House backs bill extending small-group plans that violate ACA

Legislation that would allow insurers to continue selling small-group plans that don't comply with the coverage requirements of the federal healthcare law through 2018 cleared the House with bipartisan support on Wednesday. But there is practically no chance the proposal will be taken up this year by the Democratic-controlled Senate.

The legislation mimics the policy previously announced by the Obama administration that allows individuals who want to keep their noncompliant plans to do so through 2016. That change was made in response to an outcry over a wave of plan cancellations last year.

The legislation, the Employee Health Care Protection Act of 2013, was sponsored by Rep. Bill Cassidy (R-La.), who is seeking to oust Democratic Sen. Mary Landrieu of Louisiana. The race is among a handful expected to determine which party controls the Senate in 2015. Conservative group have run ads attacking Landrieu on the issue of plan cancellations.

“It is a common-sense bill that provides relief to millions of Americans,” Cassidy said during the debate over the bill on the House floor.

The Congressional Budget Office found that the legislation would reduce spending by $1.25 billion through 2020. That's because it anticipates that the noncompliant plans would be less expensive and therefore the federal government wouldn't spend as much on subsidies.

But Edwin Park, a health policy expert at the left-leaning Center on Budget and Policy Priorities, warned that the change could destabilize the small-group market, causing premiums to spike and undermining consumer protections in the Patient Protection and Affordable Care Act, including the prohibition on charging higher premiums to companies with older, less healthy workforces. In addition, Park predicted that the extension would threaten the viability of Small Business Health Options Program marketplaces, which were established under the ACA but have struggled to get off the ground.

The final vote tally was 247-167 in favor of passage. Twenty-five Democrats joined all Republicans in voting for the bill. House Democrats argued that the proposal was a political stunt rather than a serious proposal and that Republicans have failed to offer any credible alternative to the ACA.

“We can't shake their obsession with undermining the law,” Rep. Frank Pallone (D-N.J.) said.

Follow Paul Demko on Twitter: @MHpdemko