The Senate Bill for the repeal of the ACA was introduced Thursday, June 22nd. The bill is very similar to the House bill. However, both the House and Senate bills would likely lead to higher cost healthcare policies with reduced benefits. For example, both the House and Senate bills allow states to reduce the number of essential health benefits that policies would be required to cover, thus leading to a cap on costs on formerly essential benefits, such as maternity benefits.
A side by side comparison of many of the changes of the ACA can be found here.
Both bills lay the issues of coverage at the States’ feet. If the States make changes to essential healthcare benefits, for example, the employers will have to pick up the slack. With a war for talent existing, especially in a time when skilled talent is lacking, employers use benefit packages as an attraction tool. Insurance companies will likely price appropriately, raising the costs to maintain the no annual or lifetime cap on the attractive but formerly essential health benefits.
Both bills hit Medicaid with deep cuts. As many older employees are living in the sandwich generation, employers will have to be creative to keep talent when it’s being pulled to care for parents. This issue could lead to substantial knowledge fund losses. Medicaid pays when assets are depleted for nursing home care as well as for home care. Funds will likely not be available for these types of long-term care.
Further, employers will no longer be penalized for not providing healthcare for their employees. But if they do not create benefit packages for the lower paid employees, especially those with children, they could experience high turnover. Employees will seek out employers offering benefits.
In addition, allowing states to have a work requirement to access Medicaid will likely backfire. Seniors, disabled, and children may not be able to join the working labor force. It will likely not increase the labor force participation rate and create greater pressure on employers to provide employees those benefits that Medicaid cut.
In other words, the repeal of the ACA will probably lead to a dramatic shift in the role an employer plays in the lives of its employees. With shareholder returns as a driving force for many employers, they will be conflicted with the additional social costs they must bear. The balance of cultural drivers of employer behavior is delicate, which may lead to more automation to reduce labor costs.
All these factors can lead to the rise of unions in the workforce. The buying power of unions could provide the benefits employees need and seek, but are unable to be provided by employers (who will then indirectly pay for them if their workforce unionizes). With no Cadillac tax looming and repeal likely, unions will be free to compete for the affections of the workforce through benefit packages that employers know are drivers for talent. Even part-time employees could receive very rich benefit packages. At the same time unions can pressure employers to raise real wages. The private sector unions could easily double or triple their size.
There is no guarantee that the Senate Bill will pass. Four to six republican senators are against the bill. The vote for the bill has now been delayed. If it does pass in a future vote, employers need to be prepared for a new future and HR needs to take the lead in this endeavor.
Source: LA Times 6/22/17; The Wall Street Journal 6/22/17; Washington Post 6/22/17