by Alan Panebaker vtdigger.orgThe Shumlin administration’s proposed health insurance exchange is being criticized by both ends of the political spectrum.
Single-payer advocates worry the governor’s proposal will reduce the availability of federal tax credits for individuals and leave more people with inferior health insurance through high-deductible ‘bronze’ plans.
Businesses say all companies should be allowed to opt out of the state’s health insurance exchange.
Shawn Shouldice, director of the National Federation of Independent Businesses, said it’s unfair for the state to exempt large businesses while requiring smaller ones to buy insurance in the exchange.
Companies with 51 to 100 employees are getting an exemption from a state mandate to participate in the exchange, while businesses with 50 or fewer are required to buy health insurance on the exchange starting in 2014.
The organization issued a press release Wednesday questioning the proposal to exempt larger businesses but not smaller ones.
‘Big businesses are obviously doubtful and that’s why they want an exemption,’ Shouldice wrote in the release. ‘NFIB/VT members have the same concerns and this carve-out really looks like favoritism.’
A provision of the federal Affordable Care Act, explicitly states that it does not prohibit insurance markets outside the exchange.
Critics of the proposal to require small employers and individuals to purchase insurance in the exchange have questioned why the state went above and beyond the federal requirements.
Under the federal health care reform law, states must have an exchange up and running by 2014 or the feds will do it for them. The exchange is a regulated, virtual marketplace for health insurance, kind of like Travelocity, but for health insurance.
The federal law requires states to allow individuals and businesses with up to 50 employees to purchase insurance that meets minimum state and federal criteria. For 2014 and 2015, states can choose to allow businesses with up to 100 employees in the exchange. Starting in 2016, these businesses must be allowed in.
Under pending legislation, the state would require individuals and those smaller employers to purchase health insurance inside the exchange.
Until Monday, the state proposal was to require those employers with 100 or fewer employees to buy insurance in the exchange. In a press conference, the governor announced a revamped plan to limit those required inside the exchange to the smaller businesses (under 50 employees) and to allow ‘bronze’ plans ‘ essentially the cheapest plans allowed under federal law, in the exchange.
According to a report produced by the Shumlin administration, limiting the sale of insurance to exchange products will promote health care reform. The more people buy insurance from one source, in theory, the more the exchange can be used as a platform for a single-payer or other universal health care system.
But single-payer advocates worry that the exchange will do more harm than good.
John Franco, a Burlington attorney and longtime proponent of a universal health care system, said the new proposal creates an uneven playing field because it forces individuals and smaller businesses to pay for the overhead costs of the exchange.
‘They have to go to the exchange and foot the administrative overhead that other people don’t have to foot,’ he said. ‘One of the fundamental principals of single-payer is it’s a level playing field. This really loses sight of what the objective of this is.’
Herding the businesses with 50 or fewer employees into the exchange, he said, does not further the administration’s goal of moving toward a waiver in 2017 that will allow the state to implement its own universal health care system.
The only reason to fool with the exchange, Franco said, is to get refundable tax credits for individuals. Individuals who make less than 400 percent of the federal poverty level could be eligible for these federal credits. The amount of tax credits the state receives before 2017 sets the bar for a federal grant it would receive in 2017.
Allowing the high-deductible ‘bronze’ plans that some businesses have lobbied for may not help the goal of garnering more tax credits since those credits are available only to individuals enrolled in a richer ‘silver’ plan, Franco said.
What the state should be doing, Franco said, is maximizing the federal tax credits through voluntary incentives.
Including the less comprehensive plans and forcing individuals to purchase insurance through the exchange is not the answer, he said.
vtdigger.org 2.9.2012
Vermont’s exchange proposal criticized by conservative business group, advocates for single payer
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