The Congressional Budget Office predicts that fairly few employers will stop offering health-care coverage in response to the Affordable Care Act. A new survey from McKinsey predicts that lots of employers will stop offering coverage. So who’s right?
At some level, we just don’t know. But recent experience suggests the CBO has the better of this one. The Massachusetts reform was a good test case, as it also carried the combination of new options for workers and an easy opt-out for employers. So what happened? Employer-based coverage is now more prevalent in Massachusetts than it was before the law was passed. So much as employers might be theoretically interested in getting out of the health-care business, that’s not an easy conversation for them to have with their employees. Never underestimate the power of the status quo.
But let’s say McKinsey is right and employers begin dropping workers by the millions. That would leave us with two options: We could stop it from happening by passing a strong employer mandate, or we could embrace it as a long-overdue opportunity to move beyond the employer-based health-care market. It might even be a chance to convert the tax break for employer-based insurance into a refundable tax credit that everyone gets, no matter their employment status. That’s long been a hope of conservatives — both John McCain and Paul Ryan have proposed versions of it — and so long as it happens in the context of a reformed system where consumers are protected, insurers are regulated, and risks are pooled, it’d be very good policy.
Actually, I’m not being entirely fair. There’s also a third option: Republicans could block attempts to keep employers in the system and block attempts to move beyond the employer-based system and simply try to make the law as expensive and unsustainable as possible. But if it’s 2018 and the Affordable Care Act has been implemented and 30-some million Americans are getting insurance through it and the problem is that employers are dropping coverage, my guess is that a Republican proposal to take coverage from many, many more people is not going to go over well.