Here's why you can't just use catchphrases like "repeal and replace" when you're talking about the health sector: It's about 17 percent of the nation's GDP and one of the biggest, if not the biggest, employment sector. Woven throughout the entire sector—and particularly throughout Obamacare—is the health insurance industry. When you go messing around with one part of what they do, like providing insurance through the Obamacare markets, the blowback can ripple through the whole industry. That's got employers—who cover the largest chunk of Americans—worried.
Now, as President Donald Trump promises a replacement for the Affordable Care Act that will provide “insurance for everybody,” employers worry Republican attempts to redo other parts of the insurance market could harm their much larger one.
“We’re deeply embedded” in the health law, said Neil Trautwein, vice president of health care policy for the National Retail Federation, a trade group. “Pick your analogy — it’s like being tied to the railroad tracks or having a bomb strapped across your chest. It’s tough to disarm these things.”
Business dislikes many parts of the ACA, including its substantial paperwork, the mandate to offer coverage and the “Cadillac tax” on high-benefit plans that takes effect in 2020. But large companies in particular—those that have always offered job-based insurance—say a poorly thought-out replacement might turn out to be worse for them and their workers.
“Whatever the Republicans are going to do, they’ve got to make it look as different from the ACA as they can” for political reasons, said Edward Fensholt, a senior benefits lawyer at Lockton Companies, a large broker. “There are some pieces that aren’t broken, and the more you … make something different from the ACA, the more you risk screwing up things that look OK.”
Gee, now why do you suppose benefits lawyer doesn’t think the Republican-controlled Congress is capable of coming up with a plan that doesn’t screw everything up?
The biggest worry for employers is what Republicans have been talking about as replacement funding for whatever they might come up with, after they give the big tax cut to the very wealthy that’s included in a repeal. What a few Republicans have been talking about is what amounts to new taxes—limiting the exemption from income and payroll taxes that both employers and employees get. That makes health insurance more expensive for everyone at the tax end of the deal.
This is something that big employers—and frankly Republican lawmakers—never thought they’d have to face. Because who could have imagined that there’d be a Donald Trump in office and they would have to start keeping promises?