Many folks I’ve talked to recently have admitted they’re not worried about healthcare because they get their healthcare through their employer. They don’t think it will affect them and as long as it’s not affecting them, it’s not an issue.
According to the Congressional Budget Office (CBO), employers will drop 2 million people from their healthcare coverage in less than 4 years under the AHCA. The estimated number of people dropped grows to 7 million by 2026.
Here’s why and how.
In June 2013, 70.8% of workers between the ages of 18 and 64 had employer-sponsored healthcare coverage. This is roughly 155 million people or half of all Americans with insurance. Comparatively:
- 76 million are covered by Medicaid
- 55 million over 65 are covered by Medicare
- 11.1 million purchase through the healthcare exchange
Under the Affordable Care Act, three years later in 2016, 72.1% had employer sponsored coverage. Contrary to what many have heard, under the ACA, the percentage of people with employer-sponsored coverage actually increased slightly.
In other words, the Affordable Care Act was good for employees as employer sponsored coverage increased.
What many don’t know under the new Trump/Ryan AHCA proposal is that the bill repeals the employer mandate that requires businesses with over 50 employees to offer affordable/minimum value medical coverage to their full-time employees and their dependents up to age 26.
While this is unlikely to affect businesses who need to compete to attract top talent, it is more likely to affect businesses where labor has commoditized and businesses don’t need to offer healthcare to attract workers. Jobs like retail jobs, call centers, fast food, or other low-skill businesses. Just as businesses have driven down wages, some are likely to cut healthcare.
Second, the estimate includes people who might decide not to enroll in their employer plans because there would be no penalty for those without insurance. These might be folks who still have to pay a part of their plan and might simply choose to go without rather than pay. My guess is that this is a very small group.
The third reason the CBO estimates 7 million less will be insured by employers under the AHCA by 2026 is that tax credits might encourage some people, especially those who make close to the $75,000 cutoff for tax credits, to purchase their insurance on the market rather than through their employer.
One thing we know: If businesses do stop offering health insurance, the plans available in the market are likely to pay less, cost more, and therefore shift more of the costs onto working people.
If you know some folks who think they’re safe because they get their health insurance through their employer, let them know that it’s estimated 7 million will lose their employer-sponsored healthcare under the Ryan/Trump AHCA.
David Akadjian is the author of The Little Book of Revolution: A Distributive Strategy for Democracy (now available as an ebook).