What does the tea party have against helping small businesses find affordable health insurance for their employees?
Tea party-linked groups have recently spiked legislation in three states that would have authorized federally funded planning to create health insurance exchanges. Activists successfully blocked the efforts of these GOP governors to explore market-based alternatives that would address the stubbornly high ranks of the uninsured in their states. In doing so, they blanketed Republican supporters of this exchange legislation with claims of complicity in the enforcement of “Obamacare.”
The tea party’s success — and the unintended consequences for a constituency with whom they share a number of small government principles — says a lot about the current state of health care policy-making in the states.
Under the new health care law, the Patient Protection and Affordable Care Act, states are required to establish two web-based shopping portals (exchanges): One for lower-income individuals without coverage, who will receive tax subsidies to purchase insurance, and the other for small businesses that can make coverage available to their employees through the exchange. If a state fails to do so, the federal government is charged with creating exchanges on their behalf.
Most recently, Oklahoma Gov. Mary Fallin finally relented to a month-long grass-roots effort to force the state to refuse a $54-million federal grant to fund the technology backbone for the state-run exchange — something she had identified as a top priority in her State of the State address just a few months ago. She returned the money at a time when Oklahoma is grappling with a $500-million budget deficit.
Other GOP governors, like South Carolina’s Nikki Haley and Georgia’s Nathan Deal, have taken similar flack from tea party groups for attempting to study the desirability of establishing an exchange. Each of these governors is an avowed opponent of the new legislation. Both Fallin and Deal, as House members in 2010, actually voted against the bill. But they considered it worth exploring — on the federal government’s dime — whether a market-based exchange could bring some relief from the burden that individuals and small employers face in the current insurance market.
The conservative trio also bristle at the thought of the federal government gaining a beachhead in their state’s insurance market by establishing an exchange there.
In announcing that Oklahoma would refuse the federal dollars, Fallin and her GOP allies in the legislature put forward a revised exchange proposal. Their plan would create a Health Insurance Private Enterprise Network, based on a model developed by the conservative Heritage Foundation. This network is billed as providing safeguards against the implementation of a federally run exchange — though how that would be accomplished is not clear.
The announcement indicated that plan selection for the network would go beyond those meeting the minimum benefit standards included in the federal health legislation.
Politics aside, it is clear that the small group and non-group insurance markets in many states are woefully dysfunctional. Nationally, fewer than half of all businesses with between three and nine employees offered employer-sponsored coverage in 2009. Rates increase only slightly, to 59 percent, for small businesses with as many as 199 employees.
By comparison, 99 percent of all companies with 200 or more workers offer insurance.
The cost and complexity of offering health coverage to employees are recognized as the two biggest obstacles to providing this benefit. Supporters claim that a well-designed small business exchange could address both.
Here’s where the irony of the tea party’s “no exchange ever” stand kicks in. The states where the group has the most influence, including Oklahoma, Georgia and South Carolina, are among the worst performers in what might be called the “small business coverage gap” — the difference in the percentage of businesses over and under 50 employees that offer insurance coverage. This dividing line is important, since it is expected to be the cut-off point for accessing the small business exchange in most states.
Among the bottom 25 states (those with the largest gaps), 80 percent have Republican governors. Nearly three-quarters of the House and Senate chambers in these states are under GOP control and may well be susceptible to similar types of anti-exchange lobbying by tea party groups.
If this proves true, the individuals and small businesses who might have had a seat at the table in helping design an exchange responsive to the unique — and particularly negative — conditions of the local insurance market will be denied that opportunity.
By forcing Republicans interested in finding a more conservative approach for a state-based exchange, the champions of states’ rights could guarantee that a federal solution is imposed.
Good for the leadership in Oklahoma for not ditching the idea of establishing an insurance exchange when confronted by anti-Obamacare forces.
If a change in name and a (legally dubious) vow not to implement the federal reform law is enough to allow lawmakers to move forward, it’s safe to assume that the 18 percent of Oklahomans currently without coverage can live with it.
Those in other states where the tea party is strong may not be so lucky.
Frank Micciche is a senior adviser on health reform and insurance exchanges at McKenna Long & Aldridge.
Filed under: Health Care Law Implementation Tagged: | Affordable Care Act, Georgia, Health Care Reform, health insurance exchange, insurance marketplace, Mary Fallin, Nathan Deal, Nikki Haley, Oklahoma, Small Business, South Carolina, Tea Party