The District’s Dime has written before about the benefits of having one DC marketplace for health insurance, and we are happy to report that the DC Council is moving to make that happen. Next Tuesday, the Council will vote on legislation to put in place a key provision of the federal health reform known as Obamacare. The bill will mandate that all individual and small employer health insurance plans be sold through DC’s newly-created health benefits exchange starting in 2015. The Council should approve this emergency legislation and adopt it as permanent legislation as well.
The key strength of a unified health insurance market as DC implements Obamacare is that employers and their workers, as well as individuals needing insurance, will benefit from one-stop shopping on the exchange’s online portal by the end of 2015. Traditionally, these groups have very few health plan options available to them, with costs that often are prohibitive. Putting all plans for small employers and individuals in one market increases transparency, competition, and choice.
Recent experience in California and Oregon have found that exchanges put downward pressure on prices, as plans must put their prices side-by-side and compete for business. This price competition increases small businesses’ purchasing power, allowing them to get higher quality plans and more choices for lower prices.
Under the emergency legislation being considered next week, most businesses will have at least 18 months and up to two years to evaluate the new options on the exchange. Opponents of the legislation, especially some in the insurance industry, want to delay the transition to a unified exchange, but that will only make the exchange less effective in expanding choice and competitive pricing. Delaying the market unification, even for another year, could have negative effects on rates, limiting businesses purchasing power or pricing them out of health insurance all together.
The legislation’s transition period, strikes a good balance between allowing employers flexibility in assessing new options on the exchange and maintaining a viable market with stable pricing. One proposal that might complement and improve the legislation is an amendment by Councilmember Catania that strengthens the Department of Insurance, Securities, and Banking’s authority to prevent unjustified premium increases and ensures public input in the rate review process. Such a proposal helps ensure that any increases in premium rates are directly tied to quality and cost of services rendered.
DCFPI thanks the Committee on Health and the Exchange Authority for their work on the legislation and their efforts to make the new exchange marketplace affordable and consumer friendly for the District’s residents, small businesses, and employees. A rally in support of the legislation will happen Monday, June 3rd at 9:00 a.m. in front of the John A. Wilson Building.
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