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How Senate's health bill could disrupt small biz coverage

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.