Tevi Troy writes for Politico about the Affordable Care Act’s potential impact on employer health plans.
Welcome to the new conventional wisdom: Employer-sponsored health insurance, which developed by accident in World War II and subsequently became the main pillar of our health system, is in danger of disappearing. A new study by S&P Capital Research, a financial research firm, predicts that the employer-based system will most likely disappear by 2025. Even Ezekiel Emanuel, one of the architects of the president’s health care reforms and the brother of former White House chief of staff Rahm Emanuel, says in his new book that the bill’s health care exchanges will eventually supplant the existing system.
If true, this would be a disruptive development, as 170 million Americans now get their insurance via their employers. Like so much else in health care, the story of this rapid shift from reliance on employer coverage to its rapidly predicted demise centers on the Affordable Care Act.
When the Obama administration was promoting the ACA in 2009 and 2010, continued employer involvement was a given. Certainly the administration’s rhetoric would have had one think so. Not only did President Barack Obama repeatedly, and famously, promise that “If you like your health plan, you can keep it,” but other administration officials made the case as well. In 2009, Robert Gibbs, then the White House press secretary, said on CBS’ “Face the Nation”: “The president intends to build on the employer-based insurance market already in place” — and no administration spokespeople suggested otherwise.
From a political standpoint, it was important to make this case, since the polls have shown consistently that Americans with employer coverage were satisfied with that coverage. Disrupting it would have made it significantly harder to enact the ACA, if not altogether impossible.
But pass it did, and as the ACA continued to face political challenges, most of the bill’s advocates continued to claim that employees would be largely unaffected, even as small businesses were seeing that the ACA would increase their costs via a collection of taxes, fees and mandated forms of coverage. Despite these developments, MIT economist Jonathan Gruber, another of the ACA’s architects, argued that 80 percent of Americans’ health coverage, mainly those in employer plans, would be unaffected by the ACA.
But in the past few months, perhaps as the likelihood of the ACA’s repeal has diminished, a new argument from the ACA’s supporters has emerged. In February, Gruber told The Washington Post, “Employer-sponsored insurance is like a crumbling building. … There are essentially three things you can do: You can rebuild it, knock it down, or try and set up nets outside so people can be safe when they jump.” Or, as Emanuel puts it in his book, less colorfully if no less starkly, “By 2025, few private-sector employers will still be providing health insurance.”
