Hillary Clinton's ACA Reform Proposals Could Increase Employer Health Care Costs

September 25, 2015

This week, presidential candidate Hillary Clinton announced several new health care reform proposals that would "build on the progress" made by the Affordable Care Act without saying what she would do with the law's excise tax on high-value employer plans, as Sen. Bernie Sanders (I-VT) and eight Democratic senators introduced a bill to repeal that tax.  Focusing on the public's two biggest health care concerns, high drug costs and increasing deductibles, Secretary Clinton called for:

  • Requiring employers and insurers to provide up to three doctor visits per year without needing to meet a plan's deductible first;
  • Capping out-of-pocket drug costs at $250 monthly for employees with chronic and serious illnesses;
  • Expanding disclosure requirements and cost-sharing protections to ensure employees have only in-network cost-sharing for any hospital care and for any emergency services in a true emergency; and
  • Allowing Medicare to negotiate drug prices which could increase cost-shifting to private-sector payers.
Our initial analysis of the proposal for providing three doctor visits indicates it would likely increase employer health care costs by $5.2 billion per year just for nonelderly adults.  Secretary Clinton also called for reducing health care costs by building on delivery system reforms that reward value and quality, and for leveraging private efforts and resources to encourage entrepreneurship that improves health.  Although Secretary Clinton told the American Federation of Teachers earlier this summer that she was weighing a repeal of the Cadillac tax "as currently structured," she has not yet publicly called for its outright repeal.  According to Secretary Clinton, a "big hurdle" to do something about the tax is finding an alternative source of tax revenue if it is repealed.  The excise tax repeal bill co-sponsored by Sen. Sanders (S. 2075) calls for a plan to offset lost revenue without increasing the federal deficit, an issue the other bills that have been introduced do not address.  According to Sen. Sanders, "Some have said that this tax only falls on 'Cadillac' health care plans, but the reality is that the plans this bill will tax are more like Chevrolets.  Workers have fought hard to negotiate decent healthcare benefits, often in exchange for lower pay.  This excise tax unfairly punishes them. It has got to be replaced."