Hidden Danger in Senate Bill for Employer Health Plan Sponsors

On the surface, the Senate bill has some positives for employers. The ACA mandate requiring employers to offer coverage goes away, along with requirements around affordability and minimum plan value. Like the House bill, the Senate bill also delays the implementation of the excise tax until 2026, and eliminates a number of other taxes on fully insured health plans, prescription drugs, and medical devices that ultimately affected group plans. 

But rolling back the ACA’s Medicaid expansion and cutting funding for Medicaid will result in people losing coverage and in lower Medicaid payments to providers. As Mercer’s Geoff Manville explains in this CFO article, providers will make up financial losses for underpayments and treating the uninsured by shifting cost to group plans. Studies have found that group plans are charged significantly more in areas with higher levels of uninsurance. In the Senate bill, Medicaid cuts are even deeper than in the House bill, though they take effect more gradually. In addition, the bill, which would allow insurance companies to offer individual plans covering fewer benefits – and charge older people significantly higher rates – is concerning to employers that want to know their pre-65 retirees will be able to find coverage in the individual market before they are eligible for Medicare.

NBGH’s Steve Wojcik also voiced concern in the article that the bill doesn’t target the real cost-drivers in the US health system. He would like to see legislation that targets “the inefficiencies that arise from the fact that we largely still have a legacy fee-for-service system that encourages waste and redundancy, as well as the high and ever-rising prescription drug prices.” We second that.

Go to full articlewww.cfo.com

Beth Umland
by Beth Umland

Director of Research, Health, Mercer

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