, would have robbed 24 million Americans of health insurance, the bill wasn’t cruel or draconian enough for the so-called Freedom Caucus, the group of far-right House Republicans led by North Carolina Rep. Mark Meadows. Trump and Ryan, hoping to appease the Freedom Caucus and ram the bill through Congress as quickly as possible, agreed to remove the essential health benefits. The consumer health care advocacy group Families USA was vehemently opposed, cautioning that “a repeal of the EHB requirements would leave millions without any affordable health care options, forcing them to pay out of pocket for needed care or go without care altogether.”
On March 23, Families USA warned, “Speaker Ryan, in a last-minute attempt to buy the votes needed to pass the American Health Care Act (AHCA), has put a repeal of the essential health benefits (EHB) requirements on the table. EHB requirements ensure that everyone in the individual and small group health insurance markets has access to comprehensive coverage that actually covers the services they need.”
Trump-Ryancare would have ended the ACA’s employer mandate, which says that companies with 50 or more full-time employees must provide health insurance. Minus the employer mandate, companies with 50 or more employees would be free to drop their group plans. And the AHCA would have also ended Obamacare’s individual mandate, which requires individuals to obtain insurance or pay a fine.
If millions of Americans had lost their individual coverage under Trump-Ryancare, insurance companies would have lost a lot of customers—and they would have been likely to try offsetting the loss by raising their prices for group plans, especially those that offered the most benefits. Under the ACA, the cost of group plans has been increasing at a slower rate: according to the Kaiser Family Foundation, premiums for employer-based insurance increased by 3.4% on average in 2016 compared to 4.2% in 2015 (it was individual plans that saw the harshest price increases last year). But the more Trump-Ryancare had resulted in price hikes for group plans, the more employees of companies would have joined the ranks of the uninsured—which according to the CBO, would have increased to 52 million Americans by 2026 compared to 28 million now.
Large companies, however, wouldn’t necessarily respond to premium hikes by dropping their group plans altogether; some would offer group plans with weaker benefits and higher deductibles for employees. The more financial strain ACA repeal put on employers, the more they would pass the costs along to their workers.
Michael C. Dorf, a law professor at Cornell University who opposed the Trump-Ryancare bill, explained in a March 13 commentary for Newsweek why it would have been a hardship for Americans with employer-based insurance. One of the benefits of the ACA, Dorf pointed out, is a “substantial reduction in people without insurance showing up in emergency rooms with conditions that could be treated by a primary care physician—or worse, that could have been treated cheaply and effectively by a primary care physician but were made worse, and thus, more costly to treat, by the delay in treatment.”
Dorf added that if those Americans, robbed of health insurance and lacking the primary care physicians they had under the ACA, are once again flooding emergency rooms, hospitals and doctors will “cross-subsidize more uncompensated treatment for people without insurance or other means to pay from people who have insurance”—and that, Dorf noted, includes employers who provide group insurance for their employees.
“Higher charges to insurers means higher insurance premiums for employers, which means less money left over for salaries and other benefits,” Dorf asserted. “As a consequence, people with employer-based health insurance will take home less money than they would if the ACA were to remain on the books.”
The Office of Management and Budget offered an even more disturbing analysis of Trump-Ryancare than the CBO. According to the OMB, 26 million Americans would have lost their coverage by 2026, not 24 million, and the number of uninsured would have reached 54 million rather than 52 million. With all that chaos in the insurance market, there is no way group plans and employer-based insurance would not have been negatively affected along with individual plans.
Although the AHCA fiasco was a setback for Trump and Ryan, the Republican Party hasn’t given up on the idea of overturning the ACA. On April 2, Trump tweeted, “Anybody (especially Fake News media) who thinks that Repeal & Replace of ObamaCare is dead does not know the love and strength in R Party!” In an interview with the London-based Financial Times published the same day, however, Trump said that if he cannot reach an agreement with the Freedom Caucus, he “will make a deal with the Democrats.”
But Pelosi and Senate Minority Leader Chuck Schumer have emphatically stated that while they are open to legislation that would improve or expand the ACA, they are adamantly opposed to repealing it. If the ACA manages to survive until 2019 and Democrats were to pick up enough seats in Congress in the 2018 mid-terms, repeal would be unlikely—which doesn’t mean that GOP attacks on the ACA would end. CNN has reported that in a no-repeal scenario, Trump’s plan would be to “allow Obamacare to fail and let Democrats take the blame.” In other words, Trump’s ultimate plan for Obamacare could be death by 1,000 cuts rather than outright repeal.
Democrats are the first to admit that while the ACA was an improvement over the pre-Obama system, it has its flaws. Under the ACA, the number of Americans lacking health insurance has reached an all-time low. But the fact that 28 million Americans remain uninsured is a major problem, and the Trump-Ryancare debacle demonstrates that the Republican Party is full of people who would like to make that problem much worse.
Trump has no credibility whatsoever on the subject of health care. When he was campaigning for president, The Donald promised that “there will be no cuts to Social Security, Medicare and Medicaid” under a Trump Administration. But in fact, Trump-Ryancare would have defunded Medicaid by almost $900 billion.
Trump, in 2016, promised that ACA repeal would result in much better coverage at significantly lower prices, but Trump-Ryancare would have had the opposite effect. And if the ACA were to be repealed at some point without plans for a single payer or Medicare-for-all program in place, Americans with both individual health plans and employer-based group insurance would suffer considerably.