Ludicrous Taxifornia Healthcare Proposal
California keeps up its insane attack on businesses of all kinds, this time with a proposal to force small businesses away from money-saving self-insurance plans into the arms of more costly Obama-care plans.
The LA Times writes, California seeks limits on small-business self-insurance trend
Sensing a fresh threat to state and federal healthcare reforms, California insurance officials are seeking new limits on a controversial form of health coverage insurers are selling to small employers.
At issue is a new type of self-insurance for small businesses with as few as 25 workers.
Critics said insurers such as Cigna Corp. are using these new plans to game the system and cherry-pick companies with healthier workers. They said this could undermine a key goal of the federal Affordable Care Act to lower premiums by pooling together more healthy and sick Americans into insurance exchanges. Premiums could continue to escalate without a diverse pool of consumers. That prospect has federal health officials weighing action against this practice as well.
Self-insurance, in which employers pay medical providers for their workers' care, has traditionally been used only by large employers that have the financial resources to pay for expensive medical claims. A Kaiser Family Foundation study found that 60% of U.S. workers with health coverage were in self-insured plans last year.
Now some insurers are chasing after much smaller customers with new plans designed to limit employer payouts for big claims using what's called stop-loss policies. This guarantees that businesses won't be responsible for anything over a certain amount per employee, perhaps as low as $10,000 or $20,000, with the rest paid by an insurer. Regulators and health-policy experts say this arrangement undercuts the notion of self-insurance since employers aren't bearing much of the risk, and it allows companies to circumvent some state insurance rules.
California Insurance Commissioner Dave Jones will unveil proposed legislation next week that would bar insurers from selling stop-loss policies below a certain amount. The specific dollar figure is still under consideration, but some experts recommend a minimum of $40,000 per worker.
Officials in the Obama administration are keeping a close eye on developments in California and other states where insurers are aggressively selling these plans.
"We are working carefully to ensure that consumers in all markets have the protections guaranteed by the Affordable Care Act and will provide more clarity on the tools available to reinforce these protections soon," a spokesman for the U.S. Department of Health and Human Services said.
Monday, the U.S. Supreme Court will begin hearing arguments over the constitutionality of the federal healthcare law and specifically its mandate that individuals purchase health insurance.