A Republican lawmaker claims he's found the "Achilles' heel of Obamacare," but insurers like Chattanooga-based BlueCross BlueShield worry the spear he's throwing will wound them.
Rep. Vance Dennis' bill would prohibit Tennessee-licensed insurance companies from participating in the federal health care exchange that will start next year. The online marketplace will help Tennesseans obtain health insurance plans under the Affordable Care Act.
But Dennis, a Savannah attorney, said in the House Insurance and Banking Subcommittee that the bill offers "the opportunity for your children and grandchildren and my children and grandchildren to save billions and billions of dollars of money being borrowed against them by the federal government."
He explained the "Achilles' heel" he's found is that the federal law doesn't pre-empt states' authority to regulate insurance companies. Passing a law keeping state-licensed insurers from participating would thwart the exchanges, reasoned Dennis.
"I believe other states will pass the same thing," Dennis said, excited at the prospect.
Committee members approved it on a partisan, 6-2 vote Wednesday, despite a Tennessee attorney general's opinion calling it constitutionally "suspect." The opinion was requested by Rep. JoAnne Favors, D-Chattanooga, who voted against the bill.
Republican Gov. Bill Haslam has told lawmakers he is "philosophically opposed" to it.
But insurance industry representatives and Tony Greer, chief legal counsel for the state Department of Commerce and Insurance, expressed concerns.
The bill, if passed, could lock Tennessee-based companies out of the exchanges and hand all the business to out-of-state insurance companies that wouldn't be affected by a state law.
"It's going to be very frustrating for us not to give Tennesseans the option to purchase on the exchange and have the option of the subsidy," BlueCross lobbyist David Locke told the panel.
Greer said the bill is "trying to nullify the exchange provision" of the Affordable Care Act. But he said the federal law has "very broad" authority to pre-empt state laws that conflict with it, he said.
"They could come in and say that any other company in the country that's a qualified health plan, except Tennessee-licensed companies, could sell in Tennessee," Greer said.
"You could have unlicensed companies coming in to do business. That would put our licensed companies at a disadvantage because they couldn't sell on the exchange."
Warren Bromel, who lobbies for the American Insurance Association, echoed Greer's comments.
Mandy Young is a lobbyist for Cigna, which maintains a large presence in Chattanooga. She noted that through a subsidiary, Connecticut General, the company has licensed entities in every state.
"Cigna may still well be able to sell on that exchange to Tennessee residents," she said.
"So I think you're well intentioned with it, but you may be punishing my competitor, BlueCross BlueShield, and any other Tennessee-only-based company," Young said.
Dennis disagreed, arguing, "I don't believe anything in Obamacare allows an out-of-state company to sell to Tennessee residents."
"In my reading as an officer of the court, the [federal] language is very restrictive," he said.
BlueCross spokeswoman Mary Danielson said Thursday the nonprofit insurer has devoted "thousands of hours and extraordinary resources" to prepare for the law as well sell its plan on the exchange, "so we have serious concerns about this legislation."
Favors later said she distributed copies of Cooper's legal opinion to committee members.
She believes Dennis' own district would have lots of lower-income people who would benefit from being able to find insurance on the exchange.
"We have to be extremely careful before we do things like that," she said.
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