Bill Kramer, MBA, is the executive director for National Health Policy at Pacific Business Group on Health.
The appointment of a new conservative justice to the Supreme Court raised serious concerns that the legal challenge to the Affordable Care Act (ACA) would be successful. Following oral arguments over the law’s individual mandate in front of the Supreme Court on November 10, however, it appears most of the law is likely to survive. Still, we’re not out of the woods and it will be sometime before we know the outcome.
Overturning the law would entirely be cataclysmic. The primary impact, of course, would be on the estimated 12 million people covered under Medicaid who became eligible because of the ACA who would lose their coverage, the 9 million who receive subsidized health insurance through the federal and state exchanges, and those with preexisting conditions who would likely be screened out of individual coverage.
Although people who get their health insurance on the job were largely untouched by the ACA, large employers—and by extension, their employees—have an interest in the outcome of the SCOTUS decision. Here, we explore 3 ways a ruling against the ACA could impact employer-sponsored health insurance.
1) New Benefits Under the Law
The ACA ushered in coverage for adult children up to age 26 and did away with lifetime dollar limits on insurance coverage, a critical protection for people with serious illnesses, such as cancer, who easily wrack up eye-popping medical bills. Paying in full for preventive services with no cost-sharing, such as colonoscopies and mammograms, was also a requirement of the ACA with which large, self-insured employers were required to comply. If the law were overturned, employers would have to decide whether to eliminate these enhanced benefits. Based on surveys of our members, who are jumbo private employers and public organizations, it’s unlikely that many would do so. The story for midsize employers, however, may be very different.
2) Add Costs to Employee Health Insurance
In its 2018 report, the Business Case for Expanded Coverage, the Pacific Business Group on Health found that a big increase in the number of uninsured people due to a full repeal of the ACA would dramatically reduce hospital revenues. That’s likely to put upward pressure on prices paid by those with employer-sponsored coverage. It would also likely lead to poorer health for millions of people no longer able to access health care services such as preventive screenings, treatment for chronic conditions, mental health, and opioid abuse. This means that the pool of potential employees would be less healthy, leading to higher health benefits costs for newly hired employees. In other words, employers have a stake in ensuring that everyone has coverage and access to needed health services.
3) Tools to Encourage Competition and Lower Prices
The ACA also created tools intended to increase market competition and lower costs. Under the law, for example, a new mechanism for approving biosimilars offered the potential of new drugs that could introduce price competition for expensive biologic medicines. The Center for Medicare & Medicaid Innovation was established with the goal of changing the way doctors and hospitals are paid to reward improved quality and/or lower costs. And the development of accountable care organizations created the potential for improved care coordination and quality, as well as lower costs. While less direct in their impact, over time the loss of these tools could lead to higher overall costs for employers and the millions of Americans who get their health insurance on the job.
Beyond ACA Repeal
Although the repeal of the ACA would have serious consequences, it is not the only important health policy issue for employers and their employees. In addition to dealing with the coronavirus disease 2019 pandemic, policymakers must address the ongoing crisis of high health care costs. Cost containment is not getting the attention it deserves. We need to find ways to strengthen primary care, accelerate the movement to population-based payment models for hospitals and clinicians, prohibit anticompetitive practices by certain health care industry players, and address the problem of industry consolidation.
Our nation faces serious health care challenges, including the possibility of ACA repeal. We will need to find ways to overcome partisan differences to address the ongoing problems of inadequate coverage and access, high costs, inconsistent quality, and health inequities. Employers can and should make their voices heard in these debates.