Among much else, Republicans will need to repeal the “Cadillac tax.”
On Saturday, Democratic Senators Chuck Schumer and Bernie Sanders called for nationwide protests to stop Republicans from repealing the Affordable Care Act.
The trigger event was Friday’s confirmation of Dr. Tom Price as President Trump’s Secretary of Health and Human Services. Price is charged with making good on Trump’s promise to repeal and replace Obamacare.
Already, protests against repeal are disrupting town halls and making headlines. But the nation won’t be fooled by demonstrators carrying signs to save the ACA. The silent majority — mostly working people — have been clobbered by the health law. They won’t be taking to the streets. They made their views known on Election Day.
Schumer and Sanders talk nonstop about the 20 million covered by the ACA (who will likely be covered by a GOP replacement law as well). Democrats ignore the 156 million people with on-the-job coverage who are paying higher deductibles and taking home less pay because of Obamacare. That’s half the nation.
Not to mention the millions who had their employer-provided coverage canceled, had their hours cut, or lost their job altogether.
What should Price and GOP lawmakers focus on? The public wants lower out of pocket costs, according to the latest Kaiser Health poll. Obamacare has pushed up deductibles for people with on-the-job coverage by at least 50%.
The law forces all but the smallest employers to provide a benefit package far costlier than most pre-ACA coverage. It also hits employers with new taxes. Employers are passing these costs on to workers, raising their out-of-pocket costs.
In New York, 49% of manufacturers are increasing their workers’ deductibles because of Obamacare, reports the New York Federal Reserve.
GOP lawmakers aiming to “replace” Obamacare must not repeat the mistake of imposing a Washington-designed benefit package on employers. More flexibility for employers means more workers covered at a lower cost. Mandates end up taking money out of workers’ pockets.
Worries about the “Cadillac” tax are also pushing up out-of-pocket costs. The GOP must repeal this tax. Across the U.S., union workers are getting a raw deal in their new contracts because a 40% Cadillac tax on generous health plans is supposed to take effect in 2020. Contracts being negotiated now are imposing higher copays and deductibles to make health plans less generous and dodge the tax.
President Obama wanted to penalize “fancy plans that end up driving up costs.” But not just fancy people have these plans. The GOP should avoid this approach like the kiss of death.
Republicans need to emphasize that repeal is a jobs program. Obamacare has made looking for a job harder. In New York, service and manufacturing enterprises are cutting back on hires because of the ACA, according to the New York Federal Reserve Bank.
Without repeal, the ACA will cost the nation 2 million full time jobs by 2025, according to the Congressional Budget Office. Before Congress passed Obamacare, the CBO warned it would reduce the workforce. Democrats ignored the warning.
As many as 1 million low-wage workers in low margin industries — retail, hotel, and food services — have had their hours cut because their employers needed to skirt the Obamacare mandate. Repeal will allow these industries to get back in the hiring business.
The evidence is overwhelming: Good riddance to ACA’s employer mandate. Only Washington could design a mandate that results in a projected 8 million fewer people having on the job coverage by 2018.
If done right, repeal will help forge a new Republican coalition with labor. The Democratic Party has stopped listening.
One caveat for GOP lawmakers. House Republicans want to cap the tax exemption on employer-provided health plans. That means workers with generous plans will get hit with a new tax — the Cadillac tax-lite. It’s not on President Trump’s agenda. He promised tax cuts, not hikes.
Worse, the cap would betray union workers who just gave Trump his remarkable victory.
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