Two weeks ago, President Trump and House Republicans succeeded in their attempt to dismantle Affordable Care, or better known as Obamacare. The bill from the House still has a long way to go and could change in its final form. This blog is not going to debate about the differences between ACA (Affordable Care Act) and AHCA(American Health Care Act) but focus on how the workplace will be impacted or how employers and employees could be impacted by these big changes as they now stand in the House version.
SmallBusiness.com defines small businesses as those with fewer than 500 employees. According to the website, the first five years for small businesses are critical. Half do not make it and it’s worse at 10 years because only a third make it. The website says many of the healthcare changes won’t necessarily happen for several years which means some of these businesses won’t receive any benefit.
What about the impact for workers in small businesses? Under the AHCA, small businesses would no longer be mandated to provide coverage for employees so that may help the business survive but will it help the employees? Would it mean greater employee turnover because employees will be looking for jobs that provide healthcare benefits? If so, that’s a cost that could increase and be detrimental to the business. Or, on the other hand, if a small business doesn’t have to pay health insurance benefits it may provide an opportunity to providepaid time off for sick leave, or maybe match an employee’s contribution to a health savings account. As far as self-employed individuals, or gig workers, are concerned, the Congressional Budget Office and Kaiser Family Foundation report self-employed individuals will be negatively impacted, especially older self-employed individuals. Younger, self-employed individuals will fare better.
The New York Times, after analyzing the House bill, also reports changes. One of those is each state may have different coverages or no coverage. Employers will not be required to have specific mandates so they can make changes to the healthcare insurance they provide to employees. This may mean less coverage but not necessarily less cost for either the employer or employee. Insurance companies could charge employers more or employees could pay more in their share of the cost. Since there is a provision in AHCA for additional savings under HSAs, some employers may decide an HSA is the employee health benefit and possibly match contributions.
For some workers, if the costs for healthcare go up, as is projected for the AHCA, this could be a real financial burden. If an employer does not provide health insurance, this, of course, increases the risk for workers not to obtain insurance and shoulder more of the costs of healthcare. Without coverage, families may put off receiving care which may increase the cost even more if healthcare attention becomes absolutely essential. The other concern for employees is not all employers provide paid sick leave. If an employee cannot afford to take a day off from work, this could also increase costs for the employee and the employer. Viruses can spread from one employee to another putting them in vulnerable situations not knowing whether to lose pay or infect others with the illness. In addition, viruses circulating in the workplace can make it less safe and not as productive which can add costs.
According to the Economic Policy Institute(EPI), there are many workers who do not receive paid sick leave. In 2011, just a little over half of private sector workers have paid sick time. EPI reports those at the lower end of the wage scale are more likely to have jobs that don’t provide paid sick leave and without paid sick leave it can break down families. Families need financial security. Paid sick leave helps to provide that financial security. There is no provision in either AHCA or ACA for sick pay but if employees don’t have sick pay and there is an increase in health costs under AHCA, that only causes more hardship for families. The pressure also increases when it’s a single parent household. What happens to the family income if a child is seriously ill and the parent either must work and be forced to ignore their sick child or take time off and lose wages when healthcare is necessary. The other problem that can occur is a single parent may feel the need to send a sick child to school or day care because no one is home to take care of the child and the parent needs to work to pay bills. Sending a child to school infects other children and the child could get worse causing the need for health care services that may not be available.
According to the Bureau of Labor Statistics’, Occupational Outlook, Spring, 2014, the healthcare industry leads in job growth compared to other industries. In fact, the report projected that between 2012 – 2022 more than 4 million jobs would be created. It’s important to understand that some of those jobs are not directly related to patient care. Some can be janitorial and housekeeping jobs, office support jobs, cooks and cafeteria workers and many other jobs that provide indirect services. The report does not mention the number of IT jobs that are impacted or people that produce medical care products that truly are indirect care jobs. The lack of healthcare coverage has some very direct as well as indirect consequences such as described in this paragraph.
But those jobs could disappear with the healthcare changes are the number. Did jobs increase as described in the previous paragraph because of the Affordable Care Act? The report from BLS says it’s more about people needing healthcare services. Even during the recession, it says, healthcare jobs were continuing to increase. That was before Affordable Care. But in a Forbes article of June 5, 2015, it says growth in healthcare jobs started in 2010 – around the same time the healthcare bill became law. From 2014 through 2015, healthcare created more than 100,000 according to the report from Forbes. The number of people able to obtain insurance definitely had a major impact not just on jobs but on hospital income. One hospital saw a 50% increase in income for multiple years. With the changes under AHCA, the number of jobs and the increases in income will be substantially reduced because of cuts to Medicaid and subsidies. EPI says the tax cuts that are to be under AHCA will not have the substantial benefit to jobs and the economy that Medicaid expansion and subsidies have provided. By 2022, the number of jobs eliminated will be 1.8 million across the country. Insurance costs for individuals, EPI says, will increase substantially. Deductibles, co-pays and premiums will increase expenses for many people. They estimate the total out-of-pocket costs for the entire number of people purchasing policies under AHCA will be $25 billion annually until 2026. This will decrease purchasing power for many people so it verifies how the economy will be impacted.
It is true everybody can get care at a hospital but receiving care also means hospitals have to pay for the supplies, medications, labor that is needed to take care of those who can’t pay. Without having the money to pay for all of that, care can be reduced. While it’s not always good to equate care with staffing, care can be impacted. Jobs can be lost and not just the staff at a hospital but the “trickle-down” effect of those who support hospitals. EPI didn’t say whether the 1.8 million jobs lost includes those who support hospital operation but if it isn’t, the jobs loss will be far greater than that.