Cost Estimate of Health Insurance Marketplace Modernization & Affordability Act of 2006

This act, known as S.1955, would amend the Employee Retirement Income Security Act of 1974 and the Public Health Service Act to create national standards for regulating and administering health insurance. It would permit small employers belonging to national trade associations to form a group for health insurance purposes to enable members to offer their employees health insurance polices with premiums and benefits that reflect a large group risk pool.

If S.1955 is enacted as introduced, it would preempt laws passed in many states that regulate minimum health insurance coverage. However, because individuals enrolling in an association plan may have previously been uninsured or covered by a Medicaid or State Children's Health Insurance Plan, federal and state Medicaid costs reductions are projected.

According to this Congressional Budget Office analysis, the bill would reduce federal Medicaid spending by $235 million between 2007 to 2011, and by $790 million between 2007 to 2016. The bill is projected to produce Medicaid savings at the state level of $180 million from 2007 to 2011, and savings of $600 million between 2007 and 2016.