CEOs in Holding Pattern as They Wait on the House Healthcare Bill

President Trump speaks after healthcare legislation passed the House.

The House’s approval of President Trump’s American Health Care Act is obviously just the first stage of what promises to be a compelling, unpredictable and important drama over coming weeks and months.

Many CEOs see some significant things they like in the bill, features they hope will make it to the end of the legislative gauntlet. But others are troubled by the many unanswered questions left by the bill—and by some of what’s clearly intended by the bill, such as stripping coverage from some very vulnerable constituencies who have been covered under President Obama’s Affordable Care Act.

The early confusion around a bill that few understand or have even read is reminiscent of concerns that Republicans had about Obamacare during its passage in 2010, after then-House Speaker Nancy Pelosi said that “we have to pass the bill so that you can find out what is in it.”

“As a CEO, I’m not paying much attention to this vote,” said David Lewis, president and CEO of OperationsInc., a Norwalk, Conn.-based human-resources outsourcing and consulting firm. “It’s purely political theater versus saying something of substance.

“Members of the House who voted for this have admitted they did not read the entire bill and in many cases did not like many parts of it. With that said, they were fine voting for this, given that it really means nothing. The ‘real’ vote comes when the version the Senate passes makes its way back to the House, and that’s assuming the Senate can pull that off. Planning anything on the basis of this vote or design of the new [bill] is foolhardy.”

“The ‘real’ vote comes when the version the Senate passes makes its way back to the House,  assuming the Senate can pull that off. Planning anything on the basis of this vote or design of the new [bill] is foolhardy.”

Still other CEOs believe that it’s just too soon to pay much attention to what’s happening at the moment with health-care reform, largely because so much is yet to be decided. There is a vexing lack of detail and the suspicion by some that the Republicans in charge of Washington, D.C., are attempting to make short shrift of their promise to overhaul healthcare coverage in large part so that it clears their agenda for launching into tax cuts and maybe tax reform.

Basically, the House version of the bill would free employers from a number of taxes and requirements of Obamacare. Most notably replaced is a requirement that larger companies offer health insurance to their companies or pay a penalty.

Also, coverage for those with pre-existing medical conditions could become more expensive in some states. This coverage is a linchpin of Obamacare and a political lightning rod. So while still barring insurers from denying coverage to people with health problems, Trump’s bill would allow insurers to charge these people higher premiums for about a year if they have a gap in coverage, if they live in states that obtain federal waivers. In essence, then, the Republican bill raises as many questions as it answers in regard to pre-existing conditions.

If the House version of the bill remains recognizable and is signed into law, believes Alejandro Badia, CEO of OrthoNOW, a franchisor of orthopedic urgent-care centers, it still would do “very little to impact the cost of healthcare or access to healthcare, which is what it was intended for. It does absolutely nothing to make the system more efficient and to expand the safety net for those less fortunate.”

In another significant change, the bill delays a tax on high-cost employer health plans until 2026. “I don’t have to give my employees healthcare anymore,” Jameson Tyler Drew, president of Anubis Properties, a residential investment company in Los Angeles, Calif., told Chief Executive.

“I could potentially save $250,000 at the expense of higher employee turnover … I would think many [of my employees] would walk if I got rid of my healthcare plan. But that is not the end of my business. In my days before we had an employee health-care plan, we just dealt with higher turnover.”

In fact, Drew tied his support of the gist of Trump’s plan in part to his expectation that the president will keep his major pledge to lower overall business taxes. If rapidly rising health-care premiums aren’t stanched by the House plan or something like it, Drew said, the skyrocketing cost “pretty much negates the benefits” of any tax cut for his company.

Daniel Gold, CEO of Future Energy Solutions, a Ft. Lauderdale, Fla.-based company that provides energy-efficient lighting systems and maintenance, said that the end of the insurance requirement would be “very significant” for many companies. While his company happily provides 100-percent coverage of health-care premiums for employees, Gold believes that while “a lot of companies claim their employees are vital to their success, it’s essentially lip service … I foresee a future in which they can’t offer health insurance and wind up losing their best employees to companies that can.”

But Badia still sees the new bill as “a positive. One of the disasters of healthcare is the expectation by the patient that their employer ‘will take care of them.’ [So] there is little incentive by the insured to use healthcare wisely or research options. A free market system will reward quality and efficiency, and this will drive down costs in healthcare as it does in all other business sectors.”

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Dale Buss
Dale Buss is a long-time contributor to Chief Executive, Forbes, The Wall Street Journal and other top-flight business publications. He lives in Michigan.

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