L.A. Underwriters Oppose Republican ACA Replacement Plan

L.A. Association Says the GOP Draft Will Do More Harm Than Good to U.S. Healthcare System :::::

The Los Angeles Association of Health Underwriters, a local chapter of the preeminent organization for health insurance professionals in the county, warned that Republicans in the House of Representatives are heading for an unworkable replacement for the Affordable Care Act. Association President Dawn McFarland stated that “Laahu members have spent their careers working to help employers and individuals obtain quality, affordable health insurance. There are key provisions in the leaked discussion draft of the House GOP’s ACA reform plan that could do more harm than good to America’s healthcare system.”

Among the concerns express by McFarland is that the draft proposal changes employer incentives to provide medical insurance to employees. Given the recent dramatic increases in the cost of employee benefits, employers report being at a fiscal tipping point. Reducing incentives to offer coverage could potentially cause some employers to stop providing health insurance to their workers.

The association seeks to avoid this outcome as employers fund most health insurance costs for approximately 83 percent of Americans. To reduce this funding source would shift costs to working families, public insurance systems such as MediCal and MediCare, and health care providers like hospital trauma centers and community medical clinics.

The draft proposal calls for capping the amount of health insurance premiums employers can deduct from their taxes. The association believes this equates to an unfair financial burden on employees, especially those already struggling with narrow margins. Based on the association members’ experience, employers would likely shift the premium amount above the tax-deductible cap to their employees. High income workers could afford to go without coverage or pay the additional amount. Less compensated employees, however, would be more likely to drop coverage and rely on the health care safety net (community clinics and hospital emergency rooms) for care. The result is a weakened group health marketplace and a heavy financial burden on America’s middle class.

Another concern put forward by the association is that, depending on when health care reform legislation is signed into law and the effective date of the changes, there may not be adequate time for federal and state regulators, insurance companies, brokers and employers to prepare for the changes. This would dangerously disrupt the health insurance market. The association is calling for a transition time that adequately enables all affected stakeholders to develop a certainty about the new requirements and provide sufficient time to meet them.