Congress Has Already Started to Repeal ObamaCare Expanding a provision in one of the last laws Obama signed could help undo his signature initiative. By John C. Goodman

Posted By on January 24th, 2017

http://www.wsj.com/articles/congress-has-already-started-to-repeal-obamacare-1485215951

The provision was buried deep in a 1,000-page bill that Congress passed in December by large bipartisan majorities. Most lawmakers probably didn’t know it was there. Yet it is the start of an answer to the biggest question on Washington’s mind: What to do about ObamaCare?

The 21st Century Cures Act, which President Obama signed Dec. 13, focuses mainly on helping patients obtain breakthrough drugs and medical devices. But it also includes provisions that will give small employers—those with fewer than 50 workers—more flexibility in the insurance marketplace. As Republicans debate how to replace ObamaCare, giving that same flexibility to all employers would be a perfect place to start.

One reason that most Americans get health insurance through work is that there are tax advantages for doing so: Employers can pay for the insurance with pretax dollars. If companies wanted to simply give their workers cash, and let the employees choose their own insurance, that money would be taxed by Uncle Sam.

 The problem is that this system ties the worker’s insurance to his job. If he quits, he loses coverage. Polls have consistently shown that what employees most want in health insurance is portability. They want to own their policy and take it from job to job.

Many companies would like to accommodate this by giving employees a “defined contribution”—a fixed amount of money—and letting them choose their own health insurance. Thanks to the 21st Century Cures Act, small employers now can do this. They can put pretax dollars into accounts called Health Reimbursement Arrangements, or HRAs. Workers can then use that money to buy their own health coverage.

This represents an abrupt reversal of policy. Since 2015 the Obama administration has been threatening to punish any employer who used HRA accounts in this way with a fine as high as $100 per employee per day.

Small companies were already exempt from ObamaCare’s employer mandate, but this has taken on increased importance. They are now the only employers that can choose how health insurance will be subsidized by the federal government. They can (1) use pretax dollars to provide health insurance directly; (2) pay higher taxable wages and allow the employees to buy their own insurance, benefiting from the ObamaCare tax credits if they quality; or (3) put pretax dollars into an HRA. Extending this freedom to all employers would be a remarkably effective solution to ObamaCare’s many problems.

One reason so little progress has been made in increasing employer-based coverage is that larger companies are meeting the law’s minimum requirements by offering low-wage workers bronze ObamaCare plans. But these plans might have deductibles of $6,000 or more and premiums equal to 9.5% of the employee’s wage. Workers routinely reject this kind of coverage.

What if these firms were given the same choice that small businesses have? What if they could put money into an HRA for each employee, which the worker could then use to purchase coverage on his own, with the help of tax credits? CONTINUE AT SITE

 

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