Perfect Match for Health Insurance Exchanges
BROADMOOR, CA. June 29, 2011: “Tomorrow I plan to introduce the Affordable Life Insurance Empowerment Act in Congress,” said Arly Esperson, Congressperson from California’s 54th Congressional District. “Now that the Sixth Circuit Court of Appeals has ruled the health insurance mandate is constitutional, I think it’s time we take the next step.”
Today, a three-judge federal appeals court in the Sixth District upheld the cornerstone of the Affordable Care Act of 2010. “The progressives in Congress wanted to be sure the court upheld the mandate before we started moving ahead with the rest of our agenda,” Esperson explained. Esperson spoke about the controversial ACA provision known as the individual mandate that will require every American resident to enroll in a health insurance plan by 2014.
Progressives breathed a sigh of relief over the decision, Esperson said. Esperson leads the Latte Party Caucus in Congress, a group of lawmakers who believe government needs to do more for “working people. And that’s why I am moving ahead with this new bill.”
The Affordable Life Insurance Empowerment Act (ALIE), Esperson explained, would require all United States’ residents to purchase a minimum of $10,000 in what Esperson called “lifetime coverage.” Ron Kelly, a spokesman for New Mexico Life Insurance clarified the term: “Esperson means whole life or cash value insurance, and it lasts a lifetime, or, well, until death.”
Esperson’s bill would go farther and require everyone older than 35 to own a minimum of $250,000 in term life insurance in addition to the $10,000 whole life policy. “This will do several things for working people,” Esperson explained. “First, there will be money for burial cost. Second, it will help settle estates. And third, and just as important, the federal tax of 25 percent on the death benefit will help to reduce the national debt.”
ALIE overcomes two hurdles that might otherwise doom the bill: premium cost for low-income people, and accessibility coverage.
First, Esperson explained that low-income people – the threshold is set at family income of less than $50,000 a year – will receive help paying their mandatory life insurance premiums. “America’s richest individuals often use life insurance to dodge paying estate taxes,” Esperson said. “We will levy a 35 percent tax on the life insurance proceeds of all plans that exceed $500,000.” In this manner, “we will make sure the rich pay their fair share.”
Second, Esperson plans to fold enrollment in mandatory life insurance plans in the Health Insurance Exchanges required by the ACA. “Hey, every state must have the Exchanges, and it would be nothing for Exchange enrollers to fill out life insurance applications.”
Under ALIE, insurance companies will have to issue life insurance to anyone, regardless of their medical condition or age. “That’s why we mandate ownership,” Esperson explained, “to eliminate cherry picking of insured people, as the life insurance companies do now.”
The other ALIE key feature will help keep the premiums low for everyone, according to Esperson. “We will limit the premium rates on a three to one ratio, so that the younger people will not get stuck paying too high of premiums.” People under 33, according to ALIE, would pay one-third as much as people older than 65.
“This is the perfect adjunct to the Affordable Care Act,” Esperson said. “For the first time in our nation’s history, everyone will have health and life insurance.”
President Obama has remained silent on ALIE.