How the GOP's Health-Care Bill Would Affect People Insured Through Work

Fewer people would sign up for employer-sponsored plans, and fewer employers would offer coverage.

J. Scott Applewhite / AP

Much of the focus around the Obamacare repeal debate has centered on what would happen to people who buy insurance on their own, but about half of Americans are insured through their jobs—a situation that has shielded them from many of the concerns around Obamacare and its repeal.

But by 2020, about 2 million fewer people would get insurance through work if the GOP’s proposed Obamacare replacement bill, the American Health Care Act, passes, according to a scorecard report released today by the Congressional Budget Office, a nonpartisan agency that tracks the financial impact of legislation.

The CBO projects this will happen because the AHCA would repeal Obamacare’s individual mandate, so some people might not sign up for their employer’s health plan, with no threat of being fined later. But also, the GOP bill might induce more employers to stop offering health insurance.

That’s because the bill would also repeal the employer mandate, which requires businesses above a certain size to offer health coverage to their workers.  The AHCA would also offer tax credits to buy insurance to people making up to $75,000 a year, so more upper-middle-class workers could shop for insurance for themselves than under the current system, in which the cutoff for subsidies is around $48,000.

The CBO projects that employers would decide to drop coverage gradually, and that those who would opt to do so would have younger, higher-income workforces.

There is one thing serving as a check on businesses dropping coverage, though. Businesses are legally obligated to cover their rank-and-file employees if they want to insure their executives, and not offering health insurance would make it harder to recruit people at the managerial level and above, according to Rob Shapiro, a former U.S. Under Secretary of Commerce and cofounder of Sonecon, an economic and security advisory firm.

If businesses did stop offering coverage, the plans that people found on the individual market might not be as cushy as the ones they were offered through their jobs. The AHCA’s tax credits are considered to be less generous than Obamacare’s for most people, and the available individual-market plans would be skimpier.

The CBO also projected that in 2018 and 2019, average premiums for single people buying insurance on their own would be 15 percent to 20 percent higher than they are now. By 2026, the agency projects, premiums would be 10 percent lower than they are now—but that’s in part because plans under the new law would cover a smaller percentage of people’s health-care costs.