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Witnesses debate D.C. small-group proposal

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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.

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