ICYMI: Wall Street Journal: Little-Noted Provision of GOP Health Bill Could Alter Employer Plans

WASHINGTON – With the House of Representatives set to vote on Trumpcare today, the Wall Street Journal highlighted how a provision in the bill would negatively affect the roughly fifty percent of Americans who get health insurance through their employers. The provision allows states to eliminate the requirement under the Affordable Care Act that insurers must cover a set of Essential Health Benefits – including substance use disorder and behavioral health services – and would allow insurers to impose lifetime limits on care. Under Trumpcare, large employers would be permitted to choose to follow the benefit requirements of whichever state they choose, including those that gut consumer protections.

Key points:

• “Many people who obtain health insurance through their employers—about half of the country—could be at risk of losing protections that limit out-of-pocket costs for catastrophic illnesses, due to a little-noticed provision of the House Republican health-care bill to be considered Thursday, health-policy experts say.”
• “The provision, part of a last-minute amendment, lets states obtain waivers from certain Affordable Care Act insurance regulations. Insurers in states that obtain the waivers could be freed from a regulation mandating that they cover 10 particular types of health services, among them maternity care, prescription drugs, mental health treatment and hospitalization.”
• “Under the House bill, large employers could choose the benefit requirements from any state—including those that are allowed to lower their benchmarks under a waiver, health analysts said. By choosing a waiver state, employers looking to lower their costs could impose lifetime limits and eliminate the out-of-pocket cost cap from their plans under the GOP legislation.”
• “The impact on employer plans expands the scope of the health bill to affect, potentially, everyone not insured by Medicare or small-business plans, since the bill also includes cuts to Medicaid and changes to the individual market. Employer health plans are the single largest source of health insurance in the country, with about 159 million Americans receiving coverage through their jobs.”

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Many people who obtain health insurance through their employers—about half of the country—could be at risk of losing protections that limit out-of-pocket costs for catastrophic illnesses, due to a little-noticed provision of the House Republican health-care bill to be considered Thursday, health-policy experts say.

The provision, part of a last-minute amendment, lets states obtain waivers from certain Affordable Care Act insurance regulations. Insurers in states that obtain the waivers could be freed from a regulation mandating that they cover 10 particular types of health services, among them maternity care, prescription drugs, mental health treatment and hospitalization.

That could also affect plans offered by large employers, health analysts said.

The ACA prevents employer plans from putting annual limits on the amount of care they will cover, and it bars lifetime limits on the 10 essential benefits. But in 2011, the Obama administration issued guidance stating that employers aren’t bound by the benefits mandated by their state and can pick from another state’s list of required benefits. That guidance was mostly meaningless because the ACA established a national set of essential benefits.

Under the House bill, large employers could choose the benefit requirements from any state—including those that are allowed to lower their benchmarks under a waiver, health analysts said. By choosing a waiver state, employers looking to lower their costs could impose lifetime limits and eliminate the out-of-pocket cost cap from their plans under the GOP legislation.

The measure would give employers added flexibility to take steps that could lower costs by limiting more-expensive coverage areas. And it would lessen the federal regulation of insurers, a goal of GOP lawmakers who believe the ACA is an example of government overreach.

The impact on employer plans expands the scope of the health bill to affect, potentially, everyone not insured by Medicare or small-business plans, since the bill also includes cuts to Medicaid and changes to the individual market. Employer health plans are the single largest source of health insurance in the country, with about 159 million Americans receiving coverage through their jobs.

“It’s huge,” said Andy Slavitt, former acting administrator of the Centers for Medicare and Medicaid Services under President Barack Obama. “They’re creating a backdoor way to gut employer plans, too.”

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