Joel Ario Speaks to Modern Healthcare on Mandatory Coverage for Small Businesses
"GOP Lawmakers Want Assurances State Exchanges For Small Business Aren't Mandatory"
Modern Healthcare
July 1, 2013 - Manatt's Joel Ario, a managing director with Manatt Health Solutions, spoke to Modern Healthcare about why Washington, D.C. and Vermont are requiring individuals and small businesses to buy insurance coverage only through the public insurance exchanges.
As reported by Modern Healthcare, last October, the D.C. Health Benefit Exchange Authority board voted unanimously on a small business mandate that requires individuals covered by the ACA, as well as small businesses not offering health insurance as of December 31, 2013, to buy coverage exclusively through the D.C. exchange. Vermont also passed a law that would require all small businesses to buy coverage only in that state's public exchange.
The issue of size is a leading factor in D.C. and Vermont's decisions, said Ario. When the health reform law bill passed, Ario explained, some had suggested that 50,000 to 100,000 lives would be a normal number in the exchanges; smaller states are concerned about having sufficient scale. Insurance pools must have sufficient size to ensure an optimal mix of health risk among members.
"In both cases, you're dealing with a similar environment: a small geographical area with a small population so you have more trouble getting the exchange to a scale where it can operate most effectively," said Ario, who was Pennsylvania's insurance commissioner from 2007 until 2010 before he served as director of HHS' Office of Health Insurance Exchanges. "That's a lot of what's driving this."
Another factor could be that tax subsidies for individuals to induce them to buy coverage are more substantial than those for small employers, so there is less incentive for employers to enter the small group exchange, Ario added.