Michael Hiltzik: Trump is proposing to reduce the employer health insurance system to utter chaos

Michael Hiltzik, Los Angeles Times on

Published in Business News

"This proposed remedy is illogical on many levels, in part because the ACA includes provisions that touch on almost every aspect of our health system," assert Georgetown experts Emily Curran, Dania Palanker and Sabrina Corlette. They cite the law's provisions affecting "the federal Medicare program, which is not operated on a state-by-state basis, Food and Drug law governing the review and approval of prescription medicines sold nationwide, as well as several federal taxes designed to pay for the new spending under the law."

But the most injurious effect might be on employer-sponsored health insurance, they argue. Bifurcating federal oversight of health insurance would strike at the heart of ERISA, the Employee Retirement Income Security Act of 1974 that was designed to create a uniform federal regulatory regime over pensions and employer health benefits.

"Before ERISA was enacted, employee benefit plans were subject to different state laws, often creating confusion for employers, especially those who operated across multiple states," the Georgetown analysts write. "ERISA makes it easier for employers offering health benefits to employees, retirees and dependents living in multiple states because the employer only needs to comply with federal ERISA law."

The ACA augmented ERISA by adding such mandates as coverage of preventive services without co-pays or deductibles and outlawing waiting periods for coverage of preexisting conditions and lifetime benefit caps. Those rules "ensure that employees have equivalent access to comprehensive, quality care, regardless of state of residence."

The DOJ's proposal would shatter that uniform system.

"Consider an employer based in Texas with employees in California," the Georgetown team writes. "Do the employees in California retain all of the ACA protections because they are residents of California, leaving an employer based in Texas having to provide those protections to some employees but not others? Or does the employer no longer have to comply with the ACA for any employees, retirees, or their dependents if the health plan is based in Texas? What if all the employees live in Texas, but some dependent children have moved out of state?"


The authors wonder whether the DOJ even comprehends the chaos that would result from its proposal. During the oral arguments at the Court of Appeals, a DOJ attorney figuratively threw up his hands. "A lot needs to get sorted out and it's complicated," he told the three judges pondering the appeal.

That underscores the danger in placing the fate of the Affordable Care Act in the hands of an administration that doesn't care whether it lives or dies. Workers with employer-sponsored insurance may have thought themselves protected from the Trump administration's assault on the ACA, which was designed to address inequities in the individual health insurance market. But when vandals are on the loose, no one is safe.

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