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House Health Insurance Exchange Bill is not one that small business wants


Fri, Mar 8th, 2013
Posted in All Government

ST. PAUL, MN - Despite the fact that the advocates of House File 5 keep claiming that they are passing the bill to help small business, the state’s major small-business group, the National Federation of Independent Business Minnesota, with more than 13,000 members statewide, is opposed to several provisions in this bill and is concerned about the fact that it is going to increase cost on small employers and individuals.

“We hope House members will realize that the new 3.5 percent assessment on small employer and individual health premiums is a mistake,” said NFIB/Minnesota State Director Mike Hickey. “This 3.5 percent increase comes on top of a 2.8 percent increase and will bring total new assessments under the Affordable Care Act (ACA) to 6.3 percent. This is coming on top of very large increases for some small groups and individuals due to the underwriting reforms imposed on the 50-state insurance markets by the federal act.”

Hickey noted that the only actuarial analysis done to date, by Gruber Gorman, is estimated average individual market increases of 29 percent with high increases of 42 percent, and in the small group market, increases ranging as high as 28.5 percent, but decreases for some groups (older, sicker) that will range to a 22 percent decrease. “The last thing small business needs is for the state to raise their health insurance premium 3.5 percent for an exchange that the vast majority of small businesses are not going to utilize,” said Hickey.

Hickey also noted that NFIB is opposed to the active purchaser provision in the bill despite its revision. For one year the exchange board will have to accept all insurers that meet stated criteria, but in the second year, they could arbitrarily reject insurers for any reason, and NFIB fears this could really limit choice for people who are in the exchange.

NFIB is also opposed to the conflict-of-interest provision, which bars any person who is currently employed in the insurance industry or related industries or recently retired from serving on the board. The restrictive language under the law states that you have to have been separated from employment in insurance or a related industry for one year. “We need people on the exchange board who understand insurance and are going to make the right decisions, not a lot of people who have no background at all in this complicated industry.” Hickey also noted that small business supports more accountability for the exchange and for extending the normal rule-making process to the exchange, so that they can better inform citizens and people who work in this industry regarding actions they may be taking.

“Finally, we question the enormous cost of the exchange at an estimated $165 million. That is extremely expensive to set up a web portal to assist people in purchasing health insurance and administer the subsidies of the ACA. The Legislature should take a second and third look at this large cost and reduce it,” said Hickey.

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