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AP Photo/Andrew Harnik

A little-noticed provision of the Senate health care bill — one that provides new insurance options for small businesses and the self-employed — could have big consequences, potentially making it harder for sick people to get affordable coverage.

  • What the experts say: The provision, as written, could cause "fragmentation of the market resulting from an unlevel playing field. This is likely to lead to cherry-picking, adverse selection, and increased costs for sicker individuals," the American Academy of Actuaries wrote in a letter to members of Congress and governors.
  • This echoes concerns about Sen. Ted Cruz' proposal to let some insurers offer plans that don't comply with the Affordable Care Act's regulations. "This is kind of a baby version of the Cruz amendment, in that it creates a parallel, much more loosely regulated insurance market," Larry Levitt, vice president of the nonpartisan Kaiser Family Foundation, told me.
  • What we're watching: Whether the provision, which establishes "small business health plans," starts to get more attention among Republican senators. Although conservatives support the idea, wary moderates could be turned off by its potential consequences.

The Senate bill would allow small businesses and self-employed workers to use a new type of health plan — essentially a form of association health plans. And, unlike policies sold in the existing small-group market, those new plans wouldn't have to follow some of the ACA's regulations.They wouldn't have to abide by the same protections for people with pre-existing conditions, nor would they be required to cover the ACA's essential health benefits.

Some experts are worried about how all this would work:

  • Small employers could get coverage from these small-business health plans when their employees are healthy, but then move back into the normal small-group market — which is subject to the ACA's regulations — when their employees are sick. Keeping healthy people out of the traditional small-group market could make it more expensive and less predictable.
  • Self-employed people could make the same switch, which could disrupt the individual market in some states.
  • This could cause instability and premium hikes in the individual and small-group markets. In 2014, one-fifth of the people who bought coverage through the ACA's exchanges were small-business owners or self-employed.
  • A Kaiser Family Foundation brief explores the issue in more depth.

Yes, but:

  • Obama-era regulations could mitigate some of the potential disruption. Those rules allowed some people — including many healthy people — to keep their pre-ACA coverage or sign up for new policies that also didn't comply with all of the law.
  • Something similar is already happening, on a small scale, without dire consequences: Employers who self-insure do not have to follow all of the ACA's regulations. But only a small percentage of businesses self-insure. A far greater number would be eligible for the GOP bill's new offerings.

A potential fix: "If the rules governing [association health plans] were consistent with those governing non-[association health plans], there would be fewer concerns about market fragmentation," the actuaries wrote.

Go deeper

Dion Rabouin, author of Markets
3 mins ago - Economy & Business

The European Central Bank and the market's moment of truth

ECB president Christine Lagarde; Photo: Chip Somodevilla/Getty Images

The biggest event for markets this week will be Thursday's meeting of the European Central Bank's governing council and the press conference following it from ECB president Christine Lagarde.

Why it matters: With interest rates jumping around the globe, investors are looking to central bank heads to see if they will follow the lead of Fed chair Jerome Powell, who says rising rates are nothing to worry about, or Bank of Japan governor Haruhiko Kuroda, who has drawn a line in the sand on rates.

Mike Allen, author of AM
44 mins ago - Politics & Policy

Manchin's next power play

Photo: "Axios on HBO"

Sen. Joe Manchin (D-W.Va.), America's ultimate swing voter, told me on "Axios on HBO" that he'll insist Republicans have more of a voice on President Biden's next big package than they did on the COVID stimulus.

The big picture: Manchin said he'll push for tax hikes to pay for Biden's upcoming infrastructure and climate proposal, and will use his Energy Committee chairmanship to force the GOP to confront climate reality.

Why picking a jury for the Derek Chauvin trial is so hard

Illustration: Eniola Odetunde/Axios

The tough task of selecting a jury for former MPD officer Derek Chauvin's trial for the killing of George Floyd is set to begin Monday.

The state of play: "This case may be the most highly publicized criminal trial in a long time. ... That means that it's harder to find people who really have an open mind," Richard Frase, University of Minnesota Law School professor of criminal law, told Axios.