Crossposted from Progressive Pulse. Post by Adam Searing
Today at the General Assembly, NC State Employees’ Health Plan CEO Jack Walker presented on the effects of the new federal health reform law on the state health plan to the Blue Ribbon Commission on the State Health Plan. Walker made a stunning statement at the hearing regarding what he sees as drastic changes to the State Health Plan by the new reform law.
“I see the potential for half of our enrollment to go to the health insurance exchange because it will be cheaper.” Walker asserted that this was the case because state employees below 400% federal poverty level (FPL) – about $88,000 a year in annual income for a family of four – will be eligible for vouchers and health insurance subsidies to go purchase cheaper health insurance in the new state health insurance exchanges.
One problem. Walker’s statement is simply not correct – he has missed clear provisions in the law.
The best summary of the health reform law has been put together by the Kaiser Family Foundation. The section dealing with requirements for employers couldn’t be more clear:
Employees who are offered coverage by an employer are not eligible for premium credits unless the employer plan does not have an actuarial value of at least 60% or if the employee share of the premium exceeds 9.5% of income.
Require employers that offer coverage to their employees to provide a free choice voucher to employees with incomes less than 400% FPL whose share of the premium exceeds 8% but is less than 9.8% of their income and who choose to enroll in a plan in the Exchange.
The North Carolina State Health Plan does not require its employees to pay any premium at all for individual coverage, much less a premium that exceeds 8% of their income. The State Health Plan, even with the large cost sharing requirements in place right now, easily meets the “actuarial value of at least 60%” threshold – that just means it can’t be a Swiss cheese plan that covers very, very little.
Therefore, no state employee, regardless of income, will qualify for either a premium credit or voucher if the employee decides to go to the health insurance exchange. Sure, the employee could decline premium-free state health coverage and go buy coverage on the exchange, but the employee would get no subsidy and the state health plan would have to pay nothing in vouchers or penalties. On the exchange, an employee could easily be required to pay $200 or more a month in premiums for the exact same coverage they get for no premium at all in the State Plan. No employee would do this.
The Center on Budget and Policy Priorities lays out the law clearly with regard to employers as well and concludes that the Congressional Budget Office estimates are correct – there will be little change in the number of employees getting health coverage through their employer as a result of the new health reform law.
Walker’s statements about major changes to the State Health Plan are incorrect and irresponsible. The health reform law is designed to encourage employers to continue to offer coverage and employees to continue to get that coverage.