To say the past week-and-a-half has been a cliffhanger for healthcare observers is a bit of an understatement.
Nearly two months after a narrow vote in favor of the House GOP’s American Health Care Act (AHCA), the U.S. Senate seemed poised to run ahead with legislation of its own: the Better Care Reconciliation Act (BCRA). In just five days, pressure from Senate Democrats and moderates killed the BCRA not once, but twice.
Politically, the friction between GOP factions has proved frustrating for conservatives, especially now that it has prevented members of the party from coming together a whole seven years after passage and implementation of the ACA. No bill yet considered seems to bridge the divide.
But for employers and their advocates in Washington, the day-to-day impact of the healthcare debate is what matters most — and stagnation isn’t exactly optimal. Now, as HR departments turn to fall and the busy season of open enrollment, the best advice from experts seems to be to stay the course for now, and wait for policy changes later.
Repeal efforts hit a brick wall
A defining feature of the Senate GOP’s handling of healthcare reform for the last two months was its lack of transparency. So much so that it became difficult for even the closest policy observers to tell what vote would come next.
That was especially true after the the BCRA’s initial defeat. Quickly, all eyes turned to a “skinny repeal” that took away much of what employers liked about the BCRA, save repeal of the employer and individual mandates.
The details were still hard to come by, though, according to Shandon Fowler, senior director of product strategy at Benefitfocus. During debate around the repeal, Fowler said it was unclear whether that repeal contained any changes to HSA contributions sought by employers.
“What they're doing right now is very inside baseball,” he said during last week’s deliberations.
At the 11th hour, senators voted Jul. 25 to bring debate on something to the Senate floor. Two nights later, all options, including a full-stop ACA repeal without immediate replacement, had officially failed to reach the 51-vote threshold.
The good and the bad of the bills
The series of GOP proposals didn't address every concern for employers, but experts who spoke with HR Dive generally agreed that they did (to varying degrees) make needed changes to the ACA.
Employer and individual mandate
Both the BCRA and skinny repeal plans would have repealed the individual mandate. Both would have effectively eliminated the employer mandate by way of elimination of associated fees and reporting requirements, multiple sources told HR Dive.
Getting rid of the employer mandate would have meant the elimination of lookback reporting, a positive development for compliance officers tasked with maintaining years of data, according to Fowler.
But others weren’t so enthusiastic about removing the individual mandate. Eric Schillinger, an attorney with Trucker Huss, said in an interview that the removal of the individual mandate penalties might have been “potentially problematic,” particularly for workplaces with younger, healthier employees.
“Without that mandate, there’s even less incentive to enroll in employer coverage,” Schillinger said.
The individual market
Several sources also advised employers not to tune out controversy over the bills’ impact on those not covered by private insurance. A controversial provision in the BCRA would have offered states a waiver on minimum essential health benefits coverage for the individual and small-group marketplaces.
Andrew Cavenagh, managing director of Pareto Captive Services, likened the situation to popping one end of a large balloon. Putting pressure on the individual markets, and opening the possibility that individuals in need of coverage would lose it, may have carried the risk of increasing dependence on group health plans like those offered by employers.
“We would argue that squeezing the balloon would absolutely impact employers,” Cavenagh said.
Not everyone agreed with that assessment. Steve Wojcik, VP of public policy for the National Business Group on Health (NBGH), said in an interview that he didn’t foresee a large migration of patients from the individual market to group-sponsored plans. But he and others agreed that instability on the individual market would harm employers with large part-time and gig workforces.
“Employers have a vested interest in a stable exchange market down the road as a potential coverage option for their employees,” Wojcik said, “but also, there are many retirees and some part-time employees who do get coverage from the exchanges.”
"Follow the horse race — it’s exciting. But long term, it’s not about the horse race. It’s about strategic preparedness."
Shandon Fowler
Senior Director of Product Strategy, Benefitfocus
On a human level, that uncertainty wouldn’t have been good for employees, argued Kim Buckey, VP of client services at DirectPath. Any significant impact for the 7% of the population buying coverage on the individual market right now would have had consequences for the workforce.
"If those prices go up and are unaffordable, or if those options aren't available anymore, you run the risk of having issues with your employees showing up because they're sick or have a chronic disease," Buckey said. “The productivity impact is going to be horrible."
Taxes and HSA contributions
A key goal of the BCRA was the effective elimination of the Cadillac tax through delay of its implementation. Preliminary drafts indicated that passage of the bill would have achieved this. Schillinger added that most major taxes on employer-sponsored coverage would have been lifted. Of course, that’s no longer in the pipeline with the BCRA’s defeat.
“We are disappointed that efforts to delay and repeal taxes on employer plans, which affect over 175 million working families, and efforts to enhance the value of health accounts to help people pay for out-of-pocket medical expenses will have to wait for another day,” Wojcik said in a statement Friday.
For increasingly popular health savings account (HSA) plans, the BCRA would have doubled the maximum employer contributions, according to Schillinger.
Open enrollment isn’t going anywhere
As always, it’s good to stick to the mantra that the law is the law until it’s not. The ACA hasn’t vanished, and employers are best served by preparing for the busy fall season under the usual rules.
“The impact of all this has been minimal on open enrollment,” Fowler said. “Most employers are saying it's full steam ahead.” Among the items of interest this season: data accuracy, timeliness, education, administrative components, plan designs and cost control.
Buckey said she’s emphasized the importance of transparency and clarity to clients this time around, regardless of what’s going on in Washington. “Employers would be well-served in at least preparing their message to employees,” she said. “And if they don't know the impact of these debates will be, they should say they don't know.”
Too soon to give up on reform?
Another item that won’t change: innovation in the healthcare industry itself. Fowler, citing companies like IBM, foresees a slew of technological change that could improve delivery and benefits management significantly, particularly due to big data’s impact.
“There’s just so much data that’s available in our business,” Fowler said. “It would be crazy not to take advantage of the opportunities.”
Cavenagh agreed, saying the need for employers to drive down healthcare costs while improving quality of care would be important to follow going forward. “Employers are paying attention to anything that can help them save costs,” he said. “They’re being innovative.”
At the moment, any legislative activity is up in the air. President Donald Trump has publicly admonished the Senate for its failure to pass reform measures, even threatening to take away legislators’ health benefits. But sources aren’t seeing much of anything in the way of concrete developments.
“I don't think anyone thinks Congress is going to come up with a decent replacement plan,” Buckey said. “We would all be more comfortable if there was a plan in place before they repeal anything.”
At any rate, it doesn’t seem reasonable to stress out over the past week’s developments, Fowler said. Of course, vigilance should be taken in the event that serious reform is passed, even if that is short of a full-stop replacement. But there are more important matters.
“Follow the horse race — it’s exciting,” Fowler said, “but long term, it’s not about the horse race. It’s about strategic preparedness."
