Legislation overturning the Affordable Care Act’s expansion of the small-group insurance market is likely to get a look this fall, according to multiple sources on and off Capitol Hill, and it may be the Obamacare “fix” with the best chance of becoming law.
All the usual caveats apply: Republicans would have to convince the rank-and-file to accept a smaller-scale change to the law while waiting for full repeal. Democrats must be willing to agree to any change at all. Nothing involving Obamacare comes easy.
But of all the “fix” bills floating around the Capitol, the small-group provision might have the most working in its favor: It has bipartisan support, costs little to nothing to change, and even some Obamacare supporters say the law could function fine with the alteration.
There is also a looming deadline, as the ACA’s mandate that states increase the definition of their small-group market from employers with 50 or fewer employees to 100 or fewer will start to take effect in some states on Jan. 1. Bills in the House and the Senate would nix that requirement, instead leaving the definition at the historical norm of 50 while allowing states to set it higher if they choose.
Multiple sources said Senate Republican leadership has begun taking its caucus’s temperature on the measure for action in the fall. Nothing has been set yet, however. “The Leader hasn’t made any scheduling announcements on that,” Don Stewart, a spokesman for Senate Majority Leader Mitch McConnell, said in an email.
The Senate bill, introduced by Republican Sen. Tim Scott and Democratic Sen. Jeanne Shaheen, has 27 cosponsors, including prominent members such as Senate Finance Chairman Orrin Hatch and the No. 3 Democrat, Sen. Chuck Schumer. The House’s version, introduced by GOP Rep. Brett Guthrie, has 207 cosponsors. Six Democrats have signed onto the Senate’s bill, enough to overcome a filibuster if all the Republicans are also on board, and 39 have joined the House’s.
“It is probably one of the most realistic changes at this point that we can see,” said Katie Mahoney, the U.S. Chamber of Commerce’s executive director for health policy. The Chamber has formed a coalition with other big lobbying groups, such as the National Restaurant Association and the National Association of Manufacturers, to push for the change. The Chamber is exploring media buys to continue elevating the issue in the fall.
If the measure clears Congress with substantial majorities, many think President Obama would be amenable to this kind of change to his signature law. His administration has repeatedly said that it is open to tweaks, with the president himself saying, “let’s figure out how to make it better.”
“It just strikes me that this is pretty much a no-brainer,” said Tim Jost, a health law professor at Washington and Lee University who generally supports Obamacare. “I’d be very surprised if the president would veto this unless it comes glommed up with all kinds of other stuff.”
So, if axing the 100-employee definition is a no-brainer, why was it included in the law in the first place? Jost said the motivation was to improve the small-group, 50-and-under market, which has historically had more volatile costs. By adding businesses with up to 100 employees, the thinking was it would make the market more stable and more attractive to insurers.
But a few problems would likely arise, Jost said. First, while prices might go down for the 50-and-under businesses as their market grew, the 51-to-100 businesses would almost certainly see their prices go up. They would be moving from the more stable and typically less expensive large-group plans to the small-group setting. The small-group market is also subject to some Obamacare rules, such as covering certain essential health benefits, that the large-group market is not. Some estimates have projected that costs would actually increase for everybody.
Second, many of those same employers could lose their current plans because their insurer doesn’t operate in the small-group market. Jost said he would expect “a big disruption” if the change took effect, one made particularly acute by the controversy over people losing their health plans in 2013 before Obamacare’s insurance marketplaces opened.
Lastly, for the reasons above, businesses with younger and healthier workforces might then decide to switch to self-insurance. That’s already a risk for Obamacare more generally, because it would adversely affect the market if it happened on a broad scale, and the changing small-group definition exacerbates that risk.
“You may just have healthy groups exiting the market altogether,” Jost said.
But even given all that, it’s far from certain that the ‘fix’ will be enacted. The biggest question is whether the Republican caucuses as a whole will accept it, without attaching any poison pills that would make it untenable for Democrats and Obama.
One lobbyist advocating for the legislation argued that it should be an easy sell to conservatives: It repeals an Obamacare provision, would prevent some people from losing their current health coverage, and returns power to the states. But for at least a handful of Republicans, anything less than full ACA repeal is tantamount to surrender. To advance the measure, congressional leaders will need to keep that sentiment contained to a small minority of far-right conservatives.
There are also sure to be some Obamacare supporters who won’t go along with the change. Senate Minority Whip Dick Durbin, an Illinois Democrat, was a proponent of increasing the small-group market back in 2009. Small Business Majority, a pro-ACA group that has often served as a counterweight to the Chamber and the National Federation of Independent Businesses, would oppose the bills, according to its president, John Arensmeyer.
He argued that the law’s opponents have been wrong before about alleged ill effects that the ACA would have, and he thought they would be wrong again about the negative impact for some employers if the new small-group definition were implemented.
“We feel that ultimately there needs to be a larger pool, that’s going to be a stronger pool, more companies in it, more lives in it. Right now, small businesses below 50 are being disadvantaged by the fact that the market above 50 doesn’t have to play by the same rules,” he said. “Pretty much consistently to date, all of the voices of doom and gloom, the Chicken Little voices out there, have been proved wrong.”