State Politics

A bill promising cheaper health insurance fails in NC House. Is it dead?

A proposal to make cheaper health insurance options available in North Carolina was rejected by the state House late Thursday after lawmakers from both parties said they need time to review the bill. Opponents said the proposal could hurt people with pre-existing conditions and said that such plans are not regulated.
A proposal to make cheaper health insurance options available in North Carolina was rejected by the state House late Thursday after lawmakers from both parties said they need time to review the bill. Opponents said the proposal could hurt people with pre-existing conditions and said that such plans are not regulated. NYTNS File Photo

A proposal to make cheaper health insurance options available in North Carolina was rejected by the state House late Thursday after lawmakers from both parties said they need time to review the controversial concept.

The 53-38 House vote against legislation that had cleared the Senate earlier that day will, for the time being, keep North Carolinians from accessing health coverage that can charge younger, healthy people much less than older, sicker customers pay.

Supporters said the option, House Bill 933, would bring relief to people in Affordable Care Act plans who have seen their costs triple in recent years but are making too much money to qualify for ACA's federal subsidies. Critics said the bill would gut the ACA by peeling away the most profitable customers and turning the ACA into a high-risk pool with exorbitant prices.

But the concept is not dead.

On Friday, Sen. Ralph Hise, the Republican from Spruce Pine who added the health benefits proposal to HB 933, said it was his understanding that House members were meeting to discuss the bill on Friday.

"If the House does not complete the bill this session I remain committed to principles that open up the insurance market and provide lower cost options for working families," Hise said.

The health care proposal was backed by the N.C. Farm Bureau, whose director Larry Wooten said Friday that the underlying need for cheaper health options remains unaddressed. He said his organization, which has 551,000 member families, is urging lawmakers to revisit the proposal in the future if they can't make it work in the short legislative session, which is winding down.

"We're not going to give up on it unless the legislature says we're not going to do it in North Carolina," Wooten said. "Too many people are hurting and forgotten under the ACA."

In the House vote late Thursday night, the House did not "concur" with the Senate version of the bill. The legislation originally came out of the House in mid-May as a one page bill to allow the state to license nationally certified school psychologists. The Senate expanded it into a 20-page bill that included a proposal to allow health benefit plans, which can charge according to health condition and reject applicants with pre-existing conditions. The bill passed the Senate on Thursday and was sent back to the House. The House had to approve the bill again because of the Senate's changes.

On Thursday, the proposal on school psychologists was added to Senate Bill 735, a bill to reform financial reporting requirements for occupational licensing boards. That left the health care proposal in limbo.

Brendan Riley, health policy analyst for N.C. Justice Center, said it's hard to see how the provision could come back up before lawmakers end the short session.

"But it’s hard to know what may be in store with how many bills they’re working through at such a quick pace," Riley said.

Health benefit plans were largely outlawed as "junk" insurance by the ACA. The federal health care law passed Congress in 2010 and began requiring most Americans to have health insurance starting in 2014. ACA policies must offer a mandated menu of benefits and are restricted on pricing based on health condition and age. The federal mandate to have health insurance was lifted this year, and it's not clear how much longer the ACA will remain in effect as a Republican-controlled Congress and President Donald Trump vow to undo the law.

Health benefit plans, sometimes called association health plans, are cheaper for a number of reasons. They are not regulated and don't have to meet financial solvency requirements for sufficient funds to pay customers' medical bills. They don't cover mental health benefits or preventive health services, unlike health insurance regulated under the ACA, but customers can sometime pay extra for that coverage.

HB 933 would let only those organizations that have been in existence for 10 years and have statewide memberships in all 100 counties offer health benefit plans. But the organizations don't restrict membership, creating the possibility that legions of people would join for the cheaper health benefits. An annual membership in the N.C. Farm Bureau, for example, costs just $25 a year.

Opponents of the bill include the March of Dimes, American Heart Association, American Lung Association, National Multiple Sclerosis Society and the American Cancer Society Cancer Action Network. Blue Cross and the N.C. Department of Insurance, which regulates health plans, said the proposal requires more analysis.

Just two states allow nonprofits to sell membership health benefit organizations. Tennessee has allowed the practice since 1993; Iowa approved the change in April but it hasn't been implemented. Tennessee's "traditional health plans" covered 39,478 people as of May 31.

In January, the Trump Administration proposed a similar exception to the ACA. The proposal is still under review and would not allow providers to charge individuals higher premiums based on health conditions or to reject applicants because of poor health.

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