Eliminating non-exchange programs in D.C.?

Witnesses debate D.C. small-group proposal
This is in the “boring-but-important” category.  There is a push to require all small group coverage in Washington D.C. to go through the SHOP exchange. – Reeve

By |May 14, 2013 | Lifehealthpro

Talk about the future of the private small-group health insurance market is heating up at the District of Columbia Council.

The council’s health committee recently held a 7-hour hearing
on the district’s Patient Protection and Affordable Care Act (PPACA)
exchange program manager, the District of Columbia Health Benefit
Exchange Authority.

The witness list included Dr. Mohammed Akhter, the exchange authority
board chairman, and member representatives from trade groups and
advocacy groups, including the District of Columbia Insurance
Federation, the District of Columbia Chamber of Commerce, Consumers
Union and AARP.

Yvette Alexander, the health committee chairperson, said she would
like to get exchange legislation considered by the council on an
emergency basis later this month.

The exchange board wants to be able to require insurers to sell all
non-grandfathered small-group coverage sold in the district through the
district’s Small Business Health Options Program (SHOP) program exchange
within a year after the exchange program starts up. Exchange
managers have said that, even if the transactions take place through
the exchange, agents and brokers could still help small groups buy the
coverage and collect commissions from the insurers that issue the
coverage.

Hearing witnesses supporting the exchange-only small-group approach
argued that the D.C. market is too small to support an exchange
small-group market and a non-exchange small-group market.

Stacy Pace, a lawyer who testified, said she supports the small-group
exchange proposals, because she thinks they’ll increase her ability to
take on full-time employees and offer health benefits.

Wayne McOwen, who spoke for the insurance federation, said insurers
want to see how the exchange works before the district makes a decision
about whether all small-group business should go through the exchange.

Julie Gallion, a human resources consultant for nonprofit
organizations, said she opposes the exchange-only approach, because she
believes that most of the groups she serves that have more than 20
employees already provide platinum-level benefits and may be getting
better coverage for lower prices than they could get through the
exchange.

“So much of the D.C. exchange is unknown,” Gallion said.

The D.C. council might be able to improve the exchange proposals if
it applies the “exchange only” rule only to employers with fewer than 20
employees, and if it provides a waiver program for employers that
already offer good health benefits, Gallion said.

Alexander expressed an interest in the idea of letting small
businesses over a certain size continue to buy coverage outside the
exchange system.

Some witnesses recommended that the district council consider
addressing concerns about “rate shock” by giving insurance regulators
more authority to control rate increases.