In Focus: State insurance commissioner adds to ACA confusion

November 29, 2013 

Washington State Insurance Commissioner Mike Kreidler made national news when he quickly rejected President Obama’s call for insurers to extend individual health insurance policies cancelled because of the Affordable Care Act (ACA), also referred to as Obamacare.

While 5 million insurance policies have been cancelled to date, the Obama administration estimated that as many as 18 million of these policies will be cancelled because of the ACA.

Here in Washington, about 290,000 people have already received cancellation notices. While Kreidler and Obamacare supporters say the coverage was substandard anyway, those policies were all accepted by the Office of the Insurance Commissioner. In the wake of his announcement, Kreidler sought to reassure consumers, saying that the cancelled individual policies are just a small part of the market and suggesting that most people aren’t affected because they’re insured through their employer.

Many others have an opposite view.

In fact, in 2010, the Obama administration estimated that half of all employer-based policies would be illegal under the ACA. And just a few weeks ago, the Justice Department reiterated in federal court documents that a majority of employer-based health plans are expected to be cancelled because of the ACA.

How many people could that affect? The Congressional Budget Office estimates that 156 million Americans — more than half the population — are covered by employer-sponsored insurance.

In a recent interview with The Washington Post, Kreidler said he rejected the president’s call to extend cancelled policies because it could cause confusion and destabilize the state insurance market.

But months ago, the commissioner stopped insurers in our state from renewing their employer-based policies early — before they expired — even though nothing in state or federal law prohibits it. The early renewals would have caused no market confusion or destabilization, yet they were stopped.

The commissioner has also repeatedly moved against a popular category of comprehensive and affordable employer-based health plans enjoyed by almost 500,000 people in Washington who depend on their small-business jobs for health insurance. They’re called Association Health Plans, or AHPs. Association Health Plans were approved under Gov. Mike Lowry in 1995 as a way to help small employers provide high quality, more affordable health coverage for their workers. A strong majority of Democrat and Republican lawmakers voted for the bill.

In 2007, Kreidler tried to change the rules on AHPs, even though he had no authority under state law to do so. This would have restricted the ability of small employers to purchase coverage through Association Health Plans — but he didn’t ask the Legislature for the authority to make those changes.

A Spokane court found that, in acting unilaterally, Kreidler had disregarded the separation of powers doctrine, violating state law and the state constitution.

The court ruling allowed small employers to continue purchasing more affordable, comprehensive coverage for their workers and families. As a result, Washington’s small employers have had access to some of the best coverage and rates in the nation. Kreidler is again trying to strip small employers of their access to Association Health Plans — this time suggesting that AHPs don’t comply with Obamacare. But state law makes it clear that AHPs can continue, even under federal programs like Obamacare. And, of course, President Obama made it clear that states could allow you to keep your plan if you like it. Needless to say, this is causing uncertainty and confusion in Washington’s private health insurance market — the very thing Kreidler said he wants to avoid.

Kreidler says he’s doing everything he can to implement the federal Affordable Care Act. But, as Washington’s insurance commissioner, his first duty is to comply with state law — and that means defending and preserving Association Health Plans for the half-million people who depend on them.

Don Brunell is the president of the Association of Washington Business.

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