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Life Health > Health Insurance > Health Insurance

Self-Insured Firms Fear Reform Plan

By Arthur D. Postal

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Provisions in health care reform legislation unveiled earlier this week would be harmful to the employment-based health care system, the Self-Insurance Institute of America Inc. says.

SIIA, Washington, also argues that the legislation does not provide enough incentives to self-insured plans. These groups are non-profit entities established solely to provide an employee benefit, it notes, while health care vendors that would provide services to the health care exchanges proposed in the bill would be more costly.

The SIIA will seek major changes in the America’s Health Future Act when the Senate Finance Committee starts to mark up the bill Tuesday, said Michael Ferguson, SIIA chief operating officer, and Cliff Roberti, its head lobbyist.

The legislation was introduced Wednesday by Sen. Max Baucus, D-Mont., chairman of the committee.

The bill would create a marketplace, or exchange, where consumers would be able to compare and shop for insurance plans that meet new government specifications.

The bill would start by mandating that businesses with up to 50 employees be allowed to buy into the exchanges. If states wish to do so, they could expand that provision to businesses with 100 employees.

Also under the bill, the health insurance exchanges would be open to all businesses of all sizes by 2022. Analysts say these provisions goes farther in creating an independent marketplace than any of the 4 other bills dealing with the health care reform issue introduced by Democrats so far this year.

In a letter to Baucus sent Thursday, Ferguson and Roberti of the SIIA voiced concern the bill would not prevent employees who are members of self-insured groups from seeking alternative insurance from the exchanges. The SIIA also takes issues with opening the exchanges to employers of all sizes and a proposal to provide subsidies only to plans associated with the exchanges, they said.

Moreover, because self-insured, employer-sponsored health plans have access to important claims data, they have the ability to analyze and predict medical and cost trends, and therefore reduce their costs of coverage, Ferguson and Roberti contended.

“Employers who opt to purchase coverage through the exchange would no longer have access to this quality information and would not be able to target benefits that result in savings and cost-efficiencies,” they said in their letter to Baucus.

“Essentially the data would be handed over to insurance companies that have no incentive to cut costs,” they said.

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