You’ve probably seen the horrifying projections about the American Health Care Act, or AHCA, and the expectation it will cause tens of millions of Americans to lose health coverage. A recent Quinnipiac poll shows the AHCA with 21 percent support. Less than half of Republicans polled approve of it. According to Tim Malloy, the assistant director of the poll, “The grim diagnosis from voters: Health care will cost more and deliver less.”
What gets less coverage is the negative effects the AHCA will have on businesses and entrepreneurs. At first blush, the AHCA’s elimination of employer mandates would seem like a boon to business owners. If Idaho’s goal is to be a hub of low-paying, low-skilled jobs, and remain one of the poorest states in the nation, the AHCA will help. However, in order to create the high-paying, skilled jobs Idaho so desperately needs, employers will have to offer benefits beyond salary to attract qualified people. The most coveted benefit, of course, is health coverage. A Harvard Business Review article from February 2017 shows that 88 percent of those surveyed would consider taking a lower salary in exchange for quality health care benefits. Given that reality, Idaho’s employers face a host of problems under the AHCA.
The first is uncertainty. No business likes that. Injecting instability into the healthcare market by overturning the existing system wholesale is, as a baseline matter, bad news for employers.
Second, the AHCA would significantly erode existing subsidies of health exchanges, making insurance much less available and affordable for those without employer-based coverage. Without at least the current level of subsidies, the health exchanges are unlikely to survive, eliminating a major avenue of coverage for employees who are not covered through employer plans. Over 105,000 Idahoans are currently covered through the exchange, and the vast majority (82 percent) receive subsidies. This includes many who are employed but whose employers don’t offer health benefits. If the AHCA causes the exchanges to collapse, employers will have to choose between picking up the tab for insurance or leaving those employees uninsured. This will cost employers financially and through lost productivity.
Erosion of the exchanges will also stifle entrepreneurship. Many businesses are started by those who leave a comfortable job to start a new enterprise. A big obstacle to doing so is the fear of losing employer-based health benefits. The exchanges currently offer an option for those would-be entrepreneurs to buy affordable coverage when they leave their job to found a new business. Starting a business is a risky enough proposition, but add to that a loss of health insurance, and fewer aspiring entrepreneurs will be willing to take the plunge.
Finally, employers who provide insurance can expect to see costs go up. If 23 million more people are uninsured as a result of the AHCA, as the Congressional Budget Office has projected, those people will start showing up at emergency rooms when they have health problems. Hospitals will have to eat those costs and, in turn, pass those losses onto health insurance customers – namely employers. This is already a problem in Idaho due to the 78,000 uninsured residents in the “gap” population. It will become much worse if the AHCA puts an additional 135,000 uninsured Idahoans onto the rolls. As such, businesses looking to attract high-skilled workers face stark choices: Maintain salaries while cutting health care benefits, or incur added costs just to maintain current benefits.
The existing health care law must and can be reformed. Doing so would be better for businesses than gutting it and rolling the dice with the American healthcare system. If Idaho wants to attract qualified workers to fill the thousands of high-paying jobs it leaves on the table every year, employers and entrepreneurs cannot be forced to navigate an unstable health care market that pushes their costs higher in unpredictable ways.
Rep. Ilana Rubel (D-Boise) is the assistant Democratic minority leader in the Idaho House of Representatives. She is a graduate of Georgetown University and Harvard Law School. She is serving her third term as a legislator.