Congress has less than a month to make a small fix to Obamacare that could have a big impact on small businesses.
A bill that has been introduced would enable a state to decide whether to expand the definition of a small group health insurance market. It may not seem like a big deal, but lawmakers say the slight change could have a big impact on premiums for more than 3 million employees.
Any change needs to be put in place by the end of the month as many companies are finalizing their insurance rates for next year.
A small business with up to 50 employees looks for insurance in the small group market. Obamacare changed the definition of a small group market to include employers with 51-100 workers starting in 2016.
Opponents of the change say it would impose new requirements on mid-size businesses.
For instance, those businesses would face additional benefit requirements and new cost-sharing mandates. That could increase out-of-pocket spending, according to Monica Lindeen, Montana insurance commissioner who was representing the National Association of Insurance Commissioners.
Lindeen spoke before a Wednesday hearing of the House Energy and Commerce Committee’s health subcommittee.
An analysis from the actuary firm Oliver Wyman found that 64 percent of members in mid-sized insurance groups would see an average 18 percent premium increase next year due to the switch.
“We expect that many of the groups receiving such sizable increases would elect to drop their health insurance coverage and either self-fund or not offer any coverage at all,” said Kurt Giesa, a partner with the firm.
That means younger people would leave the pools and insurers would raise rates to cover the cost of the remaining, sicker groups, Giesa said.
The impact of the change would vary by state. Some states appear to have a good handle on small business markets.
Mike Kreidler, Washington state’s insurance commissioner, told the panel that of the 12 small-group insurers in the state, only one asked for a rate increase.
“Increasing competition, lower rates and growing enrollment are signs that market reforms can work,” Kreidler told lawmakers.
Normally lawmakers retreat to partisan camps when it comes to Obamacare, especially if it is any fix to the law. But this provision may be different.
The legislation has a Democratic co-sponsor in Rep. Tony Cardenas, D-Calif.
Other Democrats on the panel were still hesitant.
The top Democrat on the full committee, Rep. Frank Pallone, D-N.J., asked for a delay of the definition change for a couple of years. That would allow for more research on the small group markets.
However, Pallone said at the hearing he was happy lawmakers were coming together
There also appears to be support on the Senate side, which has introduced companion legislation.
“I think it is one of the [Affordable Care Act] fixes that has the most probability of finding bipartisan support,” according to a Senate Democratic staffer.
