Listen to the critics of the GOP’s healthcare reform effort, and you might think Republicans are intent on personally cancelling the insurance policies of 300 million Americans.
Earlier this month, Sen. Elizabeth Warren, D-Mass., referred to the Senate’s Obamacare replacement, which became public June 22, as “a bill that’s going to touch every American family.” The Senate is expected to vote on the measure this Thursday, June 29.
Sen. Minority Leader Chuck Schumer, D-N.Y., has called the House GOP’s American Health Care Act a “cancer” on the nation’s health system. “Unless you’re a healthy millionaire,” he exclaimed, “TrumpCare is a nightmare.”
But in reality, for better or worse, most Americans won’t see much change in the way they access and pay for medical care, if the GOP’s healthcare reform effort becomes law.
Most of the reforms contemplated by Republicans would address the individual insurance market, where just 7 percent of Americans currently secure their coverage. A significant chunk of those people would pay less for coverage if Obamacare is repealed.
Even the GOP’s brand of Medicaid reform will preserve much of the status quo. It won’t phase out Obamacare’s expansion of the program until 2021 — and then do so gradually over three years. If Democrats retake the White House and Congress before then, it’s unlikely that the expansion will ever come to an end.
Meanwhile, for the half of Americans insured through their employers, larger economic trends will have far more effect on their health coverage than anything dreamed up on Capitol Hill.
A central goal of Republican healthcare reform is rolling back Obamacare’s onerous insurance market regulations. These include the ten essential health benefit mandates, which require all insurers to cover a litany of expensive treatments and services, regardless of whether patients want or need them.
Republicans would also relax Obamacare’s restrictions on charging older or sicker patients higher premiums than their younger or healthier counterparts, the so-called age and community rating rules.
Under the AHCA, for instance, states could apply for a waiver that would allow insurers to consider the health status of patients who fail to maintain continuous coverage when setting their premium, but only for a single year. The Senate bill does not include this provision.
Both bills would also permit insurers to charge older people five times more than younger ones.
These changes are intended to create a more diverse, competitive individual insurance market with a wider variety of affordable coverage options.
But they’re confined to a sliver of the overall insurance market. Less than 22 million people — out of a population of 318 million — shop for coverage in the individual market.
That’s a fraction of the 156 million people with employer-sponsored coverage.
For starters, it’s long been illegal to consider health status or history in the employer-sponsored insurance marketplace. The old and the young also effectively pay the same premiums if they get their coverage through an employer.
Further, most companies say that they wouldn’t scale back worker coverage if Obamacare’s essential health benefit requirements were eliminated, according to a new PwC survey of U.S. employers. Nearly three-quarters will continue to cover 100 percent of Obamacare’s required preventive services, regardless of what Republicans do.
Even the GOP’s proposed repeal of the employer mandate — one of the few Republican reforms aimed specifically at the employer market — wouldn’t have much effect on American workers. This Obamacare rule requires all employers with 50 or more full-time workers to cover at least 95 percent of that full-time workforce or pay a fine.
According to the PwC survey, 93 percent of companies wouldn’t alter health-benefit eligibility if Republicans ended the employer mandate.
There’s a simple reason for this fact — it’s the economy, stupid.
Generous health benefits have long been used by businesses to attract talented workers. Now that America’s jobless rate is near a 10-year low, the competition for labor is high. So it’s far less likely that companies will cut back on benefits.
A strong economy, it turns out, is far more effective at boosting access to coverage than any government mandate.
Health benefits are also privileged, from a tax perspective. They’re not subject to income tax. So workers tend to demand them, even more so than higher wages. After all, they keep the entire value of the benefits for themselves.
Democrats have portrayed the GOP’s health reform agenda as a sweeping overhaul affecting all Americans. But Republicans are actually proposing policies that will mostly affect the small segment of Americans who purchase coverage on the individual market.
Indeed, if the GOP enacts its brand of health reform, a significant chunk of Americans will find coverage much more affordable. But a much, much bigger share won’t notice any difference.