House lawmakers have approved an amendment to the president’s health care law intended to make the looming changes an easier pill to swallow for small businesses and their employees. However, like so many other proposed changes to the statute, some say the bill threatens to pull the legs out from under the law.
Known as the “keep your plan” bill, the proposal would allow insurers to continue selling for five years group plans that fall short of the standards set by the Affordable Care Act, so long as the plans were offered prior to 2013. That would essentially extend the Obama administration’s current transition policy, which allows individuals and small employers already enrolled in non-compliant plans to keep them, but only through 2016.
More importantly, the bill would allow groups that aren’t already enrolled in one of those plans to purchase them (the administration’s policy only permits continuing coverage for those already enrolled in non-compliant plans). So, under the House proposal, small businesses that weren’t already covered by the type of plans ruled out under the health care law would now be eligible to buy them going forward.
The House on Thursday voted 247-167 in favor of the bill, with 25 Democrats breaking with Republicans to push the proposal through. But like most previous efforts to overhaul parts of the law, the bill will likely be cast aside in the Democrat-controlled Senate.
Rep. Bill Cassidy (R-La.), who introduced the legislation a year ago, said in a statement this week that the bill would “allow American families to save money, to have access to affordable health care choices and will raise wages for workers.” He has pitched the measure as a way to mend what he calls the president’s “broken promise” that Americans who liked their insurance plan could keep it under the health care law.
House Small Business Committee Chairman Sam Graves (R-Mo.) added in an e-mail just before the floor vote that the bill “is desperately needed because it gives small businesses and their workers the option to keep or choose the health plan they want.” He noted that millions of individuals have already had plans cancelled, and without further action, “many employees of small businesses are likely to get those notices this fall.”
An analysis by the Congressional Budget Office estimates that the bill would also reduce the national deficit by $1.25 billion. Over the next two years, the office predicts that at least 2 million workers would sign up for plans made possible by the bill, which would be less robust and thus less expensive than those that meet all the law’s coverage requirements. That number would be expected to grow in subsequent years through 2019.
Many of the enrollees would likely be young, healthy individuals in search of cheaper coverage, and nearly all of them would be small businesses employees, as large employers tend to self-insure their workers and thus do not buy plans through the group market.
A fact sheet released by the House Energy and Commerce Committee, which moved the bill forward in July, suggested that the bill would give small businesses “access to more affordable options that can better meet their needs than what is available today and more affordable coverage than what is available today under the president’s health care law.”
But while that may be true for small firms interested in less robust health plans, it may not be the case for those seeking more comprehensive coverage. That’s because, without those relatively young and healthy workers signing up for more robust plans, the cost of covering the individuals with those plans will rise, prompting insurers to hike the rates for ACA-compliant health insurance.
“The Cassidy bill would likely have serious adverse effects both on premiums in the small group market — causing them to rise substantially for many small firms, and on health reform’s consumer protections,” Edwin Park, vice president for health policy at the Center on Budget and Policy Priorities, a Washington-based think tank, wrote in an analysis of the bill published Tuesday.
Among those protections, he explains, are rules preventing insurance companies from charging significantly higher premiums to small businesses with older, less healthy workforces and from imposing waiting periods on employees with pre-existing conditions.
Park added that the measure would prevent insurers from selling skimpy plans on the government’s new online health insurance marketplaces for small businesses, often called SHOP exchanges. Consequently, the exchanges, which have already been slow to gain traction, may have less appeal for budget-minded businesses.
If approved, he argues, the bill “could make it virtually impossible for [the small business exchanges] to attract the sizable enrollment and balanced mix of employers with healthy and less healthy workers that will be necessary for these marketplaces to have financial stability over time.”
In a statement released Wednesday theatening a veto, the White House similarly argued that “with health care costs rising at low rates and choices for small businesses improving through the Health Insurance Marketplaces, this bill would be a major step back.”