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Monday, June 26, 2023

Last week, the United States House of Representatives passed H.R. 3799, the CHOICE Arrangement Act, aiming to codify a discriminatory Trump Administration rule that created Individual Coverage Health Reimbursement Arrangements – or ICHRAs. The ICHRA system incentivizes businesses to divide their workforce into classes, with some getting the employee-sponsored benefits they earned while others are offered meager vouchers and left on their own to find coverage. The system enables discrimination in the workplace and serves as yet another partisan attack on the Affordable Care Act (ACA) by allowing employers to offload the costliest “classes” or workers into the exchanges, driving up costs for everyone who needs ACA coverage.

More than two years ago, President Biden promised to review the fundamentally flawed policy through Executive Order 14009, but has yet to take action. Republicans, meanwhile, are acting. 

The House-passed bill would codify the Trump rule into law. During floor debate, Democrats sounded the alarm of the imminent threat that the ICHRA system poses to many workers’ healthcare coverage.

“Exposing more people to financial ruin is exactly what this kind of legislative approach will achieve,” said Rep. Lloyd Doggett (D-TX). “There is even more ick to the ICHRA bill that is being introduced, and that is the opportunity that is created for class discrimination. This bill legalizes that discrimination.”

Rather than fostering an equitable healthcare system, ICHRAs could force those with chronic conditions to find their own coverage in the individual marketplace, exacerbating existing healthcare disparities.

“There are so many families overwhelmed by medical debt,” Doggett went on to say, “and some who will be denied the opportunity to get the protection they need from their healthcare providers because they simply cannot afford it.”

The system leaves some workers on the hook for rising healthcare costs. Rep. Bobby Scott (D-VA) highlighted, “the problem with this bill is it enables one company to find loopholes to get a good deal for that company even if it results in higher costs for everybody else.”

ICHRAs also destabilize the ACA marketplace exchange by segmenting insurance risk pools. Employers will typically “cherry-pick low-risk, young individuals for a pool separate from the ACA marketplace,” as Rep. Teresa Leger Fernández (D-NM) noted. 

Offering younger and healthier workers employee-sponsored benefits, and skimpy vouchers to workers with chronic conditions, is not what health equity looks like. Providing low-wage and sickly workers a voucher to fend for themselves on the ACA exchange, when many would be eligible for more comprehensive and affordable plans under the ACA, is simply bad policy. Failing to rescind this system would undermine the administrations' goal of advancing equity. 

The administration can still follow through and rescind ICHRAs before it's too late. Now is the time to reverse a policy “with more holes than a safety net,” stated Rep. Doggett.

To learn more about KUC and its partners’ work to educate policymakers on ICHRAs, STLDI, and the social determinants of health, visit KeepUSCovered.org or follow the campaign on Twitter and Facebook.