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Evan Horowitz | Quick Study

Are you ignoring the GOP health plan because you’re covered at work? You shouldn’t.

President Trump spoke about health care at the White House on Monday.
President Trump spoke about health care at the White House on Monday.(Stephen Crowley/New York Times)

It’s not just the poor who stand to lose coverage under the Republicans’ new health care plan. Millions of higher-income Americans who get insurance through their employers would also join the ranks of the uninsured.

On Monday, the nonpartisan Congressional Budget Office released a scorching analysis suggesting that under the GOP plan — dubbed the American Health Care Act — 24 million people would become uninsured over the next decade.

Deep cuts to Medicaid account for the bulk of the newly uninsured. Beyond that, reduced government subsidies and lower penalties for forgoing insurance also play a role, the CBO said.

But what about workers who already have coverage?

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Over half of all US firms currently offer some kind of health benefit, according to a 2016 report by the Kaiser Family Foundation, and together those firms help provide coverage for the majority of Americans under 65, more than 150 million people.

Under the House GOP legislation, this pillar of the American social contract will get a bit weaker.

According to the CBO, 7 million people would cease to get insurance through their employers and fail to pick up an alternative.

This drop-off in employer coverage is substantial, accounting for over a quarter of the total increase in the number of uninsured forecast by the CBO.

Now, it’s important to be careful about terms here. Not all of these people are “losing” coverage. Some workers will actually choose not to purchase insurance through their employer.

And why not? The penalties for skipping out are pretty low in the Republican plan, particularly if you stay uninsured for several years. So for the young and healthy, turning down company insurance will suddenly seem like a decent financial deal.

However, that’s just part of the story. The CBO also predicts that many employers will cut back on their offerings, not least because the AHCA would eliminate a key penalty for doing so. That will force more workers to purchase individual plans on their own. And for older workers this poses a serious problem, since premiums for those age 50 to 64 are expected to rise dramatically.

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Even companies that continue to offer employer-sponsored plans are liable to make those plans less generous. That’s already been happening, with workers shouldering an ever-increasing share of the cost. But AHCA gives companies new incentives to provide bare-bones, high-deductible offerings, paired with health savings accounts. So the trend toward slim insurance could easily accelerate.

To be sure, it’s still true that low-income Americans face the stiffest risks under the Republican plan, what with the cuts to Medicaid and the end of means-tested benefits. But those with good jobs are hardly insulated.


Evan Horowitz digs through data to find information that illuminates the policy issues facing Massachusetts and the US. He can be reached at evan.horowitz@globe.com. Follow him on Twitter @GlobeHorowitz.