D.C. board votes to close private health insurance market


Washington, D.C., officials have effectively terminated the sale of private health for businesses and employees.

The D.C. Health Benefits Exchange Board unanimously approved closure of the private insurance marketplace for both individuals and small businesses, requiring them to purchase health insurance through a city-run exchange.

At press time, it remained unclear to the board whether the move required D.C. City Council approval to take effect. The board oversees the city’s health insurance exchange, which was mandated as a part of the Patient Protection and Affordable Care Act.

The law would be in effect in 2014.

The decision by the board was met with opposition from the small business community.

The law would apply to any business in the District with 50 or fewer employees, including those domiciled outside of Washington, D.C., but having a location with its borders. Employers could stay with their current health insurer if that insurer is part of the exchange, but reportedly would expect to see an increase in premium of up to 3%.

While a D.C. board subcommittee called the closure “market consolidation,” small business owners called it a drastic and unnecessary change to the marketplace.

A coalition of more than 150 small businesses and organizations sent a letter to Dr. Mohammad Akhter, chairman of the D.C. Health Benefit Exchange Board, expressing clear opposition to the move. The coalition argued that small employer budgets already are stretched thin, and that the proposal doesn’t expand options; instead, it substitutes one market for another.

“Eliminating choice by forcing individuals and small businesses to purchase standardized coverage through a government-run entity greatly increases costs and reduces competition,” said Scott Golden, a spokesman for the coalition and principal of insurance brokerage Golden & Cohen.

According to the coalition, the District’s proposal is unlike anything any other jurisdiction is considering. Dismantling and restructuring the marketplace leaves small business owners left with too many unknowns and is too disruptive, the coalition wrote.

The D.C. board did lower the threshold from 100 to 50 the number of employees that would be considered a small business, thereby allowing insurance brokers and agents the ability to continue servicing those firms with more than 50 workers in the District.

The decision also destroys long-standing relationships between coalition members and health insurers, and benefits advisors, and forces coalition members to buy “cookie-cutter coverage that will be offered through a government exchange.”

The D.C. exchange is being created with federal funding of about $73 million, and reportedly will move forward despite the outcome of the upcoming presidential election and promises by candidate Mitt Romney to dismantle the health care law.

The coalition’s letter to the D.C. board stated that the new law outlawing private insurance purchases in the District promises regarding the health reform law outcomes, stating that it betrayed “President Obama’s repeated assurances that, ‘If you like your health plan .?.?. you will be able to keep your health care plan. Period.’?”


6 Responses

  1. Insurance Wholesaler Says:

    WOW!! Another LIE uncovered!!! If have coverage and you like your coverage, you can keep your coverage!! We all knew this was coming, just thought the Democrats would wait until after the election to start showing their spots!

  2. MD P&C retailer Says:

    Obama socialism at its best. What industry is next for takeover? Where is the uproar?

  3. Archer Jordan Says:

    As an independent broker I find this exclusion of private brokers to be contradictory to the wellfare of small businesses. To expect a government run exchange to be considerate of all the individual circumstances that we in the brokerage community have encounterred and dealt with over many years in the business is a reckless disregard for sound advisory service.

  4. Allen Crenshaw Says:

    Small business owners in D.C. (and everywhere else) should simply cancel their health plans and send employees to the exchange(s) directly. Since U.S. employers with less than 50 full-time employees are exempt from the penalty-tax for not providing health insurance, this is a no-brainer decision for them!
    -Allen in Chicago

Pages linking to this article:

  • DC Exchange - No Private Exchange Allowed

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