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The Employer Mandate Debate Doesn’t Matter. Here’s What Does.

House Republicans vote to delay the employer and individual mandate.

Senate Minority Leader Mitch McConnell (R-Ky.) declares that taking down Obamacare will be one of the party’s top issues in the next election.

It feels like a rerun because in some ways, it is.

The GOP has cast thirty-seven separate votes to repeal parts of the Affordable Care Act. (None has stuck.) And party leaders have twice pledged that they’ll run national campaigns against the health law. (Those results are more mixed, but many experts see President Obama’s re-election as vindication for his signature policy achievement.)

Perhaps this time it’ll be different. The White House’s decision to postpone the employer mandate by one year has opened a new front of criticism. And Republicans are being more surgical in their efforts to fight the ACA, pushing on ways to portray Democrats as friends of big business rather than try again for full repeal.

But for all the fuss, delaying the employer mandate by one year will have “virtually no impact on the law,” according to the Urban Institute. “From our analysis, the employer mandate is not a fundamental part of the law,” Urban’s Linda Blumberg told California Healthline.

So as a result, it’s yet another week when health reform headlines are dominated by political battles, and not a closer look at the policy behind them. It’s yet another week when relatively unimportant events in Washington, D.C., are overshadowing what’s happening on the ground.

And that’s too bad, because the employer-based health care system is continuing to undergo radical changes.

Here’s a look at three other elements of that system that have gone under-the-radar — and matter more than the mandate delay.

Employers Hustling To Get Ready for ACA

Mostly overlooked in the debate over delaying the employer mandate is that many employers still are struggling to figure out how to operate under the health law and are lobbying Congress to make continued changes.

Businesses are specifically fighting on the definition of a “full-time equivalent” — arguing that lawmakers should adopt the more common benchmark of a 40-hour workweek, rather than the current 30-hour benchmark, Paige Winfield Cunningham reports for Politico.

A number of employers also will need to get smarter at tracking who actually qualifies for benefits, Alan Cohen tells the New York Times. According to Cohen — chief strategy officer for Liazon, which runs a private benefits exchange — many businesses don’t track employees by hours worked, which complicates efforts to comply with the law.

Cohen cites the example of a home health provider that pays nurses per visit; the firm “not only has to provide health insurance,” he tells the Times‘ Robb Mandlebaum, “but it also has to buy new systems to track hours.”

‘Employment Lock’ May Be Coming to an End

Meanwhile, a new paper explores the phenomenon of “employment lock” — where workers stay in jobs they don’t like because of the health benefits — and concludes that given the new security of coverage expansion under the ACA, as many as 940,000 Americans will leave their jobs.

To make their prediction, the authors reviewed Tennessee’s Medicaid program, and what state residents did to obtain coverage when the program had to cut back in 2005. And many of the 170,000 childless adults who lost coverage were spurred to job hunt aggressively — the employment level among this cohort rose by 5.7% — and private insurance subsequently surged, too.

The researchers extrapolated that the opposite could happen when Obamacare’s coverage expansion begin to kick in next year; specifically, that workers would not feel compelled to remain in jobs they didn’t like solely for their health insurance. Which means that under the ACA, “you can pick the employer that’s best for you,” according to Northwestern’s Craig Garthwaite, one of the study’s authors, “without having to consider the benefits they offer.”

Large Firms Increasingly Chase Savings, New Care Models

But even if job lock loosens, the employer-based health system isn’t imperiled; the majority of Americans are still going to be obtaining coverage through their workplace next year, and probably for a few more years to come after that. And that means employers continue to push for new ways to reduce their health spend.

One of the more interesting pilots is in New Mexico, Melanie Evans writes for Modern Healthcare — a deal between a local health system and Intel Corp. The technology company has much less size and scale than Wal-Mart, but it’s following a similar strategy by partnering with Presbyterian Healthcare on a new narrow-network arrangement.

While the model is confined to New Mexico — as opposed to Wal-Mart’s national effort — Intel’s approach is somewhat more expansive than Wal-Mart’s service-line specific direct contracting. Rather than go through a national insurance plan, about 5,400 Intel workers will be able to access a narrow network of Presbyterian providers as two of its four health plans; enrollees in the narrow-network plans will pay more if they seek treatment elsewhere.

In theory, the approach will lead to better coordinated care, by keeping Intel employees within an accountable care style organization, and ultimately cut the technology firm’s health costs; one Intel benefits manager says the model will help improve care, too. And if it’s successful, it’ll be yet another indicator that the traditional model of contracting through a national insurance plan is outdated.

While only 7% of large employers surveyed by the National Business Group on Health said that they have direct contracts in place, another 6% plan to pursue the model next year.

“There’s more interest” in direct contracting “than actual action,” the NGBH’s Helen Darling told Evans. But that interest is “intense.”

Around the nation

Here’s a quick look at what else is making health reform news this week.

Privacy fears around data: At Bloomberg, Alex Wayne takes readers inside ‘the Hub,’ the new federal computer system that links seven federal agencies and will help determine if Americans can buy health coverage and qualify for subsidies. But with great computing power, comes great responsibility — some fear that the Hub’s centralized tracking will give rise to new data security concerns.

The future of health spending: Writing at Health Affairs, RAND’s Arthur Kellerman says that health reform is one of four key forces — the other three are information asymmetry, cost-sharing and innovation — that are moving to reshape the national health care landscape.

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