GOP health-care bill may upend employer-provided insurance plans too

If you think this bill is dodgy, wait ’til you see what Trump hammers out with the new Democratic House majority in 2019.

What the Journal describes here is probably more of a political problem for the GOP than a policy problem. ObamaCare technically allows employers to choose which benefits their plan will cover according to the laws of any state, but since O-Care itself sets a minimum national standard of coverage for “Essential Health Benefits,” employers are bound by those national standards no matter which state they choose. Under the AHCA, though, a state can waive the ObamaCare national standards; employers could then use that state as their benchmark for benefits, effectively freeing them from the federal rules that, for example, cap out-of-pocket costs for employees and prevent employers from imposing lifetime limits on certain types of coverage. Are businesses likely to do that? Maybe not. Robust health coverage is a draw when you’re competing for labor, after all. Are Democrats likely to scare the pants off of voters by reminding them that their boss could do that under the Republican plan? You betcha.

The ACA prevents employer plans from putting annual limits on the amount of care they will cover, and it bars lifetime limits on the 10 essential benefits. But in 2011, the Obama administration issued guidance stating that employers aren’t bound by the benefits mandated by their state and can pick from another state’s list of required benefits. That guidance was mostly meaningless because the ACA established a national set of essential benefits.

Under the House bill, large employers could choose the benefit requirements from any state—including those that are allowed to lower their benchmarks under a waiver, health analysts said. By choosing a waiver state, employers looking to lower their costs could impose lifetime limits and eliminate the out-of-pocket cost cap from their plans under the GOP legislation…

“It’s huge,” said Andy Slavitt, former acting administrator of the Centers for Medicare and Medicaid Services under President Barack Obama. “They’re creating a backdoor way to gut employer plans, too.”…

One trade group representing employers said the amendment’s effects on people with employer-sponsored health coverage would be minimal. Most large employers didn’t impose annual or lifetime limits before the ACA was implemented, according to James Gelfand, senior vice president of health policy at the Erisa Industry Committee.

That’s the entire GOP plan in a nutshell — fewer mandatory benefits in theory should lead to lower costs for the healthy even if it makes life more expensive for the sick, a reversal of the ObamaCare ethos of essentially taxing the young and healthy to help insurers cover the preexisting conditions of others. If Republicans are right that this will lower premiums for many (most?) consumers, maybe they win that argument politically. If they’re wrong, hoo boy. Or maybe the Trump White House will render the argument moot, at least as it applies to employer-provided plans. TPM notes that the current federal regulations are, unsurprisingly, complex and ambiguous; Tom Price, as head of HHS, will have lots of discretion in dictating whether employers really will be able to benchmark their benefits to “waiver” states or whether they’ll be stuck with the current federal regime of “Essential Health Benefits.” If the administration sees a political storm gathering over this (by the Journal’s estimate, 159 million Americans are covered by employer-provided plans), Price could try to block employers from raising out-of-pocket maximums or reimposing lifetime limits on coverage by crossing state lines. Although that would be awkward given that the whole point of the GOP proposal ultimately is to erase state boundaries and maximize choice by letting consumers shop for plans nationally. If consumers are free to do that, why wouldn’t employers be?

Anyway, looks like they’re all-in. The vote is just a few hours away:

Seven years ago, House Republicans attacked Pelosi for voting on ObamaCare without a final CBO score. Today they’re rushing to put their own bill on the floor and hold a vote before CBO publishes another grim analysis of what the bill will cost and who it’ll help and hurt, which could scare off the fencesitters who are momentarily reluctantly voting yes. (How may members have even read the mostly meaningless Upton Amendment that rescued this bill from oblivion?) I think this assessment of the political lesson here is dead right, and obvious to everyone except, I guess, the centrists in the Republican caucus. The Freedom Caucus proved they were willing to go to the mat, even at the cost of an embarrassing failure to Trump and Ryan in March, in order to have their demands met. The moderates proved this week that they weren’t willing to do the same. They caved for nothing more than Upton’s fig leaf. The White House will remember going forward which side of the GOP caucus can be successfully muscled and which can’t.