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Health Insurance Marketplace Modernization and Affordability Act

Date: March 30, 2011
Source: Admin

Abstract:

The Health Insurance Marketplace Modernization and Affordability Act (HIMMA) is a federal measure whose purpose is to safeguard consumers by expanding healthcare access and reduce costs through the creation of small business health plans and modernization of the health insurance marketplace.

Health insurance is impacted in several ways:

Though the bill’s purpose is to make insurance affordable for small businesses, enforcement does not allow states to authorize coverage of benefits, services, or categories of providers for individuals, small groups, or large groups.
Insurers can to sue states that do not comply.
The bill sets a ceiling on, but no floor under, what states can do to protect insurance consumers.

Overview

HIMMA amends the Employee Retirement Income Security Act of 1974 (ERISA) to allow small businesses to band together to buy health insurance. These group plans will help small employers and the self-employed get a better deal in the health insurance. They would be exempt from most state laws and regulations governing health insurance.

Title I

Small Business Health Plans (SBHPs)

· Allows small businesses to group together to buy health insurance.

· Group plans will help small employers and the self-employed get a better deal in the health insurance.

· They would be exempt from most state laws and regulations governing health insurance.

Title II

Deregulation of the Private Health Insurance Market

· Grants most insurers operating in the private market an exemption from most state laws and regulations.

· Insurers do not need to follow state requirements regarding benefits, services, or providers.

· Small group insurers exempt from state rating rules.

Title III

“Harmonization”

· Establishes a commission to write new federal regulations that set aside, or preempt, state laws governing health insurance marketing, prompt payment, internal review, and form filing.

· This commission has no meaningful consumer participation.

Negative Impact of the Bill

Lack of Consumer Protection	· Preempting state insurance laws would prevent states from regulating insurance rates, overseeing how insurance companies handle customer complaints. This would lessen the protections offered to consumers in virtually every state
Elimination of Valuable Benefits	· Benefit protection that exists in vast majority of states would remain, thereby eliminating important benefits that states have provided their citizens.
Loss of Benefits for the Old and Sick	· Stronger state laws that limit the ability of insurers to vary premiums based on age, gender and geography would be preempted. This would leave older and sicker Americans out of the health insurance market.
Increase in Junk Insurance Policies	· The exemptions from state insurance regulations would allow insurance companies to sell “junk insurance policies” that fail to provide adequate coverage of needed medical care.