Pataki: Don't close ObamaCare 'escape hatch'

A former New York governor is raising the alarm about self-insurance amid mounting pressure by state legislatures to place new restrictions on self-insured plans.

Republican George Pataki accused the White House Wednesday of "leading the charge" to limit self-insurance because the option threatens ObamaCare.

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"Smaller businesses may have an escape hatch from many of the law's worst features — but the administration and its left-wing allies are trying to close the door," Pataki wrote in the New York Post.

The op-ed points to the rising popularity of self-insurance among small businesses interested in avoiding rules imposed by the Affordable Care Act.

Self-insured plans have a special status under the law. They are not required to provide essential health benefits or pay some taxes levied on the conventional market.

To ObamaCare's supporters, the trend toward self-insurance comes with a significant downside.

That coverage choice could increase premiums elsewhere in the market, destabilizing the law's new insurance marketplaces.

The liberal Center for American Progress wrote in June that the shift could cause an "insurance premium death spiral" unless lawmakers intervene.

Self-insurance also offers fewer protections for policyholders, especially those who are sick, critics say.

Conservatives are increasingly focused on stopping any changes that would weaken the status of self-insured plans, an option they see as vital for small businesses.

Pataki's piece follows a series of similar rallying cries within the right-leaning media. The Wall Street Journal warned of a "crackdown" on self-insured policies in September.