Challenge raised whether businesses can be forced into exchanges

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Rep. Darrell Issa, R-Calif. (File photo)Rep. Darrell Issa, R-Calif. (File photo)

Republicans are asking whether officials in Vermont and the District of Columbia really have the authority to force some or all health insurance business onto the new Patient Protection and Affordable Care Act exchanges.

Rep. Darrell Issa, R-Calif., and other leaders of the House Oversight and Government Reform have sent a letter asking about local officials' ability to shut down non-exchange markets to U.S. Health and Human Services Secretary Kathleen Sebelius.

Related story: 8 things to know about PPACA state exchanges

The lawmakers also have sent similar letters asking about the matter to officials in Vermont and the District of Columbia.

D.C. officials are trying to get all individuals to buy coverage through their district-based exchange, and for all small groups to get their coverage through the exchange by 2015. Health insurance agents and brokers could still sell the coverage but would have to work with the exchange.

Vermont is trying to move its individual and small-group markets onto the Vermont exchange.

The D.C. proposal and the Vermont proposal are "inconsistent with principles of consumer choice and competition," Issa and colleagues wrote in the letters.

State or D.C. efforts to eliminate non-exchange markets conflict with PPACA, which states that nothing in PPACA is supposed to keep companies from selling coverage outside an exchange or to keep individuals from buying coverage outside an exchange, the lawmakers said.

The D.C. and Vermont efforts to shut down non-exchange markets "violate the principle of voluntary participation in exchanges that was codified in PPACA and reaffirmed in your guidance when you wrote that 'participation in a [small business exchange] is strictly voluntary for small employers," the lawmakers told Sebelius.

D.C. officials have argued that they need to unify their individual and small-group markets on the district's exchange because the district is too small to have successful, separate exchange and non-exchange markets.

In Vermont, state officials told the Associated Press that they believe PPACA gives states broad authority over regulation of any non-exchange health insurance markets under their jurisdiction and clearly gives states the authority to impose rules that are more strict than the rules imposed by PPACA.

Dave Gram of the Associated Press contributed information to this article.

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Original article at BenefitsPro

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