Legislature Sinks Healthcare Pooling Bill
State lawmakers fortunately chose not to take action on a misguided health insurance pooling bill that would have saddled the state, taxpayers and small businesses with multiple financial risks.
Under HB 5487, the state employee health insurance plan would have been opened to certain outside groups, including small businesses and it would have been problematic for several reasons.
First, the state employee plan is a self-insured system, which means the state would have been liable for paying the medical cost of all participants in the plan—an open-ended financial gamble.
Without knowing the health-risk profiles of the new groups of people entering the plan, the state would have little idea of how much it would have to pay in medical costs for these new participants.
Second, since the state plan is a self-insured system, it would be disallowed from the federally mandated state health insurance exchange. Only fully licensed health insurance products can be sold through the new exchange.
The pooling program envisioned under HB 5487 could only succeed at the expense of weakening the new health insurance exchange.
Finally, HB 5487 would have given the state comptroller great leeway in terms of being able to cherry-pick the small player health insurance market.
This would have effectively kept less healthy and more expensive lives out of this new program. Those are who most in need of access to health insurance would have been priced out under HB 5487.
CBIA thanks the legislature for recognizing that HB 5487 would have been a risky and misguided proposal to adopt.
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