D.C. Health Link gets sued again. This time, it’s because of Congress.

D.C. Health Link gets sued again. This time, it’s because of Congress.

Oct 20, 2014, 2:56pm EDT

Conservative group called Judicial Watch is behind the latest challenge to D.C.’s Health Benefit Exchange Authority in District Superior Court.

Tina Reed

Staff Reporter- Washington Business Journal

A conservative group called Judicial Watch is behind the latest challenge in District Superior Court to D.C.’s Health Benefit Exchange Authority. A lawsuit filed by District resident Kirby Vining accuses D.C. Health Link of accepting documents from the House and Senate that say they employ less than 50 people in order to use the small business exchange for their employees, the Washington Times reported.

When drafting the law in 2009 and 2010, members of Congress required themselves and their staffs to use the exchange to buy coverage. It was good news to D.C. exchange developers and insurance plans competing for business because it steered thousands of generally healthy, relatively young people into the exchange. It also meant small, private businesses in the District joining the exchange would have a broader base over which to spread actuarial risk.

This is the second lawsuit challenging the strategies the District has used to make its own exchange a viable option, since it has such a small population compared with most states.

Earlier this year, the American Council of Life Insurers sued the exchange because of its funding source, a 1 percent tax on all "health-related" insurers meant to make the exchange sustainable. The suit filed on behalf of all insurers that can’t sell their products on the exchange say they do not directly benefit from the exchange and shouldn’t be forced to pay for it. The District has said all insurers benefit from a healthier population and therefore are direct beneficiaries who should support the exchange.

The tax was collected Sept. 30 in advance of the fiscal year, when the District was required to show it could sustain its own exchange.

A District judge has yet to rule on that case.

District Health Benefit Exchange Authority Director Mila Kofman is named in the suit. The exchange and the District’s Office of the Attorney General declined to comment.

Kofman told Kaiser Health News earlier this year companies opposing the tax have threatened legal action and are worried other states might follow D.C.’s lead with the funding strategy. The tax on insurers was necessary, officials have said, because the city does not have the volume other states have to make the exchange self-sustaining. The District would have had to charge a 17 percent tax on every health plan sold on its website to cover its budget.

"Being a small state, we have to think differently about how we finance D.C. Health Link and the implementation of the Affordable Care Act," Kofman told the D.C. Council Committee on Health earlier this year.

Tina Reed covers health care.

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