GOP health care bill would let employers cap benefits
The Republican health care plan that passed the House on Thursday targeted a key protection for Americans who get their health insurance through work.
It would allow health insurance companies to impose lifetime and annual caps on benefits for those who get coverage through a large-employer plan. Former President Barack Obama’s health care overhaul banned insurers from imposing such caps, and public opinion surveys have shown that prohibition was popular.
Before the Obama reforms, people who got a serious medical problem could be cut off from their health coverage once they hit their insurance limit. They sometimes went into debt to continue their treatment.
Until the last few days, the provision had been a little-noticed part of the bill that would help congressional Republicans and President Donald Trump make good on their promise to undo Obama’s key domestic accomplishment. Most of the attention on the Republican plan was focused on how it could result in 24 million Americans losing insurance, primarily by rolling back expanded Medicaid benefits.
But the potential impact for workers covered by large-employer plans is setting off alarms. Coverage caps could create major problems, especially for younger people who have serious illnesses, said Matthew Lesser, a Democratic state representative in Connecticut.
“Cancer is tough enough as it is without worrying about hitting some arbitrary cap,” said Lesser, who survived testicular cancer and has been in remission for five years.
Lesser introduced a bill this year requiring Connecticut to preserve many elements in Obama’s health law even if Congress undoes them. A task force is studying the idea in the state.
But he said the way the employer plan provision is structured might make it difficult for states to do anything about it, even if the legislature and governor want to preserve a ban on coverage limits and other benefits.
The GOP bill faces an uncertain fate and potentially significant revisions in the U.S. Senate.
Under the version that passed the House, states would be able to create their own list of “essential health benefits.” Those benefits — currently set by the Obama-era health care law — determine services on which large employer plans cannot impose annual or lifetime coverage caps. There also must be an annual out-of-pocket spending maximum for those covered.
Under the Republican bill, large employers would be able to use the essential health benefits definition from any state, some analysts say. That’s where the impact could come.
“If Alabama opts to cut a bunch of health care protections, you can bet that employers will use Alabama as a benchmark,” said Shaun O’Brien, the AFL-CIO’s assistant policy director for health and retirement.
O’Brien said that in collective bargaining negotiations, employers could try to weaken some health benefits by saying the law gives them no real choice. Not everyone is sure that’s how it would go.
Even if businesses could impose benefit caps and eliminate out-of-pocket maximums, that does not mean they would, said Steve Wojcik, vice president of public policy at the National Business Group on Health, a group that represents about 400 big businesses.
He pointed to a survey of businesses released this week by Willis Towers Watson that found half of businesses said they would not impose lifetime coverage limits even if they were allowed to; 15 percent said they would.
“I don’t think there’s any reason to expect that large employers are not going to continue offering good coverage that their employees value,” Wojcik said, “including to protect them against financial ruin if their employees have major health problems.”
He said not enough attention is being paid to another element of the bill that delays a tax on high-end health plans. Wojcik said that is a beneficial part of the GOP legislation and would help companies and their workers.
Limits on coverage were common before Obama’s health insurance reforms. A 2009 report from the Kaiser Family Foundation, which studies health policy, found that about 3 in 5 people with employer-provided insurance had lifetime caps on their health benefits while about 20 percent had no annual limit on the amount they might have to pay for health care.
Plans that include lifetime coverage limits typically would be cheaper for employers and make benefit expenses more predictable for their budgets, said Larry Levitt, an insurance expert at the foundation.
He said that if the return to coverage caps survives and becomes law, some employers might offer different benefits to different workers: Skilled workers might get better plans with no limits on coverage, while lower-wage workers who are easier to replace would be offered skimpier coverage that would include an annual and lifetime cap.