Navigating the complexity of health care reform

Let’s face it. Health care isn’t the easiest issue to explain. To start, it is very, very personal — when you need it, you need it; you might need a lot of it; and you don’t want to hear that you can’t have it.

Whether it’s for yourself or a loved one, access to health care can quite literally be a matter of life and death. Unlike most other necessities in life, however, it is usually financed at least in part by someone else — the employers who provide the vast majority of working Americans’ health insurance and pick up the largest share of the tab on premiums, and the insurance companies who, in turn, pay the medical providers. And those third-party payers are subject to contradictory rules from federal, state and sometimes local governments. It would seem endlessly complicated even if it ran perfectly. But it doesn’t run perfectly. In fact, health care is a mess.

Why the American Health Care Act works for retailers

The AHCA contains many long-sought victories for retailers. See what they are.

The current health care reform debate in Congress is a perfect example. Lawmakers who want to “repeal and replace” Obamacare are using a technical procedure known as “budget reconciliation” to beat a likely filibuster in the Senate with 51 votes instead of the 60 normally required. But reconciliation procedures balance the lower vote count with severe limitations on what can be considered.

One key constraint is that provisions must have a direct revenue impact. That means the Affordable Care Act’s tax provisions — the Cadillac tax on high-value health plans, the health insurance tax, medical device tax and pharmaceutical tax — can all be outright repealed or amended subject to scoring constraints. By contrast, the employer mandate that requires most companies to provide health insurance for their full-time workers cannot be repealed as such. But it can be repealed in effect by reducing the penalties for non-compliance to zero. Other retail industry health care priorities — such as association health plans that would let small businesses band together to purchase health insurance for their workers at more affordable large-group rates — must be considered separately. 

It is time, at long last, to repeal Obamacare.

Just to keep up the level of confusion, the repeal and replace bill has been named the American Health Care Act — the AHCA, rather than the ACA.

One of the latest developments in the debate has been the report on the AHCA issued by the nonpartisan Congressional Budget Office. The report found that the legislation would achieve budget savings of $337 billion, primarily through Medicaid reform. But it has also raised concerns because it projects that the number of uninsured individuals would increase by 24 million over the next 10 years. We believe the CBO is too pessimistic on the uninsured numbers, and would point out that the Medicaid reform proposals are not yet final.

CBO’s modeling methods do a better job of measuring mandatory systems, such as the ACA employer and individual mandates. They have more difficulty with voluntary systems, where an employer may or may not offer coverage and an employee may or may not accept the coverage offered. But we think employer-based coverage is “stickier” than CBO projects — health benefits continue to be prized, both by employees who want the coverage and employers who seek to attract a quality workforce.

We also suspect that the Medicaid reform proposal in the legislation will continue to evolve as the AHCA moves forward to meet concerns from lawmakers from the right, center and left. Governors, who will gain additional flexibility but added financial responsibility, will also weigh in.

So, while the CBO report was — to use a technical term — pretty ugly, we don’t think it should forestall lawmakers from supporting the AHCA. It is time, at long last, to repeal Obamacare.