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Senators Alexander, Risch, Rubio, McConnell Introduce Bill to Protect Health Insurance Plans of Millions of Americans

Bill would preserve the ability of small and mid-sized businesses to self-insure, prevent the administration from forcing their employees into exchanges

November 20, 2013

WASHINGTON, D.C. – Senators Lamar Alexander (R-Tenn.), Jim Risch (R-Idaho), Marco Rubio (R-Fla.), and Senate Republican Leader Mitch McConnell (R-Ky.) today introduced a bill that would protect the right of employers to provide insurance to employees through self-insurance plans. Today, 100 million Americans receive health insurance through employers or labor unions that self-insure, meaning they pay employee health costs directly.

Many companies that self-insure as a means of providing insurance also purchase “stop-loss insurance,” which protects them against an outsized medical claim that would cause financial damage. In an effort to force these businesses to stop self-insuring and push more Americans into the Obamacare exchanges, the Obama administration has signaled interest in ending stop-loss insurance as it exists now.

Alexander, the senior Republican on the Senate health committee, said: “Any effort by the Obama administration to change the rules on companies that self-insure will break the president’s promise to millions more hardworking Americans. No matter if they like their employer’s health care plans, many won’t be able to keep them.”

“President Obama promised the American people time and time again that if they liked their current health insurance plan they could keep it,” said Risch.  “That promise was false; the proposal greatly changes millions of middle class Americans’ plans. This legislation preserves small employers’ and individuals’ ability to make their own insurance choices, allowing them to keep their important stop loss coverage.”

“For millions of employees in small and mid-sized businesses, keeping the health insurance they’re happy with means keeping their self-insurance health plans.  Unfortunately, the President could end up breaking his promise to these employees by ending these self-insurance plans and forcing these employees to find new ones,” said Rubio.  “Small and mid-sized employers should have the freedom to continue offering their employees the self-insurance health plans they are happy with.  That’s all this bill does.”

McConnell said: “Millions of Americans are living with the consequences of the President’s broken promises on Obamacare. In their zeal to defend their failing bureaucracy, the Obama administration must not break its promises to the millions of Americans who work at businesses that self-insure by preventing them from keeping the coverage they have and like.”

The Self-Insurance Protection Act (SIPA) ensures that employers are able to continue to provide quality health benefits to their employees through self-insured group health plans.

The bill is cosponsored by Senators John Boozman (R-Ark.), John Barrasso (R-Wyo.), Tom Coburn (R-Okla.), John Cornyn (R-Texas), Mike Crapo (R-Idaho), and Mike Enzi (R-Wyo.).

Employers offering health insurance to their employees are increasingly choosing to self-insure, meaning they directly pay their employees’ healthcare costs. This is true for all types of employers, including corporations, municipalities, and non-profit organizations. Sixty one percent of the commercial health insurance market is self-insured—a figure that has been growing steadily over three decades.

Self-insurance provides employers with the flexibility to customize their employee health benefits to best meet the specific needs of their workforce. Self-insurance also helps control costs because employers can more directly manage benefits such as wellness programs that save money and make people healthier.

Stop-loss insurance is a form of financial reinsurance that protects employers who pay health care costs directly from large claims that would cause financial hardship. The Obama administration has signaled interest in reclassifying this as health insurance, requiring it to meet all the requirements of health insurance policies under federal law, a move that could eliminate this as a tool for mitigating employers’ risk.

Washington, D.C.U.S. Senate Republican Leader Mitch McConnell made the following remarks on the Senate floor regarding the predictable consequences of Obamacare:

“In recent weeks, we’ve seen a lot of handwringing on the other side of the aisle over Obamacare, a little shock here, a little dismay there, and more than a little feigned outrage.

“What we haven’t seen, of course, is anything even approaching a good answer as to why the President told the American people one thing and did the other. Or a solution to the national crisis of millions of Americans — some with very serious medical conditions — heading into the holiday season having just been told they will lose their health care plans.

“The folks who voted for this law and the President whose name it bears did everything they could to keep these folks in the dark about the realities of Obamacare for more than three years.

“But the problems we’re seeing shouldn’t come as news to anyone – least of all our Democrat friends.

“Because what we’ve seen are the utterly predictable consequences of Obamacare.

“And the fact is, a lot of folks warned about these kinds of consequences coming to pass. But the President’s political machine just steamrolled anybody who spoke up. They laughed it all off. Dismissed everyone else as naysayers and cynics.

“When all the while they basically knew we were right.

“Countless independent experts, health-care professionals, and insurance authorities across the country all warned about what we’re seeing now.

“And so did many of us.

“If only the Democrats who run Washington had listened.

“But the President needed their votes for a bill he hoped would define his legacy, so they gambled that their constituents would just learn to live with Obamacare and forget the false promises.

“In other words, Washington Democrats were specifically warned about the kinds of consequences we’re seeing and they voted for Obamacare anyway.

“Republicans repeatedly warned about Americans losing their health plans. Repeatedly.

“We repeatedly warned about Americans losing access to their doctors and hospitals.

“We repeatedly warned about rising costs and skyrocketing premiums.

“Check the Congressional Record. We warned and we warned and we warned about each of these things.

“Frankly, we shouldn’t have had to. It doesn’t take an actuary to figure this stuff out.

“And the things my constituents now have to put up with as a result of this law they’re simply unacceptable.

“Kimberly Maggard from Nicholasville wrote that the health plan available to her through the Obamacare exchange would cost more than her family’s house payment and car payment combined.

“Here’s what she said: ‘We are just average Kentuckians working and living paycheck to paycheck without any assistance from government programs. I really don't know what we will do if we have to pay that amount out for insurance. We might lose our home…our transportation…my daughter might have to drop out of college…the list just goes on and on. What are we supposed to do?’

“Harriet White from Rockfield said that Obamacare is negatively impacting her family’s finances and quality of care. ‘The sad truth,’ she said, ‘is that like my co-workers, my deductible has doubled along with my premiums. The only way to be able to adjust is for us to either reduce or stop our 401K contributions. This is hardly affordable health care.’

“And here’s Larry Thompson from Lexington: ‘[The] health plan that I've had for 10 years just got cancelled, and the least expensive plan on the exchange is a 246% increase – that means hundreds of extra dollars per month we don't have.’

“Look: All of this is unacceptable. And so many of Obamacare’s consequences were basically predicted by Republicans years ago.

“So it’s no wonder vulnerable Democrats are dashing for the exits, performing political contortions that would make Houdini blush. But here’s the thing: until these folks are willing to face reality, I doubt it will matter.

“One of our colleagues on the other side was asked in 2009 if she’d accept ‘100% responsibility’ and ‘100% accountability’ for the failure or success of any legislation she voted for. She said she would.

“So she and her colleagues now have a choice.

“They can keep trying to distance themselves from Obamacare in public while simultaneously protecting it from meaningful change in private – to keep standing by as this trainwreck unloads on the middle class.

“Or they can simply accept that they were wrong to ignore all the warnings, then work with Republicans to repeal and replace Obamacare with real, bipartisan health care reform.

“If Washington Democrats are looking for a political exit, that’s the only meaningful one available.

“And if they’re looking for the best policy outcome – to do right by the people who elected them – they’ll reach the same conclusion too. That’s the good news.

“I hope they’ll get there soon.

“Because we’ve already seen Washington Democrats travel through just about every one of the stages of grief.

“Denial at first, claiming the law’s only problem was that it was just too popular.

“Then anger, pointing fingers of blame at contractors, Republicans, the media, really anyone but themselves.

“Then bargaining, proposing nips and tucks to a law that needs an overhaul instead.

“But for the sake of our country, let’s hope they just speed right along to acceptance – the acceptance that Obamacare can’t work and won’t work. And that their constituents deserve better.

“When they do, Republicans will be right here – just as we always have been – ready to work with them to start over with real reforms that decrease costs and improve access to care.

“That’s what our constituents have wanted all along. That’s just what we should give them.”

Washington, D.C.U.S. Senate Republican Leader Mitch McConnell made the following remarks on the Senate floor regarding cancelled insurance policies as a result of Obamacare:

“Over the past few weeks, we’ve seen vivid, painful confirmation of the predictions that many of us made about Obamacare.

“Most notable among them, perhaps, was that the President’s oft-repeated promise ‘If you like your plan, you keep it,’ just couldn’t be true.

“This was always what Democrats thought they had to tell the American people in order to muscle Obamacare into law. They knew it wouldn’t work otherwise. They knew the truth would not sell. And that’s all coming out now.

“But we’re also now learning a lot of other very unsettling things about this law.

“Like the fact that a lot of things that were working well in our health care system are now being thrown out for no good reason.

“By the same people who brought you the Obamacare website.

“High-risk pools are a good example.

“About three dozen states set up these kinds of pools to insure Americans with serious medical conditions, such as those suffering from diabetes and heart disease.

“High-risk pools have often proven successful and popular among the communities they serve. They currently provide insurance to hundreds of thousands of Americans, including thousands of Kentuckians, nearly all of them with pre-existing conditions…the very people the law was supposed to help.

“These folks benefit from this coverage and many want to keep it.

“Unfortunately, that will no longer be possible under Obamacare.

“Nearly all of them will lose their coverage at the end of the year.

“Just like millions of other Americans across the country, folks who like the coverage they have in these high risk pools — and remember, I’m talking about some of the most vulnerable people in our society — are now discovering that they won’t be able to keep it either.

“Despite what the President told us again and again and again.

“As it turns out, the folks who rammed this law through Congress think people in these high risk pools belong in Obamacare instead.

“They don’t think it matters whether my constituents want to get dumped into Obamacare or not…they’ve made that decision for them.

“Well, a lot of folks in Kentucky don’t think this is right, and they’re upset.

“And not just because they’re losing their plans, and all the hassle and complication that involves. For many of these folks, the plans they’re being forced into have more limited hospital and doctor networks than the plans they currently have. As one state official recently put it, ‘If you're in the middle of chemotherapy, the last thing you want to do is switch oncologists.’

“We seem to see these kinds of stories just about every day now.

“There’s the North Carolina woman with a severe heart condition who said she didn’t know if her cardiologists and her procedures will be covered under Obamacare. Here’s what she said: ‘It’s…the uncertainty that gets to me.’

“There’s the breast cancer survivor and her husband who’d been paying about $800 a month for premiums in a high-risk pool. After that policy was cancelled, they expected lower rates under Obamacare. Instead, they found their premium and deductibles could actually be going up.

“This is scary stuff. But these are the real-life consequences of Obamacare. This is no longer some theoretical policy discussion.

“And I would suggest that, as we contemplate the future of this law, our Democrat friends should start paying closer attention to stories like these.

“Because it’s not enough to have a messaging strategy and to play the old Washington game of trying to weather the P.R. storm until folks move on. These stories we’re hearing from our constituents are heartbreaking. This isn’t some hassle to move past. It’s a problem to solve. It’s what we were sent here for. And it’s what real health care reform should be about — about helping folks, not hurting them.

“So we don’t need to get past this news cycle, as some of the White House spinners seem to think. What we need to get past is a White House mentality that told us last week that passing a bill to codify the very promise the President made to sell the bill would ‘gut’ Obamacare…We need to get past a mentality that caused the President to issue a veto threat on a law that would let him keep his promise to the American people about keeping the health care plans they have and like.

“I mean, it’s almost comical watching the contortions the administration is making trying to explain this fiasco away. Over the weekend we learned through a White House leak to The Washington Post that the President’s new definition of success for the Obamacare website is four out of five users making it through the checkout line. Who thinks that’s acceptable? I don’t. And I can’t think of anybody outside the White House compound who will.

“And frankly, if this is the President’s way of restoring credibility on this law, by leaking out that the website won’t even work for one out of five users just a few days after vowing it would soon be running like a top…well, he’s got work to do. And the bar for clarity, honesty, and ‘success’ under Obamacare has sunk to new lows.

“Look: if you’re being treated for cancer and about to be dumped into Obamacare – the last thing you want to hear is that leaving one out of five people behind is now considered an Obamacare win. We’re talking about people’s lives here.

“This kind of mindset…whether we’re talking about a website or anything else … it’s deeply worrying.

“But then again, this has always been the problem with blind faith in massive government programs. It’s the old idea that we shouldn’t let the evidence get in the way of a good theory. That’s the mindset the supporters of this law are stuck in right now — just blindly adhering to the hope that this thing will work against all the evidence. It’s pretty distressing. And it’s going to have to change if we’re going to get anywhere.

“The real question right now should be obvious: what’s the Administration’s plan to turn all this around?

“We know they have a press plan – but what’s the policy plan?

“Does the administration have anything of substance to tell folks who are losing their plans? Does it have anything to tell folks in these high risk pools who could be losing their doctors? Does anyone over there know?

“I’ve said this before, and I’ll say it again. These are people’s lives we’re talking about. So it’s time for a reality check. The defenders of Obamacare have a choice: stand up for your constituents, or defend a law that’s falling apart before our very eyes – a law that threatens to drag down the quality and affordability of care for millions of Americans who need it, including those most in need.”