Republican lawmakers are preparing to vote on an Obamacare replacement bill that would undo some of the existing protections for the millions of people who access insurance through their jobs.
Policy debates about Obamacare typically focus on the individual market, or people who purchase health coverage from insurers instead of getting covered through work or a government program. But when you add the employer market into the mix, then you’re talking about a huge number of Americans. More than 100 million people get insurance through their employer.
As the Wall Street Journal reports, some policy experts are concerned that the House Republican bill would allow large employers to offer benefits in line with the requirements in any state — including states that choose to make their benefit standards skimpier under Trumpcare.
Under a last-minute amendment added to the bill, states would be allowed to opt out of the regulations that the Affordable Care Act currently imposes on insurance plans. For example, states could obtain a waiver to opt out of Obamacare’s regulations requiring coverage for “essential health benefits,” a set of benefits standardized under the existing health law that includes services like maternity care and mental health treatment. States could also bypass Obamacare’s limits on out-of-pocket expenses for costly illnesses.
So big employers — which are typically always looking to lower the cost of providing health care — could choose the most lenient state-level standards to make their overhead costs cheaper.
“It’s huge,” Andy Slavitt, the former acting administrator of the Centers for Medicare and Medicaid Services in the Obama administration, told the Wall Street Journal. “They’re creating a backdoor way to gut employer plans, too.”
In practice, this means employers could start offering plans to their workers that don’t include Obamacare’s existing protections for lifetime limits. If maternity care is no longer defined as an essential health benefit, for example, then employees may hit a lifetime limit and be forced to pay huge out-of-pocket costs for a catastrophic health issue like a high-risk pregnancy.
If Trumpcare passes, it’s unclear how many employers would take advantage of this loophole. Still, the potential regulatory maze raises red flags for experts like Matthew Fiedler, a fellow at the Brookings Institution who first noticed this potential issue with the GOP’s bill back in March.
“The core goal of insurance is to ensure that people are protected if the worst happens, and these protections are crucial to achieving that goal,” Fiedler told the Wall Street Journal.
This potential reality is not one that GOP lawmakers themselves have to worry about. Thanks to a different amendment, Trumpcare includes an exemption that prevents members of Congress and their staff from losing existing consumer protections under Obamacare in states that have applied for waivers to bypass them. Rep. Tom MacArthur (R-NJ) says he plans to close this loophole with separate legislation, but there appears to be no plan to amend the existing language of Trumpcare itself to correct it.