The District of Columbia public exchange can tax all health insurers in the district — including many that cannot sell products through the exchange — to pay for its operations, a federal judge says.
U.S. District Judge Beryl Howell came to that conclusion in a recent decision for the U.S. District Court for the District of Columbia.
The American Council of Life Insurers (ACLI) sued for a preliminary injunction that would keep the District of Columbia Health Benefit Exchange Authority board from imposing the tax.
The Patient Protection and Affordable Care Act (PPACA) requires exchanges to make themselves independent from federal funding starting Jan. 1, 2015. The D.C. exchange board wants to pay for the $29 million 2015 DC Health Link operating budget by imposing an assessment on as many carriers as possible. The assessment would affect any company licensed as a health insurer, even if the insurer sells only supplemental health products, such as dental insurance or disability insurance, not the kinds of major medical products that can be sold through the D.C. exchange.
Exchange managers say that a broad-based assessment can hold costs down, and that expanded access to major medical coverage should make the District of Columbia a bigger, better market for non-medical health products.