Small Firms Caught in Health-Policy Limbo

From The Wall Street Journal:

Davidson Goldin was disappointed when he learned in September that his small business's health-care plan was being discontinued. Now it's possible he'll be able to keep it after all.

 

President Barack Obama on Thursday said he would allow insurers to extend by one year those policies they had canceled for failing to meet the health-care law's requirements.

 

Such policies include small-group plans, which apply to employers with fewer than 50 or 100 employees, depending on the state.

 

Separately, the House of Representatives passed a measure Friday that would grant insurers permission to sell plans due to be canceled under the health law to new customers as well as the already enrolled for one more year.

The White House said that Mr. Obama would veto the bill, saying it would allow insurers to sell substandard plans to new customers. The Senate isn't expected to vote on it.

 

Under the law, "all policies have to cover a broad range of benefits that go beyond what many small businesses are currently offering to their employees," said Robert Zirkelbach, spokesman for America's Health Insurance Plans, an industry group in Washington, D.C. "Coverage will be more comprehensive, but it will also be more expensive."

Some small-group plans are also expected to cost more under the law because starting in January insurers will be prohibited from setting premiums for such policies based on a firm's industry or the health or gender of its staff. Insurers will still be able to take into account the age of a firm's workers, though to a lesser extent, and whether or not those people use tobacco. Brokers say the change will drive up premiums for companies with lots of young, healthy workers, while moderating rate increases for firms with older and sicker workers.