Controversy concerning implementation of the Affordable Care Act in D.C. could spread as quickly as a virulent flu outbreak in coming months.
Upheaval in local approval of Obamacare is the potential result of a little known development currently brewing behind the scenes within the city government bureaucracy.
Although a majority of Americans maintain that President Obama’s signature legislative achievement will make things worse for taxpayers, businesses, those currently insured and medical professionals, it is widely presumed that the law enjoys a relatively unique level of public support in D.C.
However, the District’s newly established Health Insurance Exchange Board may soon single-handedly undercut local support for the health care law if the seven appointed members vote to adopt recommendations proposed by the Mayor’s Health Reform Implementation Committee (HRIC).
The local mandate under consideration would affect all employees currently covered by District employers under group plans of 100 or fewer workers. It would also require that all individual plans and small group coverage be provided exclusively by the exchange.
The mayor’s panel has advised the board that the health insurance exchange “should be the sole marketplace in the District for the purchase of individual and small group health insurance plans” and recommends increasing the threshold for affected group plans from the standard of 50 employees to 100.
Following the U.S. Supreme Court decision to largely uphold the controversial federal law, D.C. small business advocates began sounding the alarm over these local proposals. The D.C. Chamber of Commerce and other business representatives, as well as human resource advisers, insurance coverage consultants and others argue that the proposed policy would severely restrict coverage choice and raise costs for small businesses.
The District’s small population and relatively low number of uninsured have created government concern regarding the financial viability of its insurance exchange. As a result, regulators contend program sustainability requires mandating an expansion of the risk pool by fiat.
However, that scenario dictates that more than 36 percent will be forced out of the private insurance market and into the city’s health care exchange. Workers employed in the District covered under affected group plans, individual plan holders and individuals required to purchase coverage would all be affected.
The HRIC “Report and Recommendations on the Health Insurance Market Structure of the District of Columbia” does not discuss the potential for blowback by consumers. It does, however, acknowledge that the recommended policy would increase the cost of applicable group plans.
Particularly troubling for local business advocates is curtailment of employer health plan choices – including high deductible plans, health savings account plans and other plans that employers currently offer – and reducing competition.
An unintended consequence would be the inevitable reduction or elimination of employer-provided health insurance benefits. Under the federal law, employers with fewer than 50 qualifying employees are not required to offer coverage. The District scheme to raise the exchange participation requirement from 50 to 100, if approved, would indirectly extend this benefit vulnerability to a larger number of workers, further destabilizing the small group market.
Employers currently offering coverage might reduce benefits or opt out at a net savings due to “rate shock” resulting from an additionally proscribed merging of the small group and individual markets within the D.C. exchange. In addition, employers with multiple state worksites might purchase coverage elsewhere, simplifying selection and application complexities.
These pending policies provide a perfect prescription for generating opposition – a government decree forcing a directed change in current health plan coverage while both restricting coverage options and increasing costs.
Creating an operational exchange next year in advance of the 2014 federal insurance requirement necessitates that the District’s appointed governing board must decide the overall marketplace structure by October.
If D.C., as a surrogate, reneges on President Obama’s frequent fundamental pledge that those with health care coverage would be able to “keep the insurance you currently have” under the federal law, significant political fallout may result.
A broken promise of this magnitude, even at the hands of local agency implementers, would likely shock many D.C. residents, business owners and those employed in the District into startled distrust and disapproval of the federal health care law.
Mark Lee is a local small business manager and long-time community business advocate. Reach him at OurBusinessMatters@gmail.com.