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Health Law Insurance Change Gains Bipartisan Following

By Melissa Attias, CQ Roll Call

September 9, 2015 -- House Energy and Commerce members signaled interest Wednesday in a bipartisan plan that would amend the Affordable Care Act to keep employers with 51 to 100 workers from having to comply with more stringent insurance coverage requirements.

The bill (HR 1624), with 40 Democrats among its 215 cosponsors, drew a warmer response from Energy and Commerce Health Subcommittee Democrats than past efforts targeting the 2010 overhaul. Frank Pallone Jr. of New Jersey, the ranking member of the full committee, called the hearing a "turning point" in the debate, though he added the legislation could be premature.

"As opposed to using the ACA as a political football through repeated, futile attempts to repeal or defund the law, Republicans and Democrats have come together in a bipartisan fashion to improve and strengthen the ACA," Pallone said, referring to the law, known as the Affordable Care Act. "I'm hopeful this spirit can continue."

Under the law, businesses with 51 to 100 workers are categorized as small employers. State regulators, however, have the option of designating them as large employers until 2016, meaning they can offer health coverage through the large group market that does not have to cover specified benefits and meet other requirements that apply to smaller groups.

To prevent midsized employers from being forced to change coverage and possibly absorb premium increases, the bill would automatically place businesses with 51 to 100 workers into the large employer category, while still allowing states to treat them as small employers if they choose. Monica Lindeen, president of the National Association of Insurance Commissioners, said her group endorsed the bill because it would allow states to continue to have control over the small-group market and ensure stability.

Although the effects would vary by state, Lindeen warned of premium increases and reduced flexibility to tailor benefits for the firms in question if the legislation is not passed. Employers with younger and healthier workers could self-insure to avoid fallout from the change.

Kurt Giesa, a partner at the management consultant Oliver Wyman, said his analysis found that 64 percent of midsized employers would see their premiums rise in 2016, with an average boost of 18 percent. After firms with younger, healthier workers leave the market, he estimated that premiums for small businesses in the new combined market could go up 3 to 5 percent.

But Washington State Insurance Commissioner Mike Kreidler testified against the legislation, saying insurers are counting on an expanded risk pool to keep requested premium decreases. Making the change "so late in the game will be very disruptive to the market in the state of Washington," he said.

Kreidler also noted that employees would not have access to the guaranteed benefits under the health care law and suggested that lawmakers could postpone the change rather than remove the requirement. "The jump is a good one for health care reform and for the small group market," he said.

North Carolina Republican Renee Ellmers questioned why Kreidler opposed the measure when a state could opt out of the definition change. But Kreidler said Washington state law sets its coverage limit at 50 employees, meaning he would have to gain legislative approval—the odds of which he put at "zero to none" given the link to the health law.

Lindeen noted that the Obama administration has offered a transition policy that could allow relief for mid-sized employers in participating states until October 2017, but she said her group thinks the legislation is necessary to preserve coverage options and for future stability. She also dismissed the notion that consumers would have fewer protections under the bill and said that the requirement for plans to offer certain benefits wasn't needed for the large-group market.

"It's important not to deny the small businesses that are currently utilizing a product that works for them to be able to continue to do that," Lindeen said.

Jennifer Sherman, spokeswoman for bill sponsor Brett Guthrie, R-Ky., said a preliminary estimate from the Congressional Budget Office found that the legislation would save $400 million over a decade. That should insulate the measure from the offset concerns that dogged other efforts to change that health law that garnered bipartisan support.

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