Business leaders and D.C. Council members on Thursday criticized a proposal to eliminate the current private insurance market for many local buyers.

That proposal would require individuals who purchase their own health insurance and local small businesses to obtain health insurance exclusively through a new government-regulated marketplace.

"I'm concerned that small businesses would be adversely affected by such a mandate," said Yvette Alexander, chairwoman of the Council's Committee on Health.

- Eric P. Newcomer

Tech troubles?
D.C. Councilman David Catania stopped by Thursday's hearing to deliver a stern message: Ensure that the District's technological infrastructure for the health exchange was on schedule -- or he would shut it down.
He asked Mila Kofman, executive director of the District's Health Benefit Exchange Authority Executive Board, whether a performance bond -- which would give the city some protection if the independent contractor working on part of the website for the exchange failed to come in on time -- had been formulated.
"I will have no hesitation to stop this program in its tracks without it," said Catania, who suggested the council could vote to withhold funding for the contract.
Said Kofman: "As of today, that has not been executed."

The District of Columbia Health Benefit Exchange Authority Executive Board, which is overseeing much of the District's effort to comply with President Obama's Patient Protection and Affordable Care Act, decided in October that the city should buck the national trend and merge the existing marketplace into the new exchange for individual purchasers and small businesses.

Many other states are simply adding a government-regulated health exchange and keeping the existing insurance marketplace intact.

Regardless of the marketplace in which a health insurance plan is offered, it would still need to meet requirements established by the new national health care law, including the provision that it does not bar individuals with pre-existing conditions.

During a five-hour hearing Thursday, all four council members present indicated that they were reluctant to eliminate the current marketplace for health insurance when the new government-run exchange is scheduled to take effect in January 2014.

If the District moves to eliminate the current marketplace, insurance lobbyist Kevin Wrege said at the hearing, "I don't believe you're going to have the robust range of choices."

He warned that as the new health care law begins to take effect, there would already be a significant disruption to the health insurance market.

Supporters of a single marketplace argue that for the government-regulated exchange to thrive, it would need to be populated with a large number of participants, which might not be feasible if many residents are allowed to stick with the private marketplace. D.C. in particular, with a population smaller than nearly every state, needs a pool of healthy participants to keep costs manageable.

The executive director for the health exchange board indicated a willingness to compromise and consider how the District transitions into the new exchange, saying that a "thoughtful transition period" will be reflected in the proposal it presents to the D.C. Council.