Business groups draw battle lines over Obamacare replacement

Thomas Donohue, president and chief executive officer of the U.S. Chamber of Commerce
Pete Marovich | Bloomberg | Getty Images

The battle over Obamacare is causing a rift not only on Capitol Hill, but within the business community as well.

Two influential lobbying groups are throwing their weight behind the American Health Care Act, the House Republican bill that would repeal and replace Obamacare.

The U.S. Chamber of Commerce this week sent an urgent letter to lawmakers pushing for passage. The chamber represents some of the nation's biggest companies and warned that it plans to track the vote and let its members know who opposed it.

Small businesses have also been vocal supporters. The National Federation of Independent Business called passing the legislation a "necessary first step." The NFIB has led the charge against President Barack Obama's health-care law, fighting the government all the way to the Supreme Court over its expansion of Medicaid and the provision requiring all Americans to carry insurance or pay a penalty.

The court upheld the law. But since President Donald Trump's election, NFIB said, the prospect of repealing Obamacare has sent small businesses optimism skyrocketing.

"The American Health Care Act would repeal the most punishing elements of Obamacare, including the massive tax increases and mandates that have increased costs, limited choices, and smothered job creation," the group said in a statement.

Businesses in opposition

On the other side are many companies in the health-care industry itself, which could be forced to shoulder more costs if federal funding for Medicaid is reduced. The American Hospital Association raised concerns about the millions of people who could lose coverage under the bill. The American Medical Association, which represents doctors, voiced similar objections. The Congressional Budget Office estimates that 24 million Americans would become uninsured over the next decade under the House plan.

"We physicians often see patients at their most vulnerable, from the first time they set eyes on a newborn child to the last time they squeeze a dying loved one's hand," the AMA said. "We don't want to see any of our patients, now insured, exposed to the financial and medical uncertainties that would come with losing that coverage."

One group of unlikely bedfellows has a specific complaint about the bill. The Alliance to Fight the 40 is a coalition of businesses and unions that have pushed for repealing the so-called Cadillac tax of 40 percent on the most generous employer health benefit plans. Members include health insurers such as Cigna and Blue Cross Blue Shield, large corporations such as CBS and Procter & Gamble and labor groups like the United Brotherhood of Carpenters and Joiners of America.

The alliance successfully lobbied to delay the effective date of the tax to 2020 under current law. The House bill would push that back to 2026 — a partial victory for the group. Still, the bill fully repeals other Obamacare taxes that pay for coverage provisions, making the Cadillac tax an even more important revenue source over time.

Correction: This story has been updated to reflect that Alliance to Fight the 40 objects to only the Cadillac tax portion of the GOP bill, and to reflect that America's Health Insurance Plans has not taken a formal position.