Earlier today, House Speaker Paul Ryan canceled a planned House vote on the American Health Care Act, a bill that would repeal some provisions of Obamacare, allow insurance companies to sell policies across state lines, and replace some of Obamacare's needs-based subsidies with age-based tax credits. The AHCA was an attempt by President Donald Trump and the House Republican leadership to fulfill Trump's campaign promise to repeal Obamacare and replace it with something more in keeping with Republican ideals.
But the House Freedom Caucus, a group of about 36 conservative Republican representatives who seem to want Obamacare repealed with no replacement, vowed to vote against the bill in spite of concessions on some key points. If all 36 had voted no, and presuming very few if any Democrats would vote yes, AHCA would have been sure of defeat if it had gone to a vote. To make matters worse, some moderate Republicans also planned to vote against AHCA, especially after amendments were made in an attempt to please the Freedom Caucus.
What happens now? And how do you plan for employees' health insurance, or your own if you're a solopreneur? Here's what we know so far.
1. The employer mandate stays in place, at least for now.
Trump reportedly told House Republicans that this was their one chance to repeal Obamacare (officially the Affordable Care Act, or ACA). He and Ryan both say they are now moving on to other matters, specifically tax reform. If truly the Republicans don't try again to repeal Obamacare, the employer mandate requiring companies with 50 or more employees to offer them health insurance will remain the law indefinitely. If you've been putting off hiring that 50th person and/or buying a health plan for your employees, it may be time to take those steps.
2. It may be harder for your employees (and you) to buy an individual health plan.
Trump has also predicted that Obamacare would self-destruct on its own, a victim of rising premiums and a narrowing set of insurance plans for individuals to choose from. It's certainly true that Obamacare failed to stop continuing increases in insurance premiums, and that insurance carriers withdrew many of their plans from the exchanges (state or federal government-run health insurance marketplaces) where subsidized insurance plans have been sold to individuals since 2014.
From an individual insurance shopper's point of view, the problem is that under Obamacare, you can only receive a subsidy for your insurance if you buy it through an exchange. Meantime, many insurance companies have withdrawn some or all of their plans from exchanges before open enrollment for 2017.
With Republicans in control of the White House and both chambers of Congress, Obamacare is in limbo. The carriers may decide not to return any plans to the exchanges or even to withdraw more of them, given the exchanges' uncertain future. Outside the exchanges, your employees (and you) may find it harder to purchase individual insurance since there are no subsidies and premiums will likely continue to rise.
3. Results-based health care remains in place for now.
Most discussions of Obamacare revolve around how and whether Americans purchase insurance, how much they pay for it, and what it covers. But there's another aspect to Obamacare which may be even more important: Measures which pay health care providers on a pay-for-performance basis, meaning that instead of being paid more the more procedures they do, health care providers are paid when they actually make patients healthier. (For example, hospitals must now treat patients for free if they acquire certain common infections while in the hospital.)
These provisions created a fundamental shift in how health care is delivered. Not only is it beneficial for patients (because health care providers now have an incentive to focus on preventive care, for instance), it also created massive opportunities for innumerable startups. Like the law itself, those startups have been in limbo. But if health care providers continue adapting to a pay-for-performance world, with no Obamacare repeal on the horizon, those opportunities will only increase.
4. Of course, all of this could change.
Trump and Ryan's standoff with the Freedom Caucus over the last few days was a classic example of brinksmanship. And it could be their declaration that they're not going to bother withObamacare anymore is more of the same. If so, we could see another version of an Obamacare replacement make its way to the House sometime in the next few months, or even conceivably the Senate. If so, then the changes we expected under the American Health Care Act could still come to pass.
But I'm not holding my breath. This week's events have demonstrated that repealing Obamacare is a minefield for Republicans, especially those whose constituents stand to lose coverage under the American Health Care Act (let alone a repeal with no replacement). Stuck between two unattractive choices, Republicans on the left and right of their party could simply blame each other for the fact that no one could kill Obamacare. And then it might stay in place for years to come.