CHICAGO – A growing number of states are mounting legislative attacks meant to protect the Patient Protection and Affordable Care Act by hurting the self-insurance business.
That was the big message Tuesday at one of the first sessions to kick off the Self-Insurance Institute of America annual conference, a panel presentation that included updates from the organization’s chief lobbyist, its lawyer and the chairman of its government relations operations.
“We need feet on the streets on this,” said Horace Garfield, chair of the organization’s Government Relations Committee. “The regulation by states of stop-loss is going to be our No. 2 issue, after [PPACA].”
Regulators in California, Maine, Minnesota, Utah and Washington are concerned a growing number of companies with young, healthy employees will decide to self-insure to skirt the PPACA’s minimum coverage standards. Carriers — and the exchanges being set up under Obamacare —then will be left with disproportionate numbers of older, sicker people more expensive to insure.
That, in turn, could drive up costs for workers at other companies, as well as the premiums for uninsured people seeking coverage in the exchanges.
SIIA, of course, doesn’t agree with that analysis.
Mike Ferguson, the trade group’s president, said it’s taken various steps this year to bolster its position, including established partnerships with other large business groups to create the Self-Insurance Defense Coalition. Soon, labor groups might be added to the coalition, he said.
He also said SIAA is “not afraid” to go to court, if need be.
That’s more likely, given the growing concern expressed by state regulators about self-funding, said John Eggersten, the organization’s lawyer.
He predicted more states will try to make it “unpalatable” to small employers by placing limits on stop-loss insurance.
“I suspect it will be a big fight,” he told the audience.
Jerry Castelloe, chairman of the group’s PAC, said the group this year began reaching out to more moderate Democrats on House and Senate committees that regulate the industry. He also urged members of the organization to reach out to their federal lawmakers to make their case.
“Be strategic in your seat selection,” he advised those who are able to arrange luncheon presentations with their congressional representatives. “Be sure you’re either directly across from them or on either side, so you can have that running conversation.”
Self-insurance was on the rise before PPACA became law in 2010. A study by the nonpartisan Employee Benefit Research Institute found that about 59 percent of private-sector workers with health coverage were in self-insured plans in 2011, up from 41 percent in 1998.
Perhaps ironically, the risks of going the self-insurance route are less today, thanks to PPACA. In the past, self-insured companies might have found it difficult to switch to the insured market if employees developed costly illnesses. Under the law, companies now can switch more easily, because carriers can no longer deny anyone coverage.