Summary of the House Republican Plan – “A Better Way”? Part 3: Employment Based Coverage and Cost Containment
In most ways, the new plan is same old, same old. It proposes block grants of the Medicaid program to the states, creates Medicare vouchers, adds in a Cadillac benefits tax for employer plans, repeals most but not all of the Obamacare consumer protections and payment reforms. It adds in a flat refundable tax credit for the uninsured. It keeps some consumer protections for those who maintain continuous and uninterrupted coverage and repeals them for most every one else.
Here are the summaries on the employer and cost containment provisions. I would urge you to read the full 37 pages of text, so you are well-educated in these times of electoral confusion and potential tumult. I will follow up with a blog on the financing provisions in Part 4 of this series.
Employment based coverage: more HSAs, more out of pocket, revised Cadillac benefits tax, less coverage, fewer covered and more pooling
Under Obamacare, large and small employers were required to offer coverage for their employees or pay a penalty into the Exchanges to help pay for their uninsured employees. Small low wage employers were offered tax credits through Exchanges (state or federally operated purchasing pools) to help allay the costs of covering their employees; small businesses were exempt from the manadate. Employers (beginning with small businesses) could purchase coverage through the Exchanges. Employment based coverage has been stabilizing or increasing after decades of steady decline.
1. The House Republican proposal would repeal the employer and individual mandates (shared responsibility).
2. It would expand High Deductible Health Plans and HSAs and HRAs, which are tax sheltered spending accounts that individuals and employees can use to pay for their costs. These policies are particularly advantageous to healthy and wealthier individuals in high income tax brackets.
3. It would retain and modify the Cadillac benefits tax on the most costly employer plans. The modifications include exemption of employee HSA contributions from the tax.
4. Purchasing coverage across state lines would be permitted indeed encouraged.
5. Association health plans and private purchasing pools would be encouraged for small businesses and individuals.
6. Employer wellness plans would be encouraged.
7. Self-insurance and stop loss coverage would be encouraged for small employers.
8. Federal medical liability reform would cap non-economic damages and limit lawyers’ contingency fees. This would be comparable to MICRA in California.
Prepared by: Lucien Wulsin
Date: July 6, 2016