News 5/5/2017

HR Dive: House passes the AHCA: Rapid Reaction from Business, Employer Advocates

Dive Brief:

  • In a narrow 217-213 vote, House Republicans scored a legislative victory Thursday by passing their healthcare reform bill, the American Health Care Act (AHCA).
  • Among the bill’s highlights, per Vox: A repeal of the individual mandate (the tax on those who don’t purchase insurance); phasing out of Medicaid expansion along with additional cuts; individual healthcare tax credits based on age, not income; and limited coverage for pre-existing conditions on the individual market. The employer mandate is also repealed by way of gutted enforcement mechanisms.
  • As attention shifts to a Senate vote, top business advocates mostly approved of the bill, according to U.S. News & World Report. SVP David French of the National Retail Federation called the AHCA “an important milestone” to making systemic improvements despite admitting that it is “not perfect.” U.S. Chamber of Commerce CEO Thomas Donohue said the bill “contains important reforms that will lower costs and pull back on job-killing tax hikes.”

Dive Insight:

Republicans drank beer. Democrats sang a round of “Hey, hey, hey, goodbye” on the floor. Who would’ve guessed this is what healthcare reform would look like?

About a month or so removed from a failed effort to get the AHCA passed — after seven years of developing a response to the Affordable Care Act — the GOP finally landed a victory of sorts both for the party and President Donald Trump.

Employers don’t have to shift course on the issue too much yet, especially considering the legwork is far from over. The AHCA still has to clear the Senate which it won’t, at least not as presently constructed. Senate Republicans have announced their intention to craft their own bill, which will borrow from the AHCA. That announcement throws a wrench in an already sluggish process.

Kim Buckey, VP of Client Services at DirectPath, said a CBO estimate is a must-have component for any bill presented to the Senate. But she warned that the bill’s provision to allow employers to base their employee health benefits on the requirements of “waiver states” could impact employer insurance.

“We can count on the bill to change several times before it comes up from Senate vote,” Buckey told HR Dive, “ACA is still the law of the land and everyone — employers, individuals and the health care industry should behave accordingly.”

The political victory is likely to be short-lived, but the bill is nonetheless significant, and there’s a lot for employer advocates to appreciate. The employer mandate is gone. Taxes are slashed. Limits placed on employers’ contributions to their workers’ HSAs would be relaxed, making those high deductible plans more affordable. The individual market piece seems rocky, but relatively little has changed on the employer side.

There are important cost drivers that this legislation doesn’t address, however, including rising specialty pharmacy costs. Observers expect future legislation and executive orders to chip away at this and other crucial concerns with the aim of lowering consumer costs.

(Ryan Golden is Associate Editor for HR Dive)

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