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Bill to repeal small-group market expansion heads to Obama's desk

Senate, House pass legislative fix to ACA provision that some predicted would hike premiums

The increasing opposition to the Affordable Care Act's small-group market expansion has paid off in the form of a legislative repeal that has cleared the Senate and is headed to President Barack Obama's desk.

The PACE Act, which would prevent the ACA from defining small employers as companies with 100 or fewer employees, passed in the Senate Thursday amid bipartisan support, one of its co-sponsors, Sen. Jeanne Shaheen (D-N.H.), announced. And Obama appears open to signing the bill, according to the Wall Street Journal.

"I look forward to President Obama quickly signing this measure because it is vital that we maintain the current definition of a small group market and give states the flexibility to expand the size of group markets if the conditions in their state necessitate the change," fellow co-sponsor Sen. Tim Scott (R-S.C.) said in a statement.

The previous definition of a small employer included companies with 50 or fewer employees. The ACA's expansion of the definition, set to take effect Jan. 1, was intended to stabilize the small-group market.

But because the ACA requires employers in the small-group market to offer a distinct set of benefits and does not allow insurers to take certain company characteristics into account when setting premium rates, many worried the change would result in higher premiums and a major market disruption, FierceHealthPayer has reported.

Indeed, some experts warned that companies with younger, healthier employees would face considerable premium hikes because they had previously enjoyed lower rates from insurers, the WSJ notes.

America's Health Insurance Plans has been among the supporters of a legislative fix, according to FierceHealthPayer, joining business groups such as the U.S. Chamber of Commerce and the National Federation of Independent Business.

To learn more:
- here's Shaheen's announcement
- read Scott's announcement
- read the WSJ article

Related Articles:
Push intensifies to stop ACA from expanding small-group market
Small-group market rules change may be GOP's best chance to alter ACA